Genetic testing company Veracyte reported a net loss per share of USD 0.11 per share in Q1 2023, beating analysts’ estimates by 15.4%. Its Q1 net loss amounted to USD 8.1 million, improving significantly by 44% YoY. 

Revenue for the quarter grew 22% YoY to USD 82.4 million, also beating analyst consensus by 1.3%. Growth was supported by a 29% YoY increase in testing revenue mainly due to the strong performance of the firm's Decipher and Afirma tests. Additionally, the company reported a 31% YoY increase in product revenue and a 30% YoY decrease in its biopharma revenue. In addition, the company grew total test volume to 28,788 in Q1 2023, improving significantly by 24% YoY. 

The total gross margin for the quarter stood at 62% (compared to 58% in Q1 2022) while operating expenses increased by 14% YoY to USD 61.9 million due to higher R&D expenses (up 39.3% YoY).

Additionally, in Q1 2023, Veracyte announced multiple achievements. Among these is the expansion of the Afirma offering by incorporating TERT promoter mutation testing. This advancement aids in providing additional guidance for treatment decisions for patients with suspected or confirmed thyroid cancer. Veracyte also secured four new payer agreements for Afirma GSC. As a result, the test is now covered as an in-network benefit for an additional four million people enrolled in various health plans.

Cash, cash equivalents, and short-term investments at the end of Q1 2023 stood at USD 177.9 million. In terms of guidance for 2023, Veracyte increased revenue expectations to a range of USD 330 million–340 million, implying a growth rate of 11%–15%, as the company anticipates mid-to-high teens YoY growth of testing and product revenue to be offset by a decline in biopharmaceutical and other revenue for 2023.