A month has gone by since the last earnings report for Veracyte (VCYT). Shares have added about 9.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Veracyte due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Veracyte's Q2 Earnings Top Estimates, '24 Sales View Up

Veracyte delivered second-quarter 2024 adjusted diluted earnings of 30 cents per share, up a stupendous 150% from the year-ago period’s level. The reported figure beat the Zacks Consensus Estimate of a loss of 3 cents per share.

Revenues

Revenues increased 26.7% year over year to $114.4 million, which outpaced the Zacks Consensus Estimate by 14%.

Segmental Details

Testing revenues totaled $107 million in the reported quarter, up 31% year over year. This rise was mainly due to increased Decipher and Affirma volumes.

Product revenues fell 3% year over year to $3.9 million.

Biopharmaceutical and other revenues of $3.6 million reflected a 22% decrease from the prior-year quarter’s figure. This was mainly due to the overall spending constraints across the industry.

Margins

The total cost of revenues (product, testing, biopharmaceutical and other) was $33.6 million, up 13.2% year over year.

The gross profit rose 33.3% to $80.8 million. The gross margin expanded 350 basis points (bps) to 70.6%.

Selling and marketing expenses fell 5.9% to $24.2 million, while general and administrative expenses increased 26.7% to $31.7 million. R&D expenses totaled $16.5 million, up 31.3% year over year. The company delivered an operating profit of $8.4 million in the second quarter against an operating loss of $2.7 million during the prior-year period.

Cash, Capital Structure and Solvency

Veracyte exited the second quarter with cash and cash equivalents of $235.9 million compared with $209.2 million at the end of the first quarter of 2024.

The cumulative net cash outflow from operating activities at the end of the reported quarter was $20.6 million compared with $14.5 million at the end of the second quarter of 2023.

Guidance

Vertacyte provided a revised financial outlook for 2024.

Revenues for 2024 are now expected to be in the band of $432-$438 million (up from the previous guidance of $402-$410 million), representing year-over-year growth of 20-21% and testing revenue growth of approximately 25%. The top-line estimate is currently pegged at $406.1 million.