VCYT 10-K & 10-Q changes, risk factors and insider trading

•We have engaged, and may continue to engageengage, in acquisitions, dispositions or other strategic transactions that could disrupt our business, cause dilution to our stockholders or reduce our financial resources. If our general strategy of seeking incremental growth through acquisitions and collaborations is not successful, or if we do not successfully integrate companies or assets that we acquire into our business, our prospects and financial condition willmay suffer.

•Changes in healthcare policy, including legislation reforming the U.S. healthcare system, recent U.S. Supreme Court judicial decisions and potential changes in the regulatory environment, may have a material adverse effect on our financial condition and operations.

•We depend on our senior management team, and the loss of one or more of our executive officers, or the inability to attract and retain highly-skilledhighly skilled employees or other key personnel in our highly competitive industry, could adversely affect our business.

Our financial results currently depend mainly on sales of our Decipher Prostate and Afirma tests,laboratory developed tests (LDTs), and we may not generate sufficient revenue from these and our other diagnostic tests to grow our business.

Most of our revenue to date has been derived from sales of our Decipher Prostate and Afirma tests,laboratory developed tests (LDTs), which are used in the diagnosis of urological and thyroid cancers. Over the next few years, we expect to continue to derive a substantial portion of our revenue from sales of our Decipher Prostate and Afirma tests.laboratory Regardingdeveloped tests (LDTs) as well as our moreProsigna recentlyLDT, adoptedMRD tests,(LDT) onceand theyIVD strategies. Once our tests are clinically validated and commercially available for patient testing, we must continue to develop and publish evidence that our tests are informing clinical decisions in order for them to receive positive coverage decisions by payers. Without coverage policies, our tests may not be reimbursed and we will not be able to recognize revenue. While Afirma is covered by most major payers in the U.S., athere number ofremains payers that do not cover Decipher Prostate. We cannot guarantee that our tests we commercialize will maintain positive coverage decisions. If we are unable to maintain or increase sales and maintain or expand reimbursement for our Decipher Prostate and Afirma tests, our revenue and our ability to sustain profitability would be impaired, and the market price of our common stock could decline.

AWe numberplan to launch the Prosigna LDT and our first indication of TrueMRD in MIBC in 2026. While we do not expect these tests to contribute meaningfully to revenue in 2026, our tests,inability suchto assuccessfully commercialize these tests or obtain adequate reimbursement could negatively affect our future revenue growth and impact our ability to achieve our revenue projections in future years. Additionally, our Prosigna IVD and Decipher Bladder,Bladder test have not contributed significant revenue to date. Although we expect them to grow and become an increasingly important component of our portfolio, as well as our results of operations, we may be unable to increase sales or expand reimbursement, and therefore we may not meet our revenue projections. Additionally, we anticipate further expanding the reach of some of our tests in international markets; if our products are not widely adopted internationally, our business and results of operations may be adversely affected.

For the year ended December 31, 2024,2025, we had a net income of $24.1$66.4 million and as of December 31, 2024,2025, we had an accumulated deficit of $444.0$377.6 million. Although we recorded net income in 2025 and 2024, we have recorded net loss in recentprior years, and we may be unable to sustain profitability in the future. Ongoing widespread inflationary pressures in the United States and across global economies have resulted in higher costs for our raw materials, non-material costs, labor and other business costs, and significant increases in the future could adversely affect our results of operations. We may not sustain or grow past our current levels of profitability, and our failure to do so in the future could cause the market price of our common stock to decline.

Additionally,For example, Decipher Prostate is currently reimbursed by Medicare pursuant to LCDs issued by Palmetto GBA's MolDX program and adopted by Noridian Healthcare Solutions, each acting as a MAC, as well as by a number of commercial payers. However, there are many commercial payers who currently do not provide reimbursement for our prostate genomic tests, or provide only limited reimbursement, and we have contracts for reimbursement with only a limited number of commercial payers for our prostate tests. In September 2024, a new LCD for “Gene Expression Profile Tests for Decision-Making in Castration Resistant and Metastatic Prostate Cancers” was finalized through the MolDX program. In December 2024, we received confirmation that our Technical Assessment, or TA, was approved with a retroactive effective date of October 18, 2024, and the metastatic indication for Decipher is now covered by Medicare. Modifications to the LCDs and associated coverage articles for Afirma, Decipher Prostate and our other tests could have an adverse effect on our business, financial condition and results of operations.

We submit claims to payers directly using CPT codes, which plays a significant role in how our tests are reimbursed both from commercial and governmental payers. Any changes to the codes or associated reimbursement rates can materially affect our revenue. For example, with the transition from Afirma GEC to Afirma GSC, a new CPT Category I code (81546) was established for the Afirma classifier, effective January 1, 2021. This code underwent the national payment determination process for Medicare in 2020, through which the Centers for Medicare & Medicaid Services, or CMS, set its reimbursement rate at $3,600 on the Clinical Laboratory Fee Schedule (CLFS), the same rate as the prior CPT code for Afirma GEC, unchanged since 2018. Similarly, Decipher Prostate was assigned a Category I CPT code (81542) in 2020. CMS included this code in the gapfill pricing process and set the final CLFS reimbursement rate for CPT code 81542 at $3,873, effective January 1, 2021. Additionally, Decipher Bladder was assigned CPT code 0016U, which CMS priced through the gapfill process, setting a final CLFS reimbursement rate of $3469.83 effective January 1, 2021. Most recently, Congress passed the Consolidated Appropriations Act, 2026, which included revisions to PAMA review cycle. The first Protecting Access to Medicare Act of 2014, or PAMA, data reporting period for CPT 81546 (Afirma GSC), CPT 81542 (Decipher Prostate), and CPT 0016U (Decipher Bladder) under the current triennial data reporting process is expected to occur between May 1 through July 31, 2026 based on the data collection period of January and1 Marchthrough 2029.June 30, 2025. This could result in updated reimbursement rates effective January 1, 2030.2027 through December 31, 2029. There is no guarantee that Medicare payment rates for Afirma GSC, Decipher Prostate, or Decipher Bladder will remain stable in future PAMA reporting cycles, as rates are based on the weighted median of private commercial payer payments.

We expect to continue to focus substantial resources on increasing adoption, coverage and reimbursement for the Decipher Prostate, Afirma, ProsignaProsigna, TrueMRD and Decipher Bladder, as well as any other future tests we may develop. We believe it will take several years to achieve coverage and contracted reimbursement with most third-party payers across our entire portfolio of tests. We cannot predict whether, under what circumstances, or at what payment levels payers will reimburse for our tests. Also, payer consolidation is underway and creates uncertainty as to whether coverage and contracts with existing payers will remain in effect. Finally, if there is a decrease in the Medicare payment rates for our tests, the payment rates for some of our commercial payers may also decrease if they tie their allowable rates to the Medicare rates. Reductions in private payer amounts could also decrease the Medicare payment rates for our tests under PAMA. Our failure to establish broad adoption of and reimbursement for our tests, or our inability to maintain existing reimbursement from payers, will negatively impact our ability to generate revenue and sustain profitability, as well as our future prospects and our business.

Some patients may decide not to use our tests because of price, all or part of which may be payable directly by the patient if the patient’s insurer denies reimbursement in full or in part. There is a growing trend among insurers to shift more of the cost of healthcare to patients in the form of higher co-payments or premiums, putting patients in the position of having to pay more for our tests. In addition, volatile interest rates and ongoing inflation in the United States and globally may put further pressure on insurers and other providers to raise prices or reduce reimbursement, increasing the cost to the patient. We expect to continue to see pressure from payers to limit the utilization of tests, generally, and we believe more payers are deploying costs containment tactics, such as pre-authorization and employing laboratory benefit managers to reduce utilization rates. Payors are increasingly contracting with healthcare intermediaries like laboratory benefit managers as a way to contain healthcare costs by limiting both coverage and the level of reimbursement that may be provided to tests. Laboratory benefit managers may take steps to restrict patient access to our tests, including by not covering our tests through changes to medical policies or adding prior approval requirements before reimbursing providers or patients for using our tests. We cannot be sure that laboratory benefit managers will authorize coverage and reimbursement of our tests. Implementation of provisions of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, collectively the ACA, has also resulted in increases in premiums and reductions in coverage for some patients. These events may result in patients delaying or forgoing medical checkups or treatment due to their inability to pay for our tests, which could have an adverse effect on our revenue.

WeOur high complexity clinical labs that design, develop and manufacture our laboratory developed tests are subject to CLIA,the Clinical Laboratory Improvement Amendment (CLIA) regulations, a federal law that regulates clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease. CLIA regulations mandate specific personnel qualifications, facilities administration, quality systems, inspections, and proficiency testing. CLIA certification is also required for us to be eligible to bill state and federal healthcare programs, as well as many private third-party payers. To renew these certifications, we are subject to survey and inspection every two years. Moreover, CLIA inspectors may conduct random inspections of our clinical reference laboratories. If we fail to maintain CLIA certificates in our South San Francisco, California; San Diego, California; or Austin, Texas laboratory locations, we would be unable to bill for services provided by state and federal healthcare programs, as well as many private third-party payers, which may have an adverse effect on our business, financial condition and results of operations.

We are also required to maintain state licenses to conduct testing in our laboratories. The laws of California, New York, and Texas, among other states’ laws,states, require that we maintain a license and comply with state regulation, in addition to the federal CLIA regulation, as a clinical laboratory. Other states may have similar requirements or may adopt similar requirements in the future. In addition, all of our clinical laboratories are required to be licensed and approved by the New York State Department of Health on a test-specific basis to perform testing on specimens from New York. We have received New York State Department of Health approval for the Decipher Prostate, Afirma, EnvisiaAfirma and Decipher Bladder tests. We will be required to obtain approval for other tests we may offer in the future. If we were to lose our CLIA certificate or California license for our South San Francisco or San Diego laboratories, or our CLIA certificate for our Austin laboratory, whether as a result of revocation, suspension, limitation or otherwise, we may experience delays in processing testing, experience increased costs, or may no longer be able to perform our molecular tests, which would eliminate our primary source of revenue and harm our business. If we were to lose our licenses issued by New York or by any other states where we are required to hold licenses, we would not be able to test specimens from those states. New tests we may develop, and modifications to existing tests, may be subject to new approvals by regulatory bodies such as the New York State Department of Health, and we may not be able to offer our new or modified tests until such approvals are received. Furthermore, certain state agencies, including the New York State Department of Health, have been experiencing delays in their response time which may cause delay in our receipt of our corresponding approvals or renewals for our tests. Any such delays or holds on our ability to test specimens could harm our business and operating results.

We have engaged, and may continue to engageengage, in acquisitions, dispositions or other strategic transactions that could disrupt our business, cause dilution to our stockholders or reduce our financial resources. If our general strategy of seeking incremental growth through acquisitions and collaborations is not successful, or if we do not successfully integrate companies or assets that we acquire into our business, our prospects and financial condition willmay suffer.

As an element of our growth strategy, we have, from time to time, pursued opportunities to license assets or purchase companies or assets that we believe would complement our current business or help us expand into new markets. For example, in the first quarter of 2024 we completed the C2i AcquisitionAcquisition, and we may pursue additional acquisitions of complementary businesses or assets as part of our business strategy. On August 1, 2025, we completed the divestiture of the contract manufacturing portion of our French subsidiary, Veracyte SAS, to Helio Diagnostics SAS in connection with a restructuring proceeding. Additional potential transactions that we may consider in the future include a variety of business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any such transaction could be material and could disrupt our business or change our business profile, focus or strategy significantly. This and any future acquisitions, dispositions or strategic transactions made by us also could result in significant write-offs or the incurrence of debt and contingent liabilities, any of which could harm our operating results.

Our strategy to expand into international markets depends on our ability to successfully adapt our menu of diagnostic tests as IVDs and secure necessary regulatory approvals. See Item 1. Business –Driving Global Growth with Distributed IVD Tests. Currently, the Prosigna Breast Cancer Assay is available globally as an IVD test that runs on the nCounter Analysis System platform. If we are not able to adapt our other current or future tests to be performed on IVD platforms or if our tests fail to be competitive against competing products in international markets, our prospects for growth could suffer. In addition, to the extent international markets have existing practices and standards of care that are different than those in the United States, we may face challenges with the adoption of our tests in international markets. For commercialization of our tests on other IVD platforms, we will be dependent on third parties for the support and clinical registration of their platforms as well as certain reagents, instruments, software or components.

Additionally, our success in international markets depends on ourthe ability of our contract manufacturers to manufactureproduce test kits at a quality and quantity to keep up with demand. We have and may continue to experience quality, regulatory, or manufacturing irregularities and challenges. WeOur contract manufacturers may fail to successfully grow our manufacturing capacity.capacity needed to meet demand.

We rely on sole suppliers for critical supply of reagents, equipment and other materials and services that we use to perform our CLIA tests as well as to satisfy demand for our Prosigna test kits, service kits and service on the nCounter Analysis System. We also purchase components used in our extraction and sample collection kits from sole-source suppliers. Some of these items are unique to these suppliers and vendors and their inability to provide us with reagents that perform to specifications, could negatively impact our ability to provide timely response and reports to our customers and, as a result, may materially impact our ability to generate revenue.

We also rely on sole service providers for certain services such as cytopathology professional diagnoses on thyroid fine needle aspiration. If any of these service providers were unable to provide the quality or quantity of services that we require, or if we were unable to agree on commercial terms and our relationships with such service providers were to terminate, our business could be harmed until we were able to secure the services of another provider. In addition, some of our software and operational support vendors and service providers represent our sole source of these services, and our ability to provide such services might be materially adversely affected if any of these parties experience or engage in operating difficulties, network or information system shutdowns or other service disruptions, or are otherwise unable to provide the services we need in a timely manner.

While we have developed alternate sourcing strategies for many materials, vendors and service providers, we cannot be certain whether these strategies will be effective or the alternative sources will be available when we need them. Moreover, the supply of key reagents and testing materials has been periodically challenged by quality of reagents received. Further, we experience supply chain disruptions, although, to date, this has not resulted in delays in our ability to timely return test results.results in a timely manner. Any such interruption may significantly affect our future revenue, cause us to incur higher costs, and harm our customer relationships and reputation. In addition, in order to mitigate these risks, we maintain inventories of these supplies at higher levels than would be the case if multiple sources of supplies were available. If our total test volume decreases or we switch suppliers, we may hold excess supplies with expiration dates that occur before use which would adversely affect our losses and cash flow position. As we introduce any new test or make changes to existing tests, we may experience supply issues as we ramp test volume.

In addition to the need to scale our testing capacity, our future growth, including our transition to a multi-product company with international operations, will impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees with the necessary skills to support the growing complexities of our business.business, including the ongoing development of our IVD and LDT strategies, such as MRD. Rapid and significant growth may place strain on our administrative, financial and operational infrastructure. Our ability to manage our business and growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. We have implemented an internally-developedinternally developed data warehouse, which is critical to our ability to track our diagnostic services and patient reports delivered to physicians, as well as to support our financial reporting systems. The time and resources required to optimize these systems is uncertain, and failure to complete optimization in a timely and efficient manner could adversely affect our operations. If we are unable to manage our growth effectively, it may be difficult for us to execute our business strategy and our business could be harmed.

As demand for our tests, products and services grow,grows, we will need to continue to scale our capacity and processing technology, expand customer service, billing and systems processes, enhance our internal quality assurance program and ensure test and product continuity. We will also need additional certified laboratory scientists as well as other scientific and technical personnel to process higher volumes. We cannot assure that any increases in scale, related improvements, supply of reagents to perform testing, and quality assurance measures will be successfully implemented or that appropriate personnel will be available and able to be hired. Failure to implement necessary procedures, transition to new processes or hire the necessary personnel could result in higher costs of processing tests, quality control issues or inability to meet demand. There can be no assurance that we will be able to perform our testing or fulfill our product, testing, or service commitments on a timely basis at a level consistent with demand, or that our efforts to scale our operations will not negatively affect the quality of test results. If we encounter difficulty meeting market demand or quality standards, our reputation could be harmed and our future prospects and our business could suffer.

Changes in healthcare policy, including legislation reforming the U.S. healthcare system, recent U.S. Supreme Court judicial decisions and potential changes in the regulatory environment, may have a material adverse effect on our financial condition and operations.

For example, the ACA, enacted in March 2010, made changes that significantly affected the pharmaceutical and medical device industries and clinical laboratories. Some significant measures contained in the ACA include coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and physicians, and initiatives to promote quality indicators in payment methodologies. The ACA also includes significant fraud and abuse measures, including required disclosures of financial arrangements with physician customers, lower thresholds for violations and increasing potential penalties for such violations. Since its enactment, there have been various judicial, executive and congressional challenges to aspects of the ACA. It is unclear how any such challenges and any healthcare reform measures of the incoming Trumpcurrent administration, or any future presidential administration, will impact the ACA or our business. For example, thea former Trump administration issued various executive orders which eliminated cost sharing subsidies and various provisions that would impose a financial burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. Additionally, the U.S. Congress has previously introduced several pieces of legislation aimed at significantly revising or repealing the ACA. We cannot predict if, or when, the ACA will be amended, and cannot predict the impact that an amendment of the ACA will have on our business.

We cannot predict whether future healthcare initiatives will be implemented at the federal or state level, particularly in light of the incoming U.S. presidential administration or in countries outside of the United States in which we do or may do business, or the effect any future legislation or regulation will have on us. The taxes imposed by the new federal legislation, cost reduction measures and the expansion in the role of the U.S. government in the healthcare industry may result in decreased revenue, lower reimbursement by payers for our tests or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations. In addition, sales of our tests outside the United States subject our business to foreign regulatory requirements and cost-reduction measures, which may also change over time.

PAMA includes a substantial payment system for clinical laboratory tests under the CLFS. Under PAMA, laboratories that receive the majority of their Medicare revenue from payments made under the CLFS and the Physician Fee Schedule report on a triennial basis (or annually for ADLTs), private payer rates and volumes for their tests with specific CPT codes based on final payments made during a set data collection period. We believe that PAMA and its implementing regulations are generally favorable to us, however, there can be no assurance that the payment rate for Afirma, Prosigna, Decipher Prostate,Prostate and Decipher Bladder and Envisia will not decrease in the future or will not be adversely affected by the PAMA law and regulations. In addition, the Inflation Reduction Act of 2022 may subject certain products to government-established pricing, potentially impose rebates and subject manufacturers who fail to adhere to the government’s interpretation of the law to penalties.

In December 2016, Congress passed the 21st Century Cures Act, which, among other things, revised the process for LCDs. Additionally, effective June 11, 2017, a MAC is required to, among other things, publish a summary of the evidence that it considered when developing an LCD, including a list of sources, and an explanation of the rationale that supports the MAC’s determinations. In October 2018, CMS issued additional guidance revising the requirements for the development of LCDs. WeThis cannotguidance predicthas whetherextended thesethe revisionstimelines willfor delaydevelopment futureof new LCDs and may result in impeded coverage for our test products, which could have a material negative impact on revenue.

Further, in June 2024, the U.S. Supreme Court reversed its longstanding approach under the Chevron doctrine, which provided for judicial deference to regulatory agencies, including the FDA.FDA, in certain circumstances. As a result of this decision, there may be increased challenges to existing agency regulations and policies, and it is uncertain how lower courts will apply the decision in the context of other regulatory schemes. This decision may result in regulatory uncertainties in the healthcare industry and could impact the timely review of any regulatory filings or applications we submit to the FDA, which could negatively impact our business.

We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. For example, the former Trump administration took several executive actions that imposed significant burdens on, or otherwise materially delayed, the FDA’s ability to engage in routine oversight activities, such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications. It is difficult to predict whether or how any current executive orders will be rescinded and replaced under the incoming Trumpcurrent administration. The policies and priorities of any administration and the U.S. Congress are unknown and could materially impact the regulations governing our business. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies or if we are not able to maintain regulatory compliance, then we may be subject to enforcement action and we may not achieve or sustain profitability.

In 2018, CMS revised its billing rules to allow the performing laboratory to bill Medicare directly for molecular pathology tests and Criterion A ADLTs performed on specimens collected from hospital outpatients, even when those tests are ordered less than 14 days after the date of discharge, if certain conditions are met. We believe that our Decipher Prostate, Afirma, Envisia,Afirma and Decipher Bladder classifiers, along with Prosigna, are covered by this policy. Accordingly, we bill Medicare for these tests when we perform them on specimens collected from hospital outpatients and meet the conditions set forth in CMS's revised billing rules.

In the CY 2020 Hospital Outpatient Prospective Payment System Proposed Rule, CMS solicited comments on potential revisions to these billing rules that could have impacted our ability to bill Medicare directly for our Decipher Prostate, Afirma, Envisia,Afirma and Decipher Bladder classifiers, as well as for Prosigna, when performed on specimens collected from hospital outpatients. Although these changes were not finalized, if CMS makes similar changes in the future, it could negatively impact our business.

Clinical laboratory tests have long been subject to comprehensive regulations under CLIA, as well as by applicable state laws. Most clinical diagnostic tests developed and run within a single CLIA-certified clinical laboratory are known as laboratory developed tests or LDTs. While the FDA has historically maintained its authority to regulate LDTs as devices, it has generally exercised enforcement discretion, meaning that it has not required premarket review, quality system/current Good Manufacturing PracticesPractice regulations, and other applicable medical device requirements for LDT developers and users. Certain reagents, instruments, software or components manufactured and sold by third parties and used by their customers to manufacture or perform diagnostic tests may be subject to regulation under certain circumstances. We believe that our Decipher Prostate, Afirma, Envisia,Afirma and Decipher Bladder classifiers, have been developed and are performed in a manner consistent with the FDA’s enforcement discretion policy concerning LDTs.

While wethere enjoyis continued FDA enforcement discretion under this final rule for our existing tests,LDTs, if the FDA were to determine that Decipher Prostate, Afirma and Decipher Bladder classifiers, or modifications thereof, are not within the scope of the FDA's enforcement discretion policy for LDTs for any reason, including based on these final rules or new rules, regulations, policies or guidance, or due to changes in statute, our existing tests may become subject to extensive FDA requirements, or our business may otherwise be adversely affected and lead to potential adverse effects on our business, prospects, results of operations and financial condition. Furthermore, subject to any changes in regulation, any future Veracyte tests, not currently on market that we later develop and commercialize are likely to be subject to extensive FDA requirements, including potential pre-market review, which may adversely impact our business, prospects, results of operations and financial conditions.

If the FDA or foreign authorities were to require us to seek clearance, approval or certification for our existing testsLDTs that are not currently cleared, approved, or certified or any of our future products for clinical use, we may not be able to obtain such clearances, approvals or certifications on a timely basis, or at all. If premarket reviews or certifications are required, our business could be negatively impacted if we are required to stop selling our products pending their clearance, approval or certification. In addition, the launch of any new products that we develop or modifications we make to existing products could be delayed by the implementation of FDA or foreign regulations. The cost of complying with premarket review or certification requirements, including obtaining clinical data, could be significant. In addition, any future regulation by the FDA or foreign authorities could subject our business to further regulatory risks and costs. For example, our sample collection kits are listed as Class I devices with the FDA. If the FDA were to determine that they are not Class I devices or otherwise not exempt from 510(k) clearance requirements, we would be required to file 510(k) premarket notifications and obtain FDA clearance to use the containers, which could be time consuming and expensive.

The FDA has raised potential concerns where companies manufacture and label finished clinical test kits or clinical testing components as “research use only”, or RUO, or “investigational use only”, or IUO, and either knowingly use them or sell them for use in patient care. The FDA has taken the position that if evidence demonstrates that a product which otherwise meets the definition of a regulated medical device is inappropriately labeled as RUO or IUO, the distribution, sale, or use of the product could violate the misbranding or adulteration provisions of the FDC Act. In the EU, the IVDR expressly provides that products intended for RUO are excluded from the scope of the regulation. A materialproduct intended for RUO, without any medical purpose or objective, is therefore not considered as an IVD medical device, or IVD MD, and is not subject to compliance with the IVD MDsIVDR requirements. Under the IVDR, ifIf any RUO materialproduct is integrated into an IVD,IVD MD, it must be fully validatedassessed and documented as part of the device.device and comply with the IVDR. An RUO materialproduct on its own may not be used for clinical diagnostic purposes. Depending on the product in question, other regulations may be applicable to the RUO products. Some of the reagents, instruments, software or components obtained by us from suppliers for use in our products are currently labeled by those suppliers as “RUO” or “IUO”. If the FDA or foreign bodies were to determine that any of these reagents, instruments, software or components are improperly labeled as RUO or IUO and undertake enforcement actions, some of our suppliers might cease selling these reagents, instruments, software or components to us or be forced to recall them, and any failure to obtain an acceptable substitute could significantly and adversely affect our business, financial condition and results of operations, including increasing the cost of testing or delaying, limiting or prohibiting the purchase of reagents, instruments, software or components necessary to perform testing. Such actions could also lead the FDA to investigate our purchase and use of supplier products and for the Agency to question whether or not Veracyte has violated the FDC Act, which could have a material adverse affect on our business.

Unless an exemption applies, before we begin to label and market some of our products for use as clinical diagnostics in the United States, we are required to obtain clearance from the FDA by submitting a premarket notification under section 510(k) of the FDC Act or 510(k), or approval from the FDA by submitting a premarket approval, or PMA. Alternatively, we may be able to obtain marketing authorization through a De Novo classification process rather than through a PMA for class I or class II devices if the 510(k) pathway is not available. Additionally, we may need to obtain the appropriate marketing clearance, approval, and authorization, as applicable, for any future tests that are offered as LDTs in accordance with the timelines provided in the final rule issued May 6, 2024, aspolicies discussed under the heading “If the FDA or other foreign authorities regulate those of our tests that they do not currently regulate, we could incur substantial costs and delays associated with trying to obtain premarket clearance, approval or certification.”

Any medical device product for which we obtain marketing authorization, including any tests that are currently offered as LDTs, would be subject to regulatory requirements that would affect how we are able to market and sell the device. The FDC Act and FDA regulations place considerable requirements on medical devices, including, but not limited to, compliance with the quality management system regulation, or QSR,QMSR, establishment registration and product listing with the FDA, and compliance with labeling, marketing, complaint handling, medical device reporting requirements, and reporting certain corrections and removals. Obtaining FDA clearance or approval for diagnostics can be expensive and uncertain, generally may take several months to several years, and generally requires detailed and comprehensive scientific and clinical data, as well as compliance with FDA regulations for investigational devices.

For instance, inall orderIVD toMDs, sellincluding our products in the EU, those products must comply with the General Safety and Performance Requirements of the IVDR. Compliance with these requirements is a prerequisite to place IVD products on the EU market. All medical devicesproducts, placed on the market in the EU must meet the Generalgeneral Safetysafety and Performanceperformance Requirementsrequirements laid down in Annex I to the IVDR, including the requirement that an IVD MD must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others. In addition, the device must achieve the performances intended by the manufacturer and be designed, manufactured, and packaged in a suitable manner. To demonstrate compliance with the Generalgeneral Safetysafety and Performanceperformance Requirementsrequirements and other IVDR requirements we must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. As a general rule, demonstration of conformity of IVD MDs and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence.

On April 5, 2017, the IVDR was adopted to establish a modernized and more robust EU legislative framework, with the aim of ensuring better protection of public health and patient safety. Unlike directives, the IVDR does not need to be transposed into national law and therefore reduces the risk of discrepancies in interpretation across the different European markets. The IVDR has increased the regulatory requirements applicable to IVD MDs in the EU and requires that we re-classify and obtain new certificates of conformity for our existing CE-marked IVD MDs withinsubject theto transitional provisions of the IVDR, meaning that where such transitional provisions apply, the products can continue to be placed on the market under the IVDD for a certain period of time. Currently Prosigna for use on the nCounter Analysis System is our only product that required recertification, which is currently in progress. For mostmany IVD MDs, the manufacturer used to self-declare the conformity of its products with the essential requirements of the IVDD. Under the IVDR, the majority of IVD MDs now require the intervention of a notified body for conformity assessment.assessment depending on the new device classification. Notified bodies are independent organizations designated by EU member states to assess the conformity of devices before being placed on the market. TheDepending on the applicable conformity assessment procedure, which is primarily determined by the device’s (risk) classification, the notified body auditsmay and examinesreview the product’s technical documentationdocumentation, andassess the manufacturer’s quality system.management system and/or carry out additional assessments. If satisfied that the relevant product conformscomplies towith the General Safety and Performance Requirements, and the quality management system is also deemed compliant,IVDR, then the notified body issues a certificate of conformity. The manufacturer may then apply the CE Mark to the device, which allows the device to be placed on the market throughout the EU. Complying with the stricter regulatory requirements of the IVDR, including with respect to clinical evaluation requirements, quality systems, and post-market surveillance, may require us to incur significant expenditures. If we fail to remain in compliance with applicable EU laws and directives,laws, we would be unable to continue to affix the CE mark to our products, which would prevent us from selling them within the EU and European Economic Area, or EEA (which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland), and any other regions that tie their product registrations or regulations to the EU requirements.

While the FDA has cleared the Prosigna test for marketing in the United States, and Prosigna is CE marked, which currently permits us to market the test in the EU, and Prosigna has received marketing authorizations in selected other jurisdictions, we intend to seek regulatory authorizations or certifications for Prosigna in other jurisdictions and for IVD tests focused on other indications. We cannot guarantee that the regulatory authorization or certification for Prosigna or other tests will be granted or, if granted, will not be revoked, which could adversely impact our business, financial condition, and operations.

We are dependent on third partythird-party platform and technology providers to maintain their platforms and technology in accordance with the requirements of applicable regulatory bodies. We cannot assure investors that we will be successful in obtaining or maintaining regulatory clearances, certifications, approvals, or marketing authorizations of our existing or future tests or technology, including nCounter. If we do not obtain or maintain regulatory clearances, certifications, approvals, or marketing authorizations for existing or future diagnostic kit products or technology, or expand future indications for diagnostic purposes, if additional regulatory limitations are placed on our diagnostic kit products or if we fail to successfully commercialize such products, the market potential for our diagnostic kit products would be constrained, and our business and growth prospects related to our IVD strategy would be adversely affected.

Certain of our products are regulated as IVD MDs, including Prosigna and the nCounter Analysis System. Accordingly, we and certain of our contract manufacturers are subject to ongoing obligations under the International Organization for Standardization, or ISO, obligations as well as requirements under CLIA and state laboratory quality statutes and regulations, the FDC Act and related FDA regulations, and other statutory and regulatory requirements enforced by other government authorities. These may include routine inspections by notified bodies, the FDA, CMS, and other health authorities, of our manufacturing facilities and our records for compliance with standards such as ISO 13485 and the QSR,QMSR, which establish extensive requirements for quality assurance and control as well as manufacturing and change control procedures, among other things. These inspections may include the manufacturing facilities of any suppliers. In the event that a supplier fails to maintain compliance with regulatory or our quality requirements, we may have to qualify a new supplier and could experience manufacturing delays as a result. We are also subject to other regulatory obligations, such as registration of our company offices and facilities and the listing of our devices with the FDA (and similar listings and certifications in certain other countries); continued adverse event and malfunction reporting; reporting certain corrections and removals; and labeling and promotional requirements.

For example, the FDA has recently finalized a rule to revise the QSRQMSR under 21 CFR Part 820 to more closely align with ISO 13485:2016 but that also includes proposed clarifications and additional definitions and requirements. The revised Part 820 is now titled the Quality Management System Regulation, or QMSR, and device manufacturers must comply with the new QMSR by February 2, 2026. The promotional claims we can make for Prosigna in the United States are limited to the indications for use as cleared by the FDA or outside the United States as authorized or certified by the applicable regulatory authority. If we are not able to maintain regulatory compliance, we may not be permitted to market our medical device products and/or may be subject to enforcement actions by the FDA or other governmental authorities such as the issuance of warning or untitled letters, fines, injunctions, and civil penalties; recall or seizure of products; operating restrictions; and criminal prosecution. In addition, we may be subject to similar regulatory regimes of foreign jurisdictions as we continue to commercialize our products in new markets outside of the United States and Europe. Adverse actions in any of these areas could significantly increase our expenses and limit our revenue and profitability.

For the Percepta Nasal Swab test, we expect competition from companies focused on lung cancer such as Biodesix, Inc. We believe our principal competitor in the breast cancer diagnostics market is Exact Sciences Corporation, which currently commands a substantial majority of the market. Other competitors in the breast cancer diagnostics market include Myriad Genetics, Inc. and Agendia, Inc.

As we expand our portfolio of tests, including into the MRD space, we may also face competition from companies informing treatment decisions such as Natera, Inc., Guardant Health, Inc., Exact Sciences Corporation, Personalis, Myriad Genetics, Neogenomics, Inc., Quest Diagnostics, Billion-To-One, Caris Life Sciences or TempusAI, Inc. However, we believe our primary competition in MRD for MIBC is Natera, Inc. Further, competition could also emerge using alternative samples, such as blood, urine or sputum, as well as tumor naive approaches.

We depend on our senior management team, and the loss of one or more of our executive officers, or any inability to attract and retain highly-skilledhighly skilled employees and other key personnel in our highly competitive industry, could adversely affect our business.

We are a global diagnostics company that empowers clinicians with the high-value insights they need to guide and assure patients at pivotal moments in the race to diagnose and treat cancer. Our high-performing tests enable clinicians to make more confident diagnostic, prognostic and predictive treatment decisions. Insights from these tests help patients avoid unnecessary procedures and interventions and accelerate time to appropriate treatment, thereby improving outcomes for patients inacross our global markets.

In the United States, we currently offer tests in prostate cancer (Decipher Prostate), thyroid cancer (Afirma), breast cancer (Prosigna) and bladder cancer (Decipher Bladder). In addition, we are planning to offer our Percepta Nasal SwabProsigna test isfor beingbreast runcancer as an LDT in our CLIA labs in support of clinical studies.2026.

We serve global markets with two complementary models. In the United States, we offer LDTs through our centralized CLIA certified laboratories in South San Francisco and San Diego, California, supported by our cytopathology expertise in Austin, Texas. Additionally, primarily outside of the United States, we provide IVD tests to patients through distribution to laboratories and hospitals that can perform the tests locally. Our international distribution of IVDs is currently limitedfocused toon our Prosigna test,test however,and, in the future, we intend to offer Decipher Prostate andas Percepta Nasal Swab asan IVD tests.test. We believe our broad menu of advanced diagnostic tests, combined with our ability to deliver them globally, differentiates us in the diagnostics industry.

We are aiming to expand our role across the cancer continuum with the addition of our minimal residual disease, or MRD platform, TrueMRD, and our assays. This will broaden our portfolio of tests to help monitor the success of a therapeutic or surgical intervention and support the determination of the best course of action for each patient.

Recent macroeconomic factors, such as interest rate fluctuations and inflation in the United States and other markets, evolving international trade policies and government actions relating to tariffs, as well as volatility in the global banking and finance systems, geopolitical challenges and other measures that restrict international trade, have resulted in volatility in the capital and credit markets globally. Moreover, the continued fluctuation and reduced valuation of the U.S. dollar compared to other currencies has impacted and may continue to impact our results of operations. We intend to continue to monitor macroeconomic conditions closely and may determine to take certain financial or operational actions in response to such conditions as appropriate. In addition, regional conflicts like those between Russia and Ukraine and in Israel may adversely impact our business and operating results. Finally, the ongoing conflict in the Middle East and related political, military and security conditions in and around Israel may disrupt our Israel business operations and employees that we acquired through the C2i Acquisition.

Our performance currently depends on the number of tests that we perform and report as completed in our CLIA-certified laboratories and the number of Prosigna tests purchased by our customers, which we refer to as our reported total test volume. Factors impacting our reported total test volume include, but are not limited to:

•the time it takes us or our customers to perform our tests and report the results, including as a result of supply chain challenges (including quality and supply of single-source reagents and consumables);

Revenue growth depends on our ability to secure coverage decisions, achieve broader reimbursement from third-party payers, obtain prior authorization, expand our base of prescribing physicians and increase our penetration in existing accounts. Because some payers consider our products experimental and investigational, we may not receive payment for tests and payments we receive may not be at acceptable levels. We expect our revenue growth to increase if more payers make a positive coverage decision and as payers enter into contracts with us, which should enhance our revenue and cash collections. Our sales teams are aligned under our general manager-based structure to focus on specific products and global markets. If we are unable to expand the base of prescribing physicians and penetration within these accounts at an acceptable rate, or if we are not able to execute our strategy for increasing reimbursement and associated collections, we may not be able to effectively increase our revenue. We expect to continue to see pressure from payers to limit the utilization of tests, generally, and we believe more payers are deploying cost containment tactics, such as pre-authorization, reduction of the payer portion of reimbursement and employing laboratory benefit managers to reduce utilization rates. Revenue growth also depends on our ability to secure reimbursement from government payers at a reimbursement rate that is consistent with past reimbursement rates.

Revenue growth, operational results and advances to our businesstest offering strategy dependsdepend on our ability to integrate any acquisitions, such as our recent acquisitions of C2i and HalioDx, into our existing business and effectively scale their operations. The integration of acquired assets and other strategic transactions that we may pursue may impact our revenue growth, increase the cost of operations or may require management resources that otherwise would be available for ongoing development of our existing business.

A significant aspect of our business is our investment in research and development activities, including activities related to the development of new tests and modifications and enhancements to our current tests, including the ongoing development of our IVDProsigna LDT, MRD and MRDIVD strategies. In addition to thethese development of new product candidates,activities, we believealso theseperform clinical evidence studies which are critical to gaining clinician adoption of newour products andtests, driving favorable coverage decisions by payorspayers, as well as gaining guideline inclusion for such products.tests.

We generally bill for testing services at the time of test completion, upon delivery of a patient report to the prescribing physician. We recognize revenue based on estimates of the cash amount that will ultimately be realized.collected. In determining the amount to accrue for a delivered test, we consider factors such as payment history, payer coverage, whether there is a reimbursement contract between the payer and us, payment as a percentage of agreed upon rate (if applicable), amount paid per test and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management. Actual results could differ from those estimates and assumptions. Upon ultimate collection, the amount received is compared to previous estimates and the amount accrued is adjusted accordingly.

Our product revenue consists primarily of international sales of the Prosigna breast cancer assayIVD and related diagnostic kitskits, and services. We recognize product revenue when control of the promised goods is transferred to our customers, in an amount that reflects the consideration expected to be received in exchange for those products. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer, either on its own or together with other resources that are readily available to the customer, and is separately identified in the contract. Performance obligations are considered satisfied once we have transferred control of a product to the customer, meaning the customer has the ability to use and obtain the benefit of the product. We recognize product revenue for satisfied performance obligations only when there are no uncertainties regarding payment terms or transfer of control. Shipping and handling costs incurred for product shipments are charged to our customers and included in product revenue. Revenue is presented net of the taxes that are collected from customers and remitted to governmentalgovernment authorities.

We enter into arrangements to license or provide access to our assets or services to third parties, including clinical and testing services, research and development, contract manufacturing and development, as well as other services. Such arrangements may require us to deliver various rights, data, services, manufactured diagnostic test kits, access and/or testing services to partner biopharmaceutical and other companies. The underlying terms of these arrangements generally provide for consideration paid to us in the form of nonrefundable fees; payments on delivery of data,data or test results or manufactured products; costs of service plus margin; performance milestone payments; expense reimbursements and possibly royalty and/or other payments. Net sales of data or other services to our customers are recognized in accordance with ASC 606 and are classified under biopharmaceutical and other revenue. Payments received that are not related to sales or services to a customer are recorded as offsets against research and development expense or cost of biopharmaceutical and other revenue in our consolidated statements of operations.

The components of our cost of testing revenue are sample collection kit costs, reagent expenses, compensation expense, license fees and royalties, depreciation, other expenses such as equipment and laboratory supplies, and allocations of facility and information technology expenses. Costs associated with performing tests are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. As a result, our cost of testing revenue as a percentage of testing revenue may vary significantly from period to period because we may not recognize all revenue in the period in which the associated costs are incurred. We expect cost of testing revenue in absolute dollars to increase as the number of tests we perform increases. However, we expect that the cost per test will decrease over time due to leveraging fixed costs, efficiencies we may gain as test volume increases and process enhancements such as automation, implementation of new technologies and other cost reductions. As we introduce new tests, initially our cost ofper testing revenuetest will be high as we expect to run suboptimal batch sizes, run quality control batches, test batches, registry samples, and generally incur costs that may suppress or reduce gross margins. This will disproportionately increase our aggregate cost of testing revenue until we achieve processing efficiencies.

Our cost of product revenue consists primarily of costs of purchasing diagnostic kit components,components and reagents, labor, installation,delivery servicecosts and packaging and delivery costs. In addition, cost of product revenue includes royalty costsroyalties for licensed technologies included in our products. Subsequent to the restructuring proceedings affecting Veracyte SAS in August 2025, the costs of diagnostic kit components and reagents and labor costs are paid to a third-party contract manufacturer. As our Prosigna test kits and any additional IVDs we produce are sold in various configurations with different numbernumbers of tests, our product cost per test will continue to vary based on the specific kit configuration purchased by customers.

Our cost of biopharmaceutical and other revenue areconsists theof costs of performing activities under arrangements that require us to performlicense or provide access to our assets or laboratory testing services, as well as costs incurred in providing contracted research and development, contract testing services, commercialization,development and contract manufacturing andactivities. development.These Thiscosts expense isare mainly composed of compensation, manufacturing and laboratory supplies, and pass-through costs. Following the restructuring proceedings affecting Veracyte SAS in August 2025, the Company no longer performs contract research, development and manufacturing services.

Research and development expenses primarily include expenses incurred to collect clinical samples and conduct clinical studies to develop and support our products and pipeline, as well as develop future technology. These expenses consist of compensation expenses,expense, direct research and development expenses such as laboratory supplies and costs associated with setting up and conducting clinical studies at domestic and international sites, professional fees, depreciation and amortization, other miscellaneous expenses and allocation of facility and information technology expenses. Further, research and development expenses include costs to collect clinical samples and conduct clinical studies to develop and support our products and pipeline, as well as develop future technology. We expense all research and development costs in the periods in which they are incurred. We incurred a majority of our research and development expenses in the year ended December 31, 20232025 in support of our early-stage products, including Percepta Nasal Swab, as well as the development of new IVD products and discovery. In the year ended December 31, 2024 our research and development expenses also included support for the development and validation of our MRD tests.tests, as well as our Prosigna LDT test, the development of new IVD products and discovery. Going forward, we expect to incur significant expense as we invest in the continued development of our innovation engine, early-stage products including our MRD tests, required clinical studies and the development of current IVD tests.

Selling and marketing expenses consist of compensation expenses, direct marketing expenses, professional fees, other expenses such as travel and communications costs, as well as allocation of facility and information technology expenses. Our sales team of approximately 110120 representatives is organized by business unit in the U.S., with separate teams calling on thyroid cancer and urologic cancer physicians. The business units have dedicated marketing support, as well as a marketing operations team that serves the commercial organization broadly. Prosigna sales outside of the U.S. are led by country managers and sales teams that call on laboratories and breast cancer oncologists with dedicated marketing support.oncologists.

Other income (loss), net consists primarily of interest income from our cash held in interest bearing accounts, realized and unrealized gains and losses on foreign currency transactions, andand, prior to the restructuring proceedings affecting Veracyte SAS in August 2025, French research tax credits.credits, Theas Frenchwell researchas taxloss creditson (créditdeconsolidation d’impôt recherche, or CIR) are generated by our wholly owned subsidiary,of Veracyte SAS, in connection with its research efforts performed in Marseille, France.SAS.

We recognize revenue from the sale of our tests performed for customers, including patients and institutions, at the time test results are reported to physicians. Most tests requested by customers are sold without a written agreement; however, we determine that an implied contract exists with our customers for whom a physician will order the test. We identify each sale of our test to a customer as a single performance obligation. A stated contract price does not exist and the transaction price for each implied contract with our customer represents variable consideration. We estimate the variable consideration under the portfolio approach and consider the historical reimbursement data from third-party commercial and governmental payers and patients, as well as known or anticipated reimbursement trends not reflected in the historical data. We monitor the estimated amount to be collected in the portfolio at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Both the estimate and any subsequent revision contain uncertainty and require the use of significant judgment in the estimation of the variable consideration and application of the constraint for such variable consideration. We analyze actual cash collections over the expected reimbursement period and compare it with the estimated variable consideration for each portfoliopayer group and any difference is recognized as an adjustment to estimated revenue after the expected reimbursement period, subject to assessment of the risk of future revenue reversal.

We have acquired finite-lived and indefinite-lived intangible assets in business combinations. These intangible assets are measured at their respective fair values as of the acquisition date and are subject to potential adjustments within the measurement period, which may be up to one year from the acquisition dates. The fair values of the intangible assets are generally determined using income approaches such as the multi-period excess earnings method, the with-and-without method and the relief from royalty method. These income approaches are based on various estimates for each asset including the estimate of future cash flows including, revenue assumptions (such as projected testing volumes, growth rates), discount rates and the expected economic life/obsolescence factors of the respective assets. Our finite-lived intangible assets are being amortized using the straight-line method over their estimated useful lives of 5 to 15 years, based on management's estimate of the period over which their economic benefits will be realized, product life and patent life. Our in-process research and development, or IPR&D, is not amortized until it becomes commercially viable and placed in service. At the time when the IPR&D is placed in service, we will determine a useful life. We test these intangible assets for impairment on an annual basis or when events or circumstances indicate a reduction in the fair value below their carrying amounts.

Supplies consists of materials and reagents consumed in the performance of testing services. Inventory consists of raw materials consumed in the contract manufacturing process as well as finished and semi-finished componentsgoods used in the assembly of diagnostic kits related to product sales.sales as well as raw materials consumed in the contract manufacturing process. Subsequent to the restructuring proceedings affecting Veracyte SAS in August 2025, the Company no longer maintains inventory associated with product sales or contract manufacturing. Inventory is stated at the lower of cost or net realizable value on a weighted average basis. We periodically analyze supply and inventory levels and expiration dates, and write down supply or inventory that has become obsolete, that has a cost basis in excess of its net realizable value, or in excess of expected sales requirements as cost of revenue. We record an allowance for excess or obsolete supplies and inventory using an estimate based on historical trends and evaluation of near-term expirations.

The functional currency of our foreign subsidiaries, Veracyte SAS andsubsidiary, C2i Genomics, Ltd., are the Euro andis the Israeli Shekel, respectively.Shekel. Assets and liabilities denominated in foreign currencies are translated to U.S. dollars using the exchange rates at the balance sheet date. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity. Revenue and expenses from our foreign subsidiariessubsidiary are translated using the monthly average exchange rates in effect during the period in which the transactions occur. Foreign currency transaction gains and losses are recorded in other income (loss), net, on the consolidated statements of operations.

Comprehensive income (loss) is the change in stockholders’ equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our comprehensive income (loss) includes our net income (loss) and gains and losses from the foreign currency translation of the assets and liabilities of our foreign subsidiaries.subsidiary.

Revenue increased $84.7$71.4 million, or 23%,16%, for the year ended December 31, 20242025 compared to 2023.2024. This was primarily due to a $92.4$74.2 million increase in testing revenue driven by a 23%19% volume increase and a 4%$0.7 averagemillion sellingincrease pricein increase,our product revenue, partially offset by a $5.8$3.5 million decrease in our Biopharmaceutical and other revenue, as well as a $1.9 million decrease in our product revenue.

Testing revenue increased by $92.4$74.2 million, or 28%,18%, driven by a $73.4$66.7 million increase in Decipher revenue and a $19.8$13.7 million increase in Afirma revenue. Testing volume increased by 23%19%, driven by Decipher volume growing to overapproximately 80,000102,000 tests, representing a year-over-year growth of 36%,27%, additionally Afirma volume grew to overapproximately 61,00067,700 tests or 12%11% growth over prior year.

Product revenue decreasedincreased $1.9$0.7 millionmillion, or 5%, for the year ended December 31, 20242025 compared to 2023,2024, driven primarily by lowerimproved demandaverage forselling productprice testper kits, largely as a result of supplier quality and supply chain issues.test.

Biopharmaceutical and other revenue decreased by $5.8$3.5 million for the year ended December 31, 20242025 compared to 20232024, drivendue primarily byto the reductiondecrease ofin customerthe projectsbusiness conducted in France given overall spending constraints across the industry.restructuring proceedings affecting Veracyte SAS in August 2025.

Cost of testing revenue increased $25.7$13.0 million, or 29%,11%, for the year ended December 31, 20242025, compared to 2023.2024. The increase in cost of testing revenue iswas due to increased variablevolume costsin associated with supplies and reagents due to volume,testing, higher staffing to support testinghigher performancevolume and the build out of infrastructure related to current and future growth expectations, primarily related to Decipher Prostate and Afirma tests.tests, partially offset by lab efficiencies.

Cost of product revenue is primarily related to sales of Prosigna test kits. Cost of product revenue increaseddecreased $0.4$0.3 million, or 5%,3%, for the year ended December 31, 20242025 compared to the same period in 2023, driven by increased overhead and expenses related to the build out of our Marseille, France manufacturing site, partially offset by variable costs due to the lower volume of tests.2024.

Cost of biopharmaceutical and other revenue includes labor costs, laboratory supplies and pass-through expenses incurred. Cost of biopharmaceutical and other revenue decreased by $2.9$4.8 million driven by reductionsthe decrease in biopharmaceutical services, as well as contract development and manufacturing services projects, prior to the ultimate deconsolidation of staffingVeracyte andSAS variablein expensesAugust related to projects.2025.

Research and development expense increased $12.0$1.5 million, or 21%,2%, for the year ended December 31, 20242025 compared to 2023.2024. The increase wasis primarily drivendue byto annual compensation expense dueand toour increasedallocated headcountcosts from general and acquiredadministrative expensesexpenses. relatedSpend to the C2i Acquisition,supporting direct research and product development expense related to our on-goingongoing development costs for our IVDCLIA tests and MRD strategies,strategies as well as projects to enhance the efficiency of our laboratories. In addition to these development costs, the increase is partially driven by clinical studies including,increased but not limited to, furthering the support and clinical utility evidence of our Percepta Nasal Swab test, as well as our urology products. These investments were partiallywas offset by the reductionimpact of the deconsolidation of Veracyte SAS in techAugust access fees recognized in 2023 under other expenses.2025.

Selling and marketing expense decreasedincreased $6.1$4.7 million, or 6%,5%, for the year ended December 31, 20242025 compared to 2023.2024. The decreaseincrease in compensation and other expense was primarily due to annual merit increases and headcount additions, offset in part by the decisionreduction toof reduce theEnvisia sales support forin our Envisia test2024 and aassociated reversalrestructuring of the stock-based compensation related to employee exits.costs. Direct marketing expense increaseddecreased primarily due to increaseddecreased trade show events.events due to the deconsolidation of Veracyte SAS in August 2025.

General and administrative expense increased $24.4$0.2 million, or 28%, for the year ended December 31, 20242025 compared to 2023.2024. Professional fees increased $11.9 million primarily due to fees related to the Veracyte SAS collective proceedings petition filing and other consulting spend. Compensation expense increased primarily due to expensesannual relatedmerit toincreases, restructuringadditional costsheadcount associatedand withhigher stock-based compensation, partially offset by the voluntaryprior terminationyear plan at our Marseille location, annual compensation increases and expensesexpense related to the C2ivoluntary Acquisition.exits of Veracyte SAS employees in connection with the deconsolidation of Veracyte SAS in August 2025. Information technology and occupancy expenses increased primarily due to ouradditional C2icloud Acquisition,infrastructure expansion ofsupporting our facilitiesMRD footprintplatform, to support testing growthTrueMRD, and infrastructure development for our Marseilleorder-to-cash site, and additional infrastructure build out.operations. Contingent consideration increaseddecreased $7.6$17.5 million primarily due to athe $5.4 million reversalrevaluation of contingent consideration expense recorded in 2023 related to ourthe acquisitions of C2i and nCounter Analysisdiagnostic System acquisition.rights. General and administrative expenses related to occupancy costs and information technology costs are allocated to general and administrative expense, selling and marketing expense, research and development expense, and cost of revenue based on the headcount and employee location.

Impairment of long-lived assets

DuringImpairment of assets during the year ended December 31, 2024 impairment of long-lived assets was $3.4 million primarily from impairment charges associated with the HalioDx developed technology, customer relationships and customer backlog finite-lived intangible assets and impairment of right-of-use asset in relation to exiting the C2i Watertown, Massachusetts facility. Impairment of long-lived assets during the year ended December 31, 2023 was $68.3 million given charges associated with the nCounter Dx license finite-lived intangible asset, HalioDx biopharmaceutical services developed technology, customer relationships and customer backlog finite-lived intangible assets and impairment of right-of-use and fixed assetsfacility in relationWatertown, to exiting the HalioDx Richmond, Virginia facility.Massachusetts.

Other income, net, increased $0.4$0.8 million for the year ended December 31, 20242025 compared to 2023,2024, primarily due to an increase of $3.8$6.0 million due to foreign currency revaluation and an increase of $1.6 million of interest and dividend income, partially offset by an increaseda loss of $2.8$6.7 million relateddue to unrealizedthe foreigndeconsolidation currencyof gain(loss).Veracyte SAS.

We recorded income tax expense of $1.8 million and $1.6 million for the yearyears ended December 31, 20242025 and recorded2024, income tax benefit of $2.2 million for the year ended December 31, 2023.respectively.

Given our current earnings, we believe that, within the next two12 years,months, sufficient positive evidence may become available to allow us to reach a conclusion that a portion of the valuation allowance recorded against the deferred tax assets held may be reversed. A reversal would result in an income tax benefit for the quarterly and annual period in which we determine to release the valuation allowance. However, the exact timing and amount of a valuation allowance release are subject to change on the basis of the level of profitability that we actually achieve.

As of December 31, 2024,2025, we had cash and cash equivalents and short-term investments of $289.4$412.9 million. During 2024,2025, our cash and cash equivalents and short-term investments increased by $73.0$123.4 million. Historically, we have obtained financing primarily through sales of our equity securities. Beginning in 2023, our operations have been financed primarily by cash flows generated by our revenue. For the year ended December 31, 2024,2025, we had net income of $24.1$66.4 million, but we may not sustain profitability in futurethe years.future. As of December 31, 2024,2025, we had an accumulated deficit of $444.0$377.6 million.

We believeexpect ourto existingcontinue to generate cash and cash equivalents and short-term investments as of December 31, 2024, and cash flows generated by our revenue during the next 12 months will be sufficient to meet our anticipated cash requirements for at least the next 12 months from the filing date of this report. We expect that our near- and longer-term liquidity requirements will continue to consist of costs to run our laboratories, research and development expenses, selling and marketing expenses, general and administrative expenses, working capital, capital expenditures, lease obligations, potential milestones associated with the C2i Acquisition, costs to fund our overseas operations, and general corporate expenses associated with the growth of our business. However, we may also use cash to acquire or invest in complementary businesses, technologies, services or products that would change our cash requirements. If we are not able to generate cash flows from our revenue to finance our cash requirements, we will need to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations or licensing arrangements. If we are not able to secure additional financing when needed, or on terms that are favorable to us, we may have to delay, reduce the scope of or eliminate one or more research and development programs or selling and marketing initiatives, or forgo potential acquisitions or investments. In addition, we may have to work with a partner on one or more of our products or development programs, which could lower the economic value of those programs to us. Moreover, any instability in the global credit markets or the banking system may impact our liquidity both in the short term and long term.

We lease office and laboratory facilities in the United States, including in South San Francisco and San Diego, California; and Austin, Texas; Marseille, France; Richmond, Virginia; and Watertown, Massachusetts,Texas, and lease certain equipment under various non-cancelable lease agreements. Effective August 2025, in connection with the restructuring proceeding in Veracyte SAS, we no longer had any responsibility related to the lease in Marseille, France. The lease terms of our leases as of December 31, 2025 extend to March 2040 and contain extension of lease term and expansion options. As of December 31, 2024,2025, the leases have a weighted average remaining lease term of 11.711.2 years and total future minimum lease payments of $94.6$72.8 million.

We are a global diagnostics company whose mission is to transform cancer care for patients all over the world. We do that empowersby empowering clinicians with the high-value insights they need to guide and assure patients at pivotal moments inalong thetheir racecancer to diagnose and treat cancer.journey. Our high-performing tests enable clinicians to make more confident diagnostic, prognostic and predictive treatment decisions, as well as theto detection ofdetect disease recurrence. Insights from theseour tests help patients avoid unnecessary procedures and interventions and accelerate time to appropriate treatment, thereby improving outcomes forand patientspersonalizing acrosscare our global markets.decisions.

We serve global markets with two complementary models. In the United States, we offer LDTslaboratory developed tests, or LDTs, through our centralized CLIA certified laboratories in South San Francisco and San Diego, California, supported by our cytopathology expertiselab in Austin, Texas. Additionally, outside of the United States, we provide IVDin vitro diagnostic, or IVD, tests to patients through distributiondiagnostic kits sold to laboratories and hospitals that can perform the tests locally. Our international distribution of IVDs is currently focused on breast cancer with our Prosigna testBreast Cancer Assay kits and, in the future, we intend to offer Decipher Prostate as an IVD test. WeIn believethe ourUnited broadStates, menuwe ofcurrently advancedoffer diagnostic tests, combined with our ability to deliver them globally, differentiates ustests in theprostate diagnosticscancer industry.(Decipher Prostate), thyroid cancer (Afirma), breast cancer (Prosigna) and bladder cancer (Decipher Bladder and TrueMRD for MIBC).

We are also aiming to further expand our role across the cancer continuum withby extending the additionuse of our minimal residual disease, or MRD platform, TrueMRD platform,test andinto ournew assays.indications. This will broaden the use of our portfolio of tests from prognosis and prediction to help monitormonitoring the success of a therapeutic or surgical intervention,intervention. andIn this way, across the cancer continuum, we can support the determination of the best course of action for each patient.

Recent macroeconomic factors, such as interest rate fluctuations and inflation in the United States and other markets, evolving international trade policies and government actions relating to tariffs, as well as volatility in the global banking and finance systems, geopolitical challenges and other measures that restrict international trade, have resulted in volatility in the capital and credit markets globally. Moreover, the continued fluctuation and reduced valuation of the U.S. dollar compared to other currencies has impacted and may continue to impact our results of operations. We intend to continue to monitor macroeconomic conditions closely and may determine to take certain financial or operational actions in response to such conditions as appropriate. In addition, macroeconomic effects of regional conflicts like those in the Middle East and between Russia and Ukraine may adversely impact our business and operating results. Finally, the ongoing conflict in the Middle East and related political, military and security conditions in and around Israel may disrupt our Israel business operations and employees that we acquired through our acquisition of 100% of the outstanding equity interests of C2i, or the C2i Acquisition.C2i.

A significant aspect of our business is our investment in development activities, including activities related to the development of new tests, as well as modifications and enhancements to our current tests, including the ongoing development of our Prosigna LDT test and TrueMRD platform. In addition to these development activities, we also perform clinical evidence studies which are critical to gaining clinician adoption of our tests, driving favorable coverage decisions by payers, as well as gaining guideline inclusion for such tests.

Through MarchJune 31,30, 2026, we derived the majority of our revenue as testing revenue from the sale of Decipher Prostate and Afirma tests, delivered primarily to physicians in the United States. We generally invoice third-party payers upon delivery of a patient report to the prescribing physician. As such, we take the assignment of benefits and the risk of cash collection from the third-party payer and individual patients. Third-party payers and other customers in excess of 10% of total revenue and their related revenue as a percentage of total revenue were as follows for the periods presented:

Research and development expenses primarily include compensation expense, direct research and development expenses such as laboratory supplies and costs associated with setting up and conducting clinical studies at domestic and international sites, software development expenses, professional fees, depreciation and amortization, other miscellaneous expenses and allocation of facility and information technology expenses. Further, research and development expenses include costs to collect clinical samples and conduct clinical studies to develop and support our products and pipeline, as well as develop future technology. We expense all research and development costs in the periods in which they are incurred. We incurred a majority of our research and development expenses in the threesix months ended MarchJune 31,30, 2026 and the year ended December 31, 2025 in support of our early-stage products, including support for the development and validation of our TrueMRD platform, as well as our Prosigna LDT test, the development of new IVD products and discovery. Going forward, we expect to incur significant expense as we invest in the continued development of our innovation engine, early-stage products including our TrueMRD platform, required clinical studies and the development of current IVD tests.

Selling and marketing expenses consist of compensation expenses, direct marketing expenses, professional fees, other expenses such as travel and communications costs, as well as allocation of facility and information technology expenses. Our sales team of approximately 120130 representatives is organized by business unit in the U.S., with separate teams calling on thyroid cancer andphysicians, urologic cancer physicians.physicians and breast medical oncologists. The business units have dedicated marketing support, as well as a marketing operations team that serves the commercial organization broadly. Prosigna sales outside of the U.S. are led by country managers and sales teams that call on laboratories and breast cancer oncologists.

General and administrative expenses include compensation expenses for executive officers and administrative, billing personnel, professional fees for legal and audit services, occupancy costs, depreciation and amortization, and other expenses such as information technology, acquisition related costs and miscellaneous expenses, offset by allocation of facility and information technology expenses to other functions. We expect general and administrative expenses to continue to increase in absolute terms as we build our infrastructure to scale revenue growth,growth andwhile to declinedeclining as a percentage of revenue thereafter.revenue.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands of dollars, except percentages and test volume):

Revenue increased $24.6$20.2 million for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. This was primarily due to a $27.8$23.4 million increase in testing revenuerevenue, partially offset by a $3.3$3.5 million decrease in our biopharmaceutical and other revenue. The 26%19% growth in testing revenue was primarily driven by a 19%14% volume increase, as well as improved ASP and prior period collections. The Biopharmaceutical and other revenue decrease was due to the discontinuation of biopharmaceutical services, contract manufacturing or contract development services previously conducted in France, following the restructuring proceedings affecting Veracyte SAS, as of August 2025.

Product revenue wasincreased flat$0.3 million and $0.4 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the same periods in 2025.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025 is as follows (in thousands of dollars, except percentages):

Cost of testing revenue increased $5.0$3.9 million, or 18%,12%, for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. The increase in cost of testing revenue was due to increased volume in testing, higher staffing to support higher volume,volume and new test launches and the build out of infrastructure related to current and future growth expectations, primarily related to Decipher Prostate and Afirma tests, and the assignment of customer service expenses directly to cost of revenue. These increases were partially offset by lab efficiencies and lower allocated expenses.

Cost of product revenue increased $0.5$0.8 million, or 33%,44%, for the three months ended MarchJune 31,30, 2026 and increased $1.2 million, or 39%, for the six months ended June 30, 2026 compared to the same periods in 2025. The increase for the three and six months ended MarchJune 31,30, 2026 is primarily related to the transition to contract manufacturing of Prosigna kits.

Cost of biopharmaceutical and other revenue includes labor costs, laboratory supplies and pass-through expenses incurred. Cost of biopharmaceutical and other revenue for the three and six months ended MarchJune 31,30, 2026 decreased by $2.7$3.4 million and $6.1 million, respectively, compared to the same periods in 2025, driven primarily by a continued decline in biopharmaceutical services, as well as contract development and manufacturing services projects as a result of the restructuring proceedings affecting Veracyte SAS that were underway throughout 2025.

Research and development expense increased $9.4$13.2 million, or 53%,81%, for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. The increase was primarily due to a $6.0$6.5 million increase from the assignment of research and development related software expenses previously accounted for in general and administrative andwhich had been partially allocated. This was due to the addition of the Chief Development and Technology Officer and that these expenses arenow nowbeing fully dedicated to product development objectives. General and administrative expense allocations and compensation expense associated with added headcount and annual merit increases also increased. Spend supporting direct research and product development expense related to our ongoing development costs for our CLIA tests and MRD strategies increased but was partially offset by the impact of the deconsolidation of Veracyte SAS in August 2025.

Selling and marketing expense increased $2.7$2.9 million, or 11%,12%, for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. The increase was primarily due to annual meritcompensation increases and headcount additions. Direct marketing expense increased primarily due to website designtradeshow costs and expenses related to the anticipated launch of new tests.

General and administrative expense decreased by $10.1$4.9 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. The results were impacted primarily by a $6.0$6.5 million decrease related to the assignment of software development expenses, previously included in General and administrative expense allocations, directly to research and development, the assignment of customer service expenses directly to cost of revenue, as well as a decline in professional fees related to lower legal, audit and tax fees in the quarter. These decreases were offset by hiring across billing and support functions to enable the growth and fewer allocations and reductions in the revaluation of contingent consideration relatedcompared to the acquisition of C2i recognized in the prior year. General and administrative expenses related to occupancy costs and information technology costs, excluding software development, are allocated to general and administrative expense, selling and marketing expense, research and development expense, and cost of revenue based on the headcount and employee location.

Other income, net, increaseddecreased $2.8$3.0 million for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, primarily due to the settlement of escrow claims of $4.2 million and an increase of $0.7 million from interest income, partially offset by a decrease of $1.5$3.7 million due to foreign currency revaluation.revaluation, partially offset by an increase of $0.9 million from interest income.

We recorded income tax expense of $1.3$1.0 million and $0.4$2.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and recorded income tax expense of $2.3 million and $2.6 million for the six months ended June 30, 2026 and 2025, respectively.

As of MarchJune 31,30, 2026, we had cash and cash equivalents and short-term investments of $439.1$485.2 million. During the threesix months ended MarchJune 31,30, 2026, our cash and cash equivalents and short-term investments increased by $26.2$72.3 million. Historically, we have obtained financing primarily through sales of our equity securities. Beginning in 2023, our operations have been financed primarily by cash flows generated by our revenue. For the threesix months ended MarchJune 31,30, 2026, we had net income of $28.7$54.2 million, but we may not sustain profitability in the future. As of MarchJune 31,30, 2026, we had an accumulated deficit of $348.9$323.4 million.

We lease office and laboratory facilities in the U.S., including in South San Francisco and San Diego, California and Austin, Texas. Effective August 2025, in connection with the restructuring proceeding in Veracyte SAS, we are no longer a party to the lease in Marseille, France. The lease terms of our leases as of MarchJune 31,30, 2026 extend to March 2040 and contain extension of lease term and expansion options. As of MarchJune 31,30, 2026, the leases have a weighted average remaining lease term of 11.010.9 years and total future minimum lease payments of $71.4$71.1 million.

The following table summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025 (in thousands of dollars):

Cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $35.2$81.0 million. Our net income of $28.7$54.2 million includes non-cash charges of $12.8$26.8 million of stock-based compensation expense, $5.4$10.3 million of depreciation and amortization, of which $3.3$6.4 million was related to intangible asset amortization, non-cash lease expense of $0.7$1.4 million, amortization of discount on short-term investments of $0.6$1.3 million, non-cash gains of $0.4$0.7 million from the revaluation of contingent consideration, loss of $0.4 million on the disposal of fixed assets, and $0.1 million from the effect of foreign currency changes on operations. Cash used as a result of changes in operating assets and liabilities was $11.7$10.0 million, primarily composed of a decrease in accrued liabilities and deferred revenue of $6.1 million, an increase in accounts receivable of $5.6$9.7 million, an increase in prepaid expenses and other current assets of $1.3$2.4 million,million and an increase in supplies of $0.9$2.1 million, a decrease in operating lease liabilities of $0.3 million partially offset by an increase in accounts payable of $2.6$3.8 million.

Cash provided by operating activities for the threesix months ended MarchJune 31,30, 2025 was $5.4$39.0 million. Our net income of $7.0$6.1 million includes non-cash charges of $11.0$21.9 million of stock-based compensation expense, $5.4$10.9 million of depreciation and amortization, of which $3.2$6.5 million was related to intangible asset amortization, $20.5 million tied to the impairment of assets, non-cash lease expense of $0.9$1.6 million, non-cash gains of $2.0$2.9 million from the revaluation of contingent considerationconsideration, amortization of discount on short-term investments of $1.9 million and $1.6$5.1 million from the effect of foreign currency changes on operations. Cash used as a result of changes in operating assets and liabilities was $14.5$12.2 million, primarily composed of a decrease in accrued liabilities and deferred revenue of $8.9 million, an increase in accounts receivable of $7.1 million, an increase in prepaid expenses and other current assets of $2.9$5.5 million, an increase in accounts receivable of $4.3 million, a decrease in accrued liabilities and deferred revenue of $2.1 million, and an increase in supplies and inventory of $2.3$2.9 millionmillion, partially offset by an increase in accounts payable of $7.1$3.1 million.

Cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $128.0$141.5 million, primarily consisting of the purchase of $125.0$134.1 million of short-term investments and $3.0$5.8 million used in the purchase of property, plant and equipment.

Cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was $51.8$52.0 million, consisting of $50.0$48.9 million from the purchase and maturity of short-term investments and $1.8$3.1 million used in the purchase of property, plant and equipment.

Cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was $6.6$2.5 million, consisting of $9.4$13.7 million in tax payments during the period related to the vesting of restricted stock units granted to employees, partially offset by $2.7$11.2 million in proceeds from the exercise of options to purchase our common stock and the purchase of stock under our Employee Stock Purchase Plan, or ESPP.

Cash used in financing activities for the threesix months ended MarchJune 31,30, 2025 was $6.5$7.1 million, consisting of $9.5$11.8 million in tax payments during the period related to the vesting of restricted stock units granted to employees, partially offset by $3.0$4.8 million in proceeds from the exercise of options to purchase our common stock and the purchase of stock under our ESPP.