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Stockholders' Equity

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

The Company had reserved shares of common stock for issuance as follows:


	September 30, 2024	December 31, 2023
Stock options and restricted stock units issued and outstanding	6,172,572	6,318,389
Stock options and restricted stock units available for grant under stock option plans	8,854,664	5,194,399
Common stock available for the Employee Stock Purchase Plan	1,051,407	1,189,513
Total	16,078,643	12,702,301

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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+ Details

Business Combination (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the C2i Acquisition at the Closing Date (in thousands):


	Amount
Assets acquired:
Cash and cash equivalents	$	13,677
Prepaid expenses and other current assets	998
Property, plant and equipment, net	277
Right of use assets, operating leases	1,277
Intangible assets, net	31,500
Restricted cash	188
Total identifiable assets acquired	47,917
Accounts payable	(59)
Accrued Liabilities	(1,540)
Current portion of deferred revenue	(94)
Current portion of operating lease liabilities	(441)
Deferred tax liability	(726)
Operating lease liabilities, net of current portion	(836)
Net identifiable assets acquired	44,221
Goodwill	55,974
Total purchase price	$	100,195

Schedule of Intangible Assets Acquired

The preliminary fair value of the Company's intangible assets as of the acquisition date and the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in thousands, except useful life which is in years):

Fair Value

Estimated Useful Life

Valuation Method

Intangible Assets Acquired:

Developed Technology

25,300

Relief from royalty method

IPR&D assets

6,200

Indefinite

Multi-period excess earnings method

Total intangible assets acquired

31,500

Schedule of Pro Forma Financial Information

Further, adjustments related to transaction costs and stock- based compensation expense are also reflected in the pro forma financial information in the table below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Total revenue	$	115,860	$	90,342	$	327,132	$	263,308
Net income (loss)	$	15,571	$	(34,655)	$	16,858	$	(70,620)

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Balance at beginning of period (in shares) at Dec. 31, 2022		71,959,000
Balance at beginning of period at Dec. 31, 2022	$ 1,075,200	$ 72	$ 1,500,191	$ (393,717)	$ (31,346)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock on exercise of stock options and vesting of restricted stock units (in shares)		888,000
Issuance of common stock on exercise of stock options and vesting of restricted stock units	4,653	$ 1	4,652
Issuance of common stock under employee stock purchase plan (ESPP) (in shares)		147,000
Issuance of common stock under employee stock purchase plan (ESPP)	3,153		3,153
Tax portion of vested restricted stock units	(5,614)		(5,614)
Stock-based compensation expense (employee)	24,337		24,337
Stock-based compensation expense (ESPP)	1,292		1,292
Net income (loss)	(46,111)			(46,111)
Other comprehensive income (loss)	(2,851)				(2,851)
Balance at end of period (in shares) at Sep. 30, 2023		72,994,000
Balance at end of period at Sep. 30, 2023	1,054,059	$ 73	1,528,011	(439,828)	(34,197)
Balance at beginning of period (in shares) at Jun. 30, 2023		72,643,000
Balance at beginning of period at Jun. 30, 2023	1,082,718	$ 73	1,520,638	(410,210)	(27,783)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock on exercise of stock options and vesting of restricted stock units (in shares)		297,000
Issuance of common stock on exercise of stock options and vesting of restricted stock units	1,377		1,377
Issuance of common stock under employee stock purchase plan (ESPP) (in shares)		54,000
Issuance of common stock under employee stock purchase plan (ESPP)	1,179		1,179
Tax portion of vested restricted stock units	(2,446)		(2,446)
Stock-based compensation expense (employee)	6,842		6,842
Stock-based compensation expense (ESPP)	421		421
Net income (loss)	(29,618)			(29,618)
Other comprehensive income (loss)	(6,414)				(6,414)
Balance at end of period (in shares) at Sep. 30, 2023		72,994,000
Balance at end of period at Sep. 30, 2023	$ 1,054,059	$ 73	1,528,011	(439,828)	(34,197)
Balance at beginning of period (in shares) at Dec. 31, 2023	73,264,738	73,265,000
Balance at beginning of period at Dec. 31, 2023	$ 1,044,102	$ 73	1,536,168	(468,121)	(24,018)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock and options for acquisition (in shares)		2,698,000
Issuance of common stock and options for acquisition	74,145	$ 3	74,142
Issuance of common stock on exercise of stock options and vesting of restricted stock units (in shares)		1,390,000
Issuance of common stock on exercise of stock options and vesting of restricted stock units	13,843	$ 1	13,842
Issuance of common stock under employee stock purchase plan (ESPP) (in shares)		138,000
Issuance of common stock under employee stock purchase plan (ESPP)	2,886		2,886
Tax portion of vested restricted stock units	(7,315)		(7,315)
Stock-based compensation expense (employee)	25,636		25,636
Stock-based compensation expense (ESPP)	984		984
Net income (loss)	19,025			19,025
Other comprehensive income (loss)	$ 2,736				2,736
Balance at end of period (in shares) at Sep. 30, 2024	77,491,212	77,491,000
Balance at end of period at Sep. 30, 2024	$ 1,176,042	$ 77	1,646,343	(449,096)	(21,282)
Balance at beginning of period (in shares) at Jun. 30, 2024		76,744,000
Balance at beginning of period at Jun. 30, 2024	1,132,523	$ 77	1,627,307	(464,251)	(30,610)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock on exercise of stock options and vesting of restricted stock units (in shares)		689,000
Issuance of common stock on exercise of stock options and vesting of restricted stock units	11,281		11,281
Issuance of common stock under employee stock purchase plan (ESPP) (in shares)		58,000
Issuance of common stock under employee stock purchase plan (ESPP)	1,190		1,190
Tax portion of vested restricted stock units	(2,182)		(2,182)
Stock-based compensation expense (employee)	8,335		8,335
Stock-based compensation expense (ESPP)	412		412
Net income (loss)	15,155			15,155
Other comprehensive income (loss)	$ 9,328				9,328
Balance at end of period (in shares) at Sep. 30, 2024	77,491,212	77,491,000
Balance at end of period at Sep. 30, 2024	$ 1,176,042	$ 77	$ 1,646,343	$ (449,096)	$ (21,282)

Organization , Description of Business and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Third-party Payers as a Percentage of Total

The Company’s total 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:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Medicare	31	%	32	%	31	%	32	%
UnitedHealthcare	13	%	10	%	14	%	11	%
	44	%	42	%	45	%	43	%

The Company's significant third-party payers in excess of 10% of total accounts receivable and their related accounts receivable balance as a percentage of total accounts receivable were as follows:


	September 30, 2024		December 31, 2023
Medicare	16	%	20	%
UnitedHealthcare	15	%	7	%

Schedule of Revenue

Revenue included in biopharmaceutical and other revenue for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Biopharmaceutical revenue	$	2,041	$	2,833	$	5,962	$	10,591
Contract manufacturing and testing	1,095		1,243		3,730		4,181
Total	$	3,136	$	4,076	$	9,692	$	14,772

Balance Sheet Components - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 151,410	$ 125,993
Accumulated Amortization	(56,037)	(44,700)
Total	95,373	81,293
Indefinite-lived intangible assets	13,500	7,300
Total intangible assets	164,910	133,293
Intangible assets, net	$ 108,873	88,593
Weighted Average Remaining Amortization Period (Years)	8 years 4 months 24 days
Percepta product technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 16,000	16,000
Accumulated Amortization	(10,133)	(9,333)
Total	$ 5,867	6,667
Weighted Average Remaining Amortization Period (Years)	5 years
Prosigna product technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 4,120	4,120
Accumulated Amortization	(1,328)	(1,122)
Total	$ 2,792	2,998
Weighted Average Remaining Amortization Period (Years)	10 years
Prosigna customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 2,430	2,430
Accumulated Amortization	(2,349)	(1,985)
Total	81	445
LymphMark product technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	990	990
Accumulated Amortization	(684)	(577)
Total	$ 306	413
Weighted Average Remaining Amortization Period (Years)	2 years
Decipher product technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 90,000	90,000
Accumulated Amortization	(31,984)	(25,234)
Total	$ 58,016	64,766
Weighted Average Remaining Amortization Period (Years)	6 years
Decipher trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 4,000	4,000
Accumulated Amortization	(2,843)	(2,243)
Total	$ 1,157	1,757
Weighted Average Remaining Amortization Period (Years)	1 year
HalioDx developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,457	1,435
Accumulated Amortization	(461)	(346)
Total	$ 996	1,089
Weighted Average Remaining Amortization Period (Years)	7 years
HalioDx customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 2,797	2,760
Accumulated Amortization	(1,770)	(1,331)
Total	$ 1,027	1,429
Weighted Average Remaining Amortization Period (Years)	2 years
HalioDx customer backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 4,316	4,258
Accumulated Amortization	(3,364)	(2,529)
Total	$ 952	1,729
Weighted Average Remaining Amortization Period (Years)	1 year
C2i developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 25,300	0
Accumulated Amortization	(1,121)	0
Total	$ 24,179	$ 0
Weighted Average Remaining Amortization Period (Years)	14 years

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net income (loss)	$ 15,155	$ (29,618)	$ 19,025	$ (46,111)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Business Combination - Schedule of Intangible Assets Acquired (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Feb. 05, 2024
Acquired Indefinite-lived Intangible Assets [Line Items]
Estimated Useful Life	8 years 4 months 24 days
C2i
Acquired Indefinite-lived Intangible Assets [Line Items]
Fair Value		$ 31,500
C2i \| In-process research and development
Acquired Indefinite-lived Intangible Assets [Line Items]
Fair Value		6,200
C2i \| Developed Technology
Acquired Indefinite-lived Intangible Assets [Line Items]
Fair Value		$ 25,300
Estimated Useful Life		15 years

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

The Company leases office and laboratory facilities in South San Francisco and San Diego, California; Austin, Texas; Marseille, France; Richmond, Virginia; and Watertown, Massachusetts, and leases certain equipment under various non-cancelable lease agreements. The lease terms extend to May 2036 and contain extension of lease terms and expansion options. The leases have a weighted average remaining lease term of 6.6 years as of September 30, 2024. The Company had deposits of $1.1 million and $0.9 million included in long-term assets as of September 30, 2024 and December 31, 2023, respectively,

restricted from withdrawal and held by banks in the form of collateral for irrevocable standby letters of credit held as security for the leases.

The Company determined its operating lease liabilities using payments through their current expiration dates and a weighted average discount rate of 9.9% based on the rate that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments in a similar economic environment. Operating lease liabilities along with the associated right-of-use assets are disclosed in the accompanying condensed consolidated balance sheets. After the adoption of ASC 842, Leases, or ASC 842, the Company classified its deferred rent for tenant improvements with its operating lease right-of-use assets on the consolidated balance sheets.

Future minimum lease payments under non-cancelable operating leases as of September 30, 2024 are as follows (in thousands of dollars):


Year Ending December 31,	Amounts
Remainder of 2024	$	1,988
2025	7,832
2026	3,284
2027	2,029
2028	1,995
Thereafter	10,399
Total future minimum lease payments	27,527
Less: amount representing interest	7,833
Present value of future lease payments	19,694
Less: short-term lease liabilities	7,294
Long-term lease liabilities	$	12,400

The Company recognizes operating lease expense on a straight-line basis over the non-cancelable lease period. The following table summarizes operating lease expense and cash paid for amounts included in the measurement of lease liabilities (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease expense	$	1,824	$	1,429	$	4,914	$	3,830
Cash paid for amounts included in the measurement of lease liabilities	$	1,967	$	1,367	$	5,274	$	3,906

The company has leased laboratory equipment under various financing leases. Both the total right-of-use assets and total financing lease liabilities for these financing leases were $0.1 million as of both September 30, 2024 and December 31, 2023, and are included in property, plant and equipment, net and other liabilities in the accompanying condensed consolidated balance sheets.

The Company entered into a lease agreement for a newly constructed facility in Marseille, France. The lease commenced during the nine months ended September 30, 2024 and the Company recorded a lease liability and a corresponding ROU asset of $8.0 million. The initial term of the lease is twelve years with annual rent of approximately $1.3 million, excluding common area maintenance costs.

Contingencies

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company believes there is no litigation pending that could have, either individually or in the aggregate, a material impact on the Company's consolidated financial statements.

Organization, Description of Business and Summary of Significant Accounting Policies - Schedule of Third-party Payers And Other Customers (Details) - Customer Concentration Risk	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Revenue \| Customers Representing >10% Of Total Revenue
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk	44.00%	42.00%	45.00%	43.00%
Revenue \| Medicare
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk	31.00%	32.00%	31.00%	32.00%
Revenue \| UnitedHealthcare
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk	13.00%	10.00%	14.00%	11.00%
Accounts Receivable \| Medicare
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk			16.00%		20.00%
Accounts Receivable \| UnitedHealthcare
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk			15.00%		7.00%

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Reserved Shares of Common Stock for Issuance

The Company had reserved shares of common stock for issuance as follows:


	September 30, 2024	December 31, 2023
Stock options and restricted stock units issued and outstanding	6,172,572	6,318,389
Stock options and restricted stock units available for grant under stock option plans	8,854,664	5,194,399
Common stock available for the Employee Stock Purchase Plan	1,051,407	1,189,513
Total	16,078,643	12,702,301

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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+ Details

Organization, Description of Business and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Description of Business and Summary of Significant Accounting Policies

Veracyte, Inc., or Veracyte, or the Company, is a global diagnostics company that provides clinicians with tests for patients with, or potentially facing, a cancer diagnosis. Veracyte's tests are used by clinicians for diagnostic, prognostic and treatment decisions.

Veracyte was incorporated in the state of Delaware on August 15, 2006, as Calderome, Inc. Calderome, Inc. operated as an incubator until early 2008. On March 4, 2008, the Company changed its name to Veracyte, Inc. The Company’s headquarters are in South San Francisco, California, and it also has operations in San Diego, California; Austin, Texas; and Marseille, France.

The Company currently offers tests in prostate cancer (Decipher Prostate); thyroid cancer (Afirma); breast cancer (Prosigna); and bladder cancer (Decipher Bladder). The Company’s Percepta Nasal Swab test is being run in its Clinical Laboratory Improvement Amendments of 1988, or CLIA, certified lab in support of clinical studies and its test for lymphoma is in development as a companion diagnostic.

The Company serves global markets with two complementary models. In the United States, it offers laboratory developed tests, or LDTs, through its centralized, CLIA certified laboratories in South San Francisco and San Diego, California, supported by its cytopathology expertise in Austin, Texas. Additionally, primarily outside of the United States, the Company provides its Prosigna test to patients through distribution to laboratories and hospitals that can perform the tests locally as an IVD test.

In February 2024, the Company acquired C2i, a minimal residual disease, or MRD, detection company. Refer to Note 4 Business Combination for additional information.

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of September 30, 2024, the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2024 and 2023, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results, stockholders' equity and cash flows for the periods presented. The condensed consolidated balance sheet as of December 31, 2023 has been derived from audited financial statements. The results for the three and nine months ended September 30, 2024 are not indicative of the results expected for the full year or any other period. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company operates in one segment.

The accompanying interim period condensed consolidated financial statements and related financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Reclassifications

Certain prior period balances have been reclassified to conform to current period presentation of the Company’s consolidated financial statements and accompanying notes. Such reclassifications have no effect on previously reported results of operations, accumulated deficit, subtotals of operating, investing or financing cash flows or consolidated balance sheet totals; however, for the three and nine months ended September 30, 2023, the Company reclassified $4.8 million and $14.4 million, respectively, of amortization of intangible assets from the intangible asset amortization - operating expense caption in the condensed consolidated statements of operations to a separate caption, intangible asset amortization - cost of revenue, within a new cost of revenue section.

Use of Estimates

The preparation of unaudited interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; the useful lives of property, plant and equipment; the recoverability of long-lived assets; the incremental borrowing rates for leases; accounting for acquisitions; the estimation of the fair value of intangible assets and contingent consideration; stock based compensation; income tax uncertainties, including a valuation allowance for deferred tax assets; credit related losses on investments; and allowance for credit losses and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Concentrations of Credit Risk and Other Risks and Uncertainties

The majority of the Company’s cash and cash equivalents are deposited with two major financial institutions in the United States. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company has not realized any losses on its deposits of cash and cash equivalents other than exchange rate losses related to foreign currency denominated accounts.

Several of the components of the Company’s sample collection kits and CLIA test reagents, IVD products and associated systems, as well as the systems service and service kits, are obtained from single-source suppliers. If these single-source suppliers fail to satisfy the Company’s requirements on a timely basis, or are unable to provide the Company with reagents that perform to specifications, the Company could suffer delays in being able to deliver its diagnostic solutions, suffer a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results.

Through September 30, 2024, the Company has derived most of its revenue from the sale of Decipher Prostate and Afirma testing. To date, Decipher Prostate and Afirma testing have been delivered primarily to physicians in the United States.

The Company is also subject to credit risk from its accounts receivable related to its sales. Credit risk for accounts receivable from testing revenue is incorporated in testing revenue accrual rates as the Company assesses historical collection rates and current developments to determine accrual rates and amounts the Company will ultimately collect. The Company generally does not perform evaluations of customers’ financial condition for testing revenue and generally does not require collateral. The Company assesses credit risk and the amount of accounts receivable the Company will ultimately collect for product, biopharmaceutical and other revenue based on collection history, current developments and credit worthiness of the customer. The estimate of credit losses is not material at September 30, 2024.

The Company’s total 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:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Medicare	31	%	32	%	31	%	32	%
UnitedHealthcare	13	%	10	%	14	%	11	%
	44	%	42	%	45	%	43	%

The Company's significant third-party payers in excess of 10% of total accounts receivable and their related accounts receivable balance as a percentage of total accounts receivable were as follows:


	September 30, 2024		December 31, 2023
Medicare	16	%	20	%
UnitedHealthcare	15	%	7	%

Cash and Cash Equivalents

The Company considers demand deposits in a bank, money market funds and highly liquid investments with an original maturity of 90 days or less to be cash equivalents.

Restricted Cash

The Company had deposits of $1.1 million and $0.9 million included in long-term assets as of September 30, 2024 and December 31, 2023, respectively, restricted from withdrawal and held by banks in the form of collateral for irrevocable standby letters of credit held as security for the Company's leases.

Revenue Recognition

The Company recognizes revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606. 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 the Company has completed a service or transferred control of a product to the customer.

In arrangements involving more than one service or good, each required service or good is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the service or good either on its own or together with other resources that are readily available and (ii) the service or good is separately identifiable from other promises in the contract. The consideration under the arrangement is then allocated to each separate distinct performance obligation based on its respective relative stand-alone selling price. The estimated selling price of each deliverable reflects the Company's best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis or using an adjusted market assessment approach if selling price on a stand-alone basis is not available. The consideration allocated to each distinct performance obligation is recognized as revenue when control is transferred which may be at a point in time or over time.

Testing Revenue

The Company recognizes revenue from the sale of 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, the Company determines that an implied contract exists with its customers for whom a physician will order the test. The Company identifies each sale of its 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 a customer represents variable consideration. The Company estimates the variable consideration under the portfolio approach and considers 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. The Company monitors 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. The Company analyzes its actual cash collections over the expected reimbursement period and compares it with the estimated variable consideration for each payer 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. For the three and nine months ended September 30, 2024 and 2023, the Company recorded $3.1 million and $10.0 million and $0.9 million and $5.5 million as revenue, respectively, resulting from cash collections exceeding the estimated variable consideration related to tests reported in previous years, including revenue received from successful appeals of reimbursement denials, net of recoupments.

Product Revenue

The Company's product revenue primarily consists of the Prosigna IVD breast cancer assay, related diagnostic kits and services. Product revenue from diagnostic kits is generally recognized upon shipment. Shipping and handling costs incurred for product shipments are included in product revenue. Revenue is presented net of the taxes that are collected from customers and remitted to governmental authorities.

Biopharmaceutical and Other Revenue

The Company enters into arrangements to license or provide access to its assets or services, including clinical and testing services, research and development, contract manufacturing and development, as well as other services, which are classified under biopharmaceutical and other revenue. Such arrangements may require the Company to deliver various rights, data, test results, manufactured diagnostic test kits, services and/or samples, including intellectual property rights/licenses and biopharmaceutical research and development services. The Company receives consideration in the form of upfront license fees; payments on delivery of data, test results or manufactured products; costs of service plus margin; and development and commercial performance milestone payments.

The Company develops estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price may include independent evidence of market price, forecasted revenue or costs, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if the obligation can be satisfied at a point in time or over time, and it measures the services delivered to the collaborative partner which are periodically reviewed based on the progress of the related program. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. The effect of any change made to an estimated input component and, therefore revenue or expense recognized, would be recorded as a change in estimate. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. Milestone payments that are not within either party’s control, such as non-operational developmental and regulatory approvals, are generally not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones that are within either party’s control, such as operational developmental milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and earnings in the period of adjustment. Revisions to the Company’s estimate of the transaction price may also result in negative revenue and earnings in the period of adjustment. One collaboration arrangement with milestone payments falls under the scope of ASC Topic 808, Collaborative Arrangements, or ASC 808. These milestone payments are recognized in the same manner as milestone payments from customers and are classified under biopharmaceutical and other revenue.

Accounts receivable from biopharmaceutical and other revenue was $3.0 million at September 30, 2024 and $6.0 million at December 31, 2023. There was $2.0 million of deferred revenue related to these agreements at both September 30, 2024 and December 31, 2023. Revenue included in biopharmaceutical and other revenue for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Biopharmaceutical revenue	$	2,041	$	2,833	$	5,962	$	10,591
Contract manufacturing and testing	1,095		1,243		3,730		4,181
Total	$	3,136	$	4,076	$	9,692	$	14,772

Cost of Testing Revenue

The components of the Company's cost of testing services are laboratory expenses, sample collection 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 expensed as the test is processed regardless of whether and when revenue is recognized with respect to that test.

Cost of Product Revenue

Cost of product revenue consists primarily of costs of purchasing diagnostic kit components, labor, installation, service and packaging and delivery costs. In addition, cost of product includes royalty costs for licensed technologies included in the Company’s products. Material related cost of product revenue is recognized in the period the related revenue is recognized. Labor and other costs are costs are recognized as they are incurred. Shipping and handling costs incurred for product shipments are included in cost of product in the condensed consolidated statements of operations.

Cost of Biopharmaceutical and Other Revenue

Cost of biopharmaceutical and other revenue consists of costs of performing activities under arrangements that require the Company to license or provide access to its assets or services, including clinical and testing services, research and development, contract manufacturing and development, as well as other services.

Pension Liability

The Company offers a defined benefit pension plan to certain non-U.S. employees of its Veracyte SAS subsidiary. As of September 30, 2024 and December 31, 2023, the total pension obligation was $0.6 million and $0.8 million, respectively, and is included in other liabilities on the condensed consolidated balance sheets.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. This ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in the Company's consolidated financial statements, once adopted.

Fair Value Measurements - Schedule of Fair Value Measurement Input (Details)	Sep. 30, 2024	Dec. 31, 2023
Discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input		0.068
Discount rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.046
Discount rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.058
Discount rate \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.048
Probability of achievement \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0	0.10
Probability of achievement \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.95	0.80
Probability of achievement \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.88	0.69

Balance Sheet Components - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Balance Sheet Related Disclosures [Abstract]
Amortization of Intangible Assets	$ 3,800	$ 5,300	$ 11,200	$ 16,000
Impairment of long-lived assets	$ 185	$ 34,900	$ 614	$ 36,310

Business Combination - Schedule of Pro Forma Financial Information (Details) - C2i - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Total revenue	$ 115,860	$ 90,342	$ 327,132	$ 263,308
Net income (loss)	$ 15,571	$ (34,655)	$ 16,858	$ (70,620)

Components of Other Income (Tables)

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

Schedule of Other Income, net

Other income, net consists of the following (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
French research tax credits	$	468	$	552	$	1,391	$	78
Interest income	2,898		2,071		8,293		4,518
Interest expense	(1)		(2)		(2)		(13)
Gain (loss) on currency revaluation	1,487		(786)		756		(640)
Other	(21)		132		(104)		205
	$	4,831	$	1,967	$	10,334	$	4,148

Business Combination

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Combination

On February 5, 2024, or the Closing Date, the Company acquired 100% of the outstanding equity interests of C2i, or the C2i Acquisition. C2i was a privately-held company that developed a novel method for estimating tumor burden in cancer patients by analyzing a patient’s cell free DNA sequence and offered post-treatment monitoring of cancer recurrence and progression by analyzing subtle changes in the pattern of the tumor’s DNA. The consideration to acquire C2i was $100.2 million, comprised of $73.3 million in the form of approximately 2.7 million shares of the Company’s common stock based on the Company's share price on the Closing Date, $0.8 million of pre-combination portion of replacement stock options issued to C2i’s continuing employees, $17.2 million of contingent consideration that has been agreed to be paid on achievement of certain milestones and the remainder in cash. The Company incurred $5.1 million of transaction costs related to the C2i Acquisition, which were recorded as general and administrative expense.

As part of the agreement, the Company deposited $8.0 million of the cash consideration into escrow for meeting any unresolved or unsatisfied claims for indemnifiable damages against C2i and any special tax claims. The balance after meeting these indemnification obligations will be paid directly to the securityholders of C2i. After deducting the expenses for indemnifiable damages and tax claims the escrow amount of $5.0 million will be released 18 months from the Closing Date and the balance of $3.0 million will be released 36 months after the Closing Date. As this payment is dependent on the resolution of claims that existed as of the Closing Date, the amount deposited into escrow is included in the purchase price.

In addition, pursuant to the Agreement and Plan of Merger, dated as of January 5, 2024, by and among the Company, C2i, Canary Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Company, Veracyte Diagnostics, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company, and Fortis Advisors LLC, as the securityholders’ agent, or the Merger Agreement, the C2i noteholders are entitled to receive from the Company up to $25.0 million in contingent consideration that is dependent on the achievement of specified training requirements, licensing, regulatory and commercialization milestones and are payable in cash or shares of the Company’s common stock, at the Company's election.

The Company included financial results of C2i in its consolidated financial statements from the acquisition date, which contributed zero and $1.4 million of revenue and operating loss, respectively, during the three months ended September 30, 2024 and zero and $7.5 million of revenue and operating loss, respectively, during the nine months ended September 30, 2024 including $1.3 million of severance and retention charges and $0.9 million of impairment of right-of-use asset and intangible asset amortization.

Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the C2i Acquisition at the Closing Date (in thousands):


	Amount
Assets acquired:
Cash and cash equivalents	$	13,677
Prepaid expenses and other current assets	998
Property, plant and equipment, net	277
Right of use assets, operating leases	1,277
Intangible assets, net	31,500
Restricted cash	188
Total identifiable assets acquired	47,917
Accounts payable	(59)
Accrued Liabilities	(1,540)
Current portion of deferred revenue	(94)
Current portion of operating lease liabilities	(441)
Deferred tax liability	(726)
Operating lease liabilities, net of current portion	(836)
Net identifiable assets acquired	44,221
Goodwill	55,974
Total purchase price	$	100,195

Based on the guidance provided in ASC 805 Business Combinations, the Company accounted for the C2i Acquisition as a business combination in which the Company determined that C2i was a business which combines inputs and processes to create outputs, and substantially all of the fair value of gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets.

The Company's purchase price allocation for the C2i Acquisition is preliminary and subject to revision as additional information about the fair value of the assets and liabilities becomes available. The fair values assigned to tangible and intangible assets acquired, and liabilities assumed, are based on management’s estimates and assumptions and may be subject to change as additional information is received. Primary areas that are not yet finalized are related to certain income tax items, intangible assets and goodwill. Additional information that existed as of the closing date but not known at the time of this filing may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the Closing Date.

The intangible assets acquired included IPR&D assets and developed technology. The preliminary fair value of the Company's intangible assets as of the acquisition date and the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in thousands, except useful life which is in years):

Fair Value

Estimated Useful Life

Valuation Method

Intangible Assets Acquired:

Developed Technology

25,300

Relief from royalty method

IPR&D assets

6,200

Indefinite

Multi-period excess earnings method

Total intangible assets acquired

31,500

The amortization expense for all acquired intangible assets will be recognized on a straight-line basis and recorded within intangible asset amortization.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The C2i acquisition resulted in the recognition of $56.0 million of goodwill which the Company believes consists primarily of expanded market and product opportunities, including an MRD platform, which will enable new areas of genomic testing.

In connection with the C2i Acquisition, a net deferred tax liability was assumed with a fair value of $0.7 million which primarily relates to future intangible asset amortization which is not deductible for income tax purposes.

Pro forma financial information (unaudited)

The supplemental pro forma financial information has been prepared using the acquisition method of accounting and is based on the historical financial information of C2i. The supplemental pro forma financial information does not necessarily represent what the combined companies' revenue or results of operations would have been had the acquisitions been completed on January 1, 2023, nor is it intended to be a projection of future operating results of the combined company. It also does not reflect any operating efficiencies or potential cost savings that might be achieved from synergies of combining C2i and the Company.

The unaudited supplemental pro forma financial information has been calculated after adjusting the results of the combined company to reflect incremental amortization expense resulting from the fair value adjustments for acquired intangible assets. Further, adjustments related to transaction costs and stock- based compensation expense are also reflected in the pro forma financial information in the table below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Total revenue	$	115,860	$	90,342	$	327,132	$	263,308
Net income (loss)	$	15,571	$	(34,655)	$	16,858	$	(70,620)

Organization, Description of Business and Summary of Significant Accounting Policies - Schedule of Biopharmaceutical and Other Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 115,860	$ 90,108	$ 327,132	$ 262,852
Biopharmaceutical revenue
Disaggregation of Revenue [Line Items]
Total revenue	2,041	2,833	5,962	10,591
Contract manufacturing and testing
Disaggregation of Revenue [Line Items]
Total revenue	1,095	1,243	3,730	4,181
Biopharmaceutical and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	$ 3,136	$ 4,076	$ 9,692	$ 14,772

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

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+ Details

Stockholders' Equity (Details) - shares	Sep. 30, 2024	Dec. 31, 2023
Class of Stock [Line Items]
Total number of shares reserved for issuance (in shares)	16,078,643	12,702,301
Shares of common stock subject to outstanding options
Class of Stock [Line Items]
Stock options and restricted stock units issued and outstanding (in shares)	6,172,572	6,318,389
Shares available for issuance (in shares)	8,854,664	5,194,399
Common stock available for the Employee Stock Purchase Plan
Class of Stock [Line Items]
Shares available for issuance (in shares)	1,051,407	1,189,513

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Net Income (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Earnings Per Share

The following table sets forth the computation of basic and diluted EPS (in thousands, except per-share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator for basic and diluted EPS — net income (loss) (A)	$	15,155	$	(29,618)	$	19,025	$	(46,111)
Denominator for basic EPS — weighted average shares (B)	77,014		72,805		76,107		72,489
Effect of potentially dilutive common stock from:
Shares of common stock subject to outstanding options	511		—		503		—
Restricted stock units	907		—		696		—
Employee stock purchase plan	33		—		34		—
Dilutive potential common shares	1,451		—		1,233		—
Denominator for diluted EPS — adjusted weighted average shares and assumed conversions (C)	78,465		72,805		77,340		72,489
Basic EPS (A / B)	$	0.20	$	(0.41)	$	0.25	$	(0.64)
Diluted EPS (A / C)	$	0.19	$	(0.41)	$	0.25	$	(0.64)
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Shares of common stock subject to outstanding options	1,769		3,812		2,341		3,851
Restricted stock units	104		2,793		140		2,709
Employee stock purchase plan	—		32		—		33
Anti-dilutive potential common shares	1,873		6,637		2,481		6,593

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	77,491,212	73,264,738
Common stock, shares outstanding (in shares)	77,491,212	73,264,738

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Total revenue	$ 115,860,000	$ 90,108,000	$ 327,132,000	$ 262,852,000
Cost of revenue:
Intangible asset amortization - cost of revenue	2,917,000	4,811,000	8,741,000	14,429,000
Total cost of revenue	36,850,000	32,421,000	107,741,000	97,956,000
Gross profit	79,010,000	57,687,000	219,391,000	164,896,000
Operating expenses:
Research and development	17,574,000	13,322,000	50,004,000	38,632,000
Selling and marketing	22,612,000	24,344,000	70,610,000	76,230,000
General and administrative	25,742,000	16,334,000	83,697,000	62,434,000
Impairment of long-lived assets	185,000	34,900,000	614,000	36,310,000
Total operating expenses	66,993,000	89,426,000	207,424,000	215,184,000
Income (loss) from operations	12,017,000	(31,739,000)	11,967,000	(50,288,000)
Other income, net	4,831,000	1,967,000	10,334,000	4,148,000
Income (loss) before income taxes	16,848,000	(29,772,000)	22,301,000	(46,140,000)
Income tax provision (benefit)	1,693,000	(154,000)	3,276,000	(29,000)
Net income (loss)	$ 15,155,000	$ (29,618,000)	$ 19,025,000	$ (46,111,000)
Earnings (loss) per share:
Basic (in USD per share)	$ 0.20	$ (0.41)	$ 0.25	$ (0.64)
Diluted (in USD per share)	$ 0.19	$ (0.41)	$ 0.25	$ (0.64)
Shares used to compute earnings (loss) per common share:
Basic (in shares)	77,013,831	72,804,770	76,107,302	72,488,601
Diluted (in shares)	78,464,654	72,804,770	77,339,897	72,488,601
Testing revenue
Revenue:
Total revenue	$ 109,536,000	$ 82,012,000	$ 306,809,000	$ 236,157,000
Cost of revenue:
Cost of revenue	29,029,000	21,827,000	82,928,000	64,808,000
Product revenue
Revenue:
Total revenue	3,188,000	4,020,000	10,631,000	11,923,000
Cost of revenue:
Cost of revenue	1,792,000	2,436,000	6,310,000	6,913,000
Biopharmaceutical and other revenue
Revenue:
Total revenue	3,136,000	4,076,000	9,692,000	14,772,000
Cost of revenue:
Cost of revenue	3,112,000	3,347,000	9,762,000	11,806,000
Intangible Asset Amortization
Operating expenses:
Intangible asset amortization - operating expenses	$ 880,000	$ 526,000	$ 2,499,000	$ 1,578,000

Commitments and Contingencies - Schedule of Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease expense	$ 1,824	$ 1,429	$ 4,914	$ 3,830
Cash paid for amounts included in the measurement of lease liabilities	$ 1,967	$ 1,367	$ 5,274	$ 3,906

Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Numerator for basic EPS — net income (loss)	$ 15,155	$ (29,618)	$ 19,025	$ (46,111)
Numerator for diluted EPS — net income (loss)	$ 15,155	$ (29,618)	$ 19,025	$ (46,111)
Denominator for basic EPS — weighted average shares (in shares)	77,013,831	72,804,770	76,107,302	72,488,601
Effect of potentially dilutive common stock from:
Dilutive potential common shares (in shares)	1,451,000	0	1,233,000	0
Denominator for diluted EPS — adjusted weighted average shares and assumed conversions (in shares)	78,464,654	72,804,770	77,339,897	72,488,601
Basic EPS (in USD per share)	$ 0.20	$ (0.41)	$ 0.25	$ (0.64)
Diluted EPS (in USD per share)	$ 0.19	$ (0.41)	$ 0.25	$ (0.64)
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Anti-dilutive potential common shares (in shares)	1,873,000	6,637,000	2,481,000	6,593,000
Shares of common stock subject to outstanding options
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Anti-dilutive potential common shares (in shares)	1,769,000	3,812,000	2,341,000	3,851,000
Restricted stock units
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Anti-dilutive potential common shares (in shares)	104,000	2,793,000	140,000	2,709,000
Employee stock purchase plan
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Anti-dilutive potential common shares (in shares)	0	32,000	0	33,000
Shares of common stock subject to outstanding options
Effect of potentially dilutive common stock from:
Dilutive potential common shares (in shares)	511,000	0	503,000	0
Restricted stock units
Effect of potentially dilutive common stock from:
Dilutive potential common shares (in shares)	907,000	0	696,000	0
Employee stock purchase plan
Effect of potentially dilutive common stock from:
Dilutive potential common shares (in shares)	33,000	0	34,000	0

Balance Sheet Components - Supplies and Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Supplies	$ 16,184	$ 12,152
Inventory	4,180	3,976
Total supplies and inventory	$ 20,364	$ 16,128

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Effective income tax rate	10.00%	0.50%	14.70%	0.10%
Income tax provision (benefit)	$ 1,693,000	$ (154,000)	$ 3,276,000	$ (29,000)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/exampleRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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+ Details

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2024	Nov. 01, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-36156
Entity Registrant Name	VERACYTE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5455398
Entity Address, Address Line One	6000 Shoreline Court
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	South San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94080
City Area Code	(650)
Local Phone Number	243-6300
Title of 12(b) Security	Common Stock, par value, $0.001 per share
Trading Symbol	VCYT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		77,499,629
Entity Central Index Key	0001384101
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024

Organization, Description of Business and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Use of Estimates

Concentrations of Credit Risk and Other Risks and Uncertainties

Cash and Cash Equivalents

The Company considers demand deposits in a bank, money market funds and highly liquid investments with an original maturity of 90 days or less to be cash equivalents.

Revenue Recognition and Cost of Revenue

Revenue Recognition

Testing Revenue

Product Revenue

Biopharmaceutical and Other Revenue


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Biopharmaceutical revenue	$	2,041	$	2,833	$	5,962	$	10,591
Contract manufacturing and testing	1,095		1,243		3,730		4,181
Total	$	3,136	$	4,076	$	9,692	$	14,772

Cost of Testing Revenue

Cost of Product Revenue

Cost of Biopharmaceutical and Other Revenue

Pension Liability

The Company offers a defined benefit pension plan to certain non-U.S. employees of its Veracyte SAS subsidiary.

Recent Accounting Pronouncements

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-URI https://asc.fasb.org/606/tableOfContent

+ Details

Components of Other Income

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

Components of Other Income

Other income, net consists of the following (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
French research tax credits	$	468	$	552	$	1,391	$	78
Interest income	2,898		2,071		8,293		4,518
Interest expense	(1)		(2)		(2)		(13)
Gain (loss) on currency revaluation	1,487		(786)		756		(640)
Other	(21)		132		(104)		205
	$	4,831	$	1,967	$	10,334	$	4,148

Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2024

Balance Sheet Related Disclosures [Abstract]

Schedule of Goodwill

The changes in the carrying amounts of goodwill were as follows (in thousands of dollars):


	Amounts
Balance as of December 31, 2023	$	702,984
Goodwill acquired - C2i	55,974
Effect of foreign currency translation on Goodwill acquired - HalioDx	3,159
Balance as of September 30, 2024	$	762,117

Schedule of Intangible Assets

Intangible assets consisted of the following (in thousands of dollars):


	September 30, 2024						December 31, 2023						Weighted Average Remaining Amortization Period (Years)
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Percepta product technology	$	16,000	$	(10,133)	$	5,867	$	16,000	$	(9,333)	$	6,667	5
Prosigna product technology	4,120		(1,328)		2,792		4,120		(1,122)		2,998		10
Prosigna customer relationships	2,430		(2,349)		81		2,430		(1,985)		445		0
LymphMark product technology	990		(684)		306		990		(577)		413		2
Decipher product technology	90,000		(31,984)		58,016		90,000		(25,234)		64,766		6
Decipher trade names	4,000		(2,843)		1,157		4,000		(2,243)		1,757		1
HalioDx developed technology	1,457		(461)		996		1,435		(346)		1,089		7
HalioDx customer relationships	2,797		(1,770)		1,027		2,760		(1,331)		1,429		2
HalioDx customer backlog	4,316		(3,364)		952		4,258		(2,529)		1,729		1
C2i developed technology	25,300		(1,121)		24,179		—		—		—		14
Total finite-lived intangibles	151,410		(56,037)		95,373		125,993		(44,700)		81,293		8.4
In-process research and development	13,500		—		13,500		7,300		—		7,300
Total intangible assets	$	164,910	$	(56,037)	$	108,873	$	133,293	$	(44,700)	$	88,593

Schedule of Future Aggregate Amortization Expense

The estimated future aggregate amortization expense as of September 30, 2024 is as follows (in thousands of dollars):


Year Ending December 31,	Amounts
2024 remainder of year	$	3,766
2025	14,298
2026	12,790
2027	12,174
2028	12,174
Thereafter	40,171
Total	$	95,373

Schedule of Supplies and Inventory

As of September 30, 2024 and December 31, 2023, supplies and inventory consisted of the following (in thousands of dollars):


	September 30, 2024		December 31, 2023
Supplies	$	16,184	$	12,152
Inventory	4,180		3,976
Total supplies and inventory	$	20,364	$	16,128

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following (in thousands of dollars):


	September 30, 2024		December 31, 2023
Accrued compensation expenses	$	30,740	$	26,430
Accrued other	13,132		11,997
Total accrued liabilities	$	43,872	$	38,427

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

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-URI https://asc.fasb.org/1943274/2147482573/350-20-50-2

+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities
Net income (loss)	$ 19,025	$ (46,111)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	17,206	20,852
Loss on disposal of property, plant and equipment	131	136
Stock-based compensation	26,620	25,629
Deferred income taxes	10	(843)
Noncash lease expense	3,628	3,130
Revaluation of acquisition-related contingent consideration	1,242	(5,500)
Effect of foreign currency on operations	(785)	657
Impairment loss	614	36,310
Changes in operating assets and liabilities:
Accounts receivable	(8,396)	4,650
Supplies and inventory	(4,175)	(1,636)
Prepaid expenses and other current assets	149	(1,578)
Other assets	(1,710)	(586)
Operating lease liabilities	(3,929)	(3,225)
Accounts payable	(2,950)	185
Accrued liabilities and deferred revenue	3,892	(3,400)
Net cash provided by operating activities	50,572	28,670
Investing activities
Acquisition of C2i, net of cash acquired	5,012	0
Purchase of short-term investments	0	(19,700)
Proceeds from sale of short-term investments	0	39,773
Proceeds from maturity of short-term investments	0	5,000
Purchases of property, plant and equipment	(7,146)	(7,464)
Net cash (used in) provided by investing activities	(2,134)	17,609
Financing activities
Payment of taxes on vested restricted stock units	(7,315)	(5,614)
Proceeds from the exercise of common stock options and employee stock purchases	16,729	7,806
Net cash provided by financing activities	9,414	2,192
Increase in cash, cash equivalents and restricted cash	57,852	48,471
Effect of foreign currency on cash, cash equivalents and restricted cash	(23)	(134)
Net increase in cash, cash equivalents and restricted cash	57,829	48,337
Cash, cash equivalents and restricted cash at beginning of period	217,330	154,996
Cash, cash equivalents and restricted cash at end of period	275,159	203,333
Supplementary cash flow information:
Purchases of property, plant and equipment included in accounts payable and accrued liability	552	424
Cash paid for tax	$ 1,205	$ 1,269

Components of Other Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Other Income and Expenses [Abstract]
French research tax credits	$ 468	$ 552	$ 1,391	$ 78
Interest income	2,898	2,071	8,293	4,518
Interest expense	(1)	(2)	(2)	(13)
Gain (loss) on currency revaluation	1,487	(786)	756	(640)
Other	(21)	132	(104)	205
Other income, net	$ 4,831	$ 1,967	$ 10,334	$ 4,148

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Weighted average remaining lease term	6 years 7 months 6 days
Deposits	$ 1,100	$ 900
Discount rate	9.90%
Finance right-of-use assets	$ 100	$ 100
Finance lease, right-of-use asset, statement of financial position [Extensible List]	Property, plant and equipment, net	Property, plant and equipment, net
Finance lease liabilities	$ 100	$ 100
Finance lease, liability, statement of financial position [Extensible List]	Other liabilities	Other liabilities
Right-of-use assets, operating leases	$ 17,031	$ 10,277
Facilities in Marseille, France
Lessee, Lease, Description [Line Items]
Right-of-use assets, operating leases	$ 8,000
Term of lease	12 years
Annual rent	$ 1,300

Balance Sheet Components - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
2024 remainder of year	$ 3,766
2025	14,298
2026	12,790
2027	12,174
2028	12,174
Thereafter	40,171
Total	$ 95,373	$ 81,293

Balance Sheet Components - Schedule of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2023	$ 702,984
Goodwill acquired - C2i	55,974
Effect of foreign currency translation on Goodwill acquired - HalioDx	3,159
Balance as of September 30, 2024	$ 762,117

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 49
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-49

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
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Reference 3: http://www.xbrl.org/2003/role/exampleRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

+ Details

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 274,079	$ 216,454
Accounts receivable	48,807	40,378
Supplies and inventory	20,364	16,128
Prepaid expenses and other current assets	13,604	12,661
Total current assets	356,854	285,621
Property, plant and equipment, net	21,194	20,584
Right-of-use assets, operating leases	17,031	10,277
Intangible assets, net	108,873	88,593
Goodwill	762,117	702,984
Restricted cash	1,080	876
Other assets	7,872	5,971
Total assets	1,275,021	1,114,906
Current liabilities:
Accounts payable	9,670	12,943
Accrued liabilities	43,872	38,427
Current portion of deferred revenue	2,033	2,008
Current portion of acquisition-related contingent consideration	7,391	2,657
Current portion of operating lease liabilities	7,294	5,105
Current portion of other liabilities	53	101
Total current liabilities	70,313	61,241
Deferred tax liabilities	1,470	734
Acquisition-related contingent consideration, net of current portion	14,225	518
Operating lease liabilities, net of current portion	12,400	7,525
Other liabilities	571	786
Total liabilities	98,979	70,804
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023	0	0
Common stock, $0.001 par value; 125,000,000 shares authorized, 77,491,212 and 73,264,738 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	77	73
Additional paid-in capital	1,646,343	1,536,168
Accumulated deficit	(449,096)	(468,121)
Accumulated other comprehensive loss	(21,282)	(24,018)
Total stockholders’ equity	1,176,042	1,044,102
Total liabilities and stockholders’ equity	$ 1,275,021	$ 1,114,906

Fair Value Measurements - Narrative (Details) - USD ($)		3 Months Ended		9 Months Ended
Fair Value Measurements - Narrative (Details) - USD ($)	Dec. 03, 2019	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Feb. 05, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposits for leases		$ 1,100,000		$ 1,100,000			$ 900,000
Acquisition-related contingent consideration, net of current portion		14,225,000		14,225,000			518,000
Current portion of acquisition-related contingent consideration		7,391,000		7,391,000			2,657,000
NanoString
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Additional cash to be paid	$ 10,000,000.0
Acquisition-related contingent consideration, net of current portion	$ 6,100,000	3,200,000		3,200,000			3,200,000
Contingent consideration, changes in fair value		0	$ (5,200,000)	100,000	$ (5,500,000)
Current portion of acquisition-related contingent consideration		2,700,000		2,700,000
C2i Inc
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Acquisition-related contingent consideration, net of current portion		18,400,000		18,400,000		$ 17,200,000
Contingent consideration, changes in fair value		400,000		1,200,000
Current portion of acquisition-related contingent consideration		4,700,000		4,700,000
Maximum contingent consideration to be paid						$ 25,000,000
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents		$ 3,900,000		$ 3,900,000			$ 1,400,000

Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Accrued compensation expenses	$ 30,740	$ 26,430
Accrued other	13,132	11,997
Total accrued liabilities	$ 43,872	$ 38,427

Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Remainder of 2024	$ 1,988
2025	7,832
2026	3,284
2027	2,029
2028	1,995
Thereafter	10,399
Total future minimum lease payments	27,527
Less: amount representing interest	7,833
Present value of future lease payments	19,694
Less: short-term lease liabilities	7,294	$ 5,105
Long-term lease liabilities	$ 12,400	$ 7,525

Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company records certain of its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value and clarifies the definition of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

•Level I: Inputs which include quoted prices in active markets for identical assets and liabilities;

•Level II: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of certain financial instruments of the Company, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The fair value of the Company’s financial assets includes money market funds and deposits for leases of the Company's facilities. Money market funds, included in cash and cash equivalents in the accompanying condensed consolidated balance sheets, were $3.9 million and $1.4 million as of September 30, 2024 and December 31, 2023, respectively, and are Level I assets as described above. The deposits for the leases, included in restricted cash, were $1.1 million and $0.9 million as of September 30, 2024 and December 31, 2023, respectively, and are Level I assets as described above. There were no transfers between Levels 1, 2 or 3 for the three and nine months ended September 30, 2024 and 2023.

As part of the Company’s agreement to acquire the exclusive global diagnostic license to the nCounter Analysis System, the Company may pay up to an additional $10.0 million in cash, contingent upon first achievement or occurrence, by or on behalf of the Company, of the commercial launch of the first, second and third diagnostic tests for use on the nCounter multiplex analysis system. This contingency was valued at $6.1 million as of the acquisition date and is remeasured to fair value at each reporting date until the contingent consideration is settled, with the corresponding changes included in general and administrative expense in the Company's condensed consolidated statements of operations. As of September 30, 2024 and December 31, 2023, this contingency was remeasured to $3.2 million and $3.2 million, respectively. For the three and nine months ended September 30, 2024, expense of zero and $0.1 million, respectively, was recorded. For the three and nine months ended September 30, 2023, reversals of expense of $5.2 million and $5.5 million, respectively, were recorded. As of September 30, 2024, the achievement of one of the milestones is forecasted to occur within the next 12 months. As a result, $2.7 million of the contingent consideration is included in short term liabilities at September 30, 2024. In addition, the contingent consideration related to the C2i Acquisition as discussed in Note 4, is dependent on the achievement of certain milestones and is payable in cash or shares of the Company’s common stock, at the Company’s election, of up to $25 million and was valued at $17.2 million. The fair value of the contingent consideration related to the C2i Acquisition will be remeasured to fair value at each reporting date until the contingent consideration is settled, with the corresponding changes included in general and administrative expense. As of September 30, 2024, this contingency was remeasured to $18.4 million. For the three and nine months ended September 30, 2024, expense of $0.4 million and $1.2 million, respectively, was recorded. As of September 30, 2024, the achievement of one of the milestones is forecasted to occur within the next 12 months. As a result, $4.7 million of the contingent consideration is included in short term liabilities at September 30, 2024. The fair value of contingent consideration includes inputs that are not observable in the market and thus represents a Level III financial liability. The estimation of the fair value of the contingent consideration is based on the present value of the expected payments calculated by assessing the likelihood of when the related milestones would be achieved and estimating the Company's borrowing rate. These estimates form the basis for making judgments about the carrying value of the contingent consideration that are not readily apparent from other sources. Changes to the forecasts for the achievement of the milestones and the borrowing rate can significantly affect the estimated fair value of the contingent consideration. As of September 30, 2024 and December 31, 2023, the Company calculated the estimated fair value of the milestones using the following significant unobservable inputs:


	Value or Range (Weighted-Average)
Unobservable input	September 30, 2024	December 31, 2023
Discount rate	4.6% - 5.8% (4.8%)	6.8%
Probability of achievement	0% - 95% (88%)	10% - 80% (69%)

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments

Future minimum lease payments under non-cancelable operating leases as of September 30, 2024 are as follows (in thousands of dollars):


Year Ending December 31,	Amounts
Remainder of 2024	$	1,988
2025	7,832
2026	3,284
2027	2,029
2028	1,995
Thereafter	10,399
Total future minimum lease payments	27,527
Less: amount representing interest	7,833
Present value of future lease payments	19,694
Less: short-term lease liabilities	7,294
Long-term lease liabilities	$	12,400

Schedule of Operating Lease Expense and Measurement Of Lease Liabilities

The following table summarizes operating lease expense and cash paid for amounts included in the measurement of lease liabilities (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease expense	$	1,824	$	1,429	$	4,914	$	3,830
Cash paid for amounts included in the measurement of lease liabilities	$	1,967	$	1,367	$	5,274	$	3,906

Business Combination- Narrative (Details) - USD ($) shares in Millions		3 Months Ended	9 Months Ended
	Feb. 05, 2024	Sep. 30, 2024	Sep. 30, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Acquisition-related contingent consideration, net of current portion		$ 14,225,000	$ 14,225,000	$ 518,000
Goodwill		762,117,000	762,117,000	$ 702,984,000
C2i
Business Acquisition [Line Items]
Equity interest acquired	100.00%
Acquisition consideration	$ 100,200,000
Value of shares in acquisition consideration	73,300,000
Acquisition-related contingent consideration, net of current portion	17,200,000
Transaction costs	5,100,000
Escrow deposits	8,000,000
Maximum contingent consideration to be paid	25,000,000
Acquisition revenue included in financial results		0	0
Acquisition operating loss included in financial results		$ 1,400,000	7,500,000
Severance and retention charges			1,300,000
Impairment of right-of-use asset and intangible asset amortization			$ 900,000
Goodwill	55,974,000
Deferred tax liability	726,000
C2i \| Escrow Deposits, Release One
Business Acquisition [Line Items]
Escrow deposits to be released	$ 5,000,000
Escrow deposits to be release period	18 months
C2i \| Escrow Deposits, Release Two
Business Acquisition [Line Items]
Escrow deposits to be released	$ 3,000,000
Escrow deposits to be release period	36 months
C2i \| Options
Business Acquisition [Line Items]
Value of shares in acquisition consideration	$ 800,000
C2i \| Common Stock
Business Acquisition [Line Items]
Shares in acquisition consideration (in shares)	2.7

Business Combination - Schedule of Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Feb. 05, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill	$ 762,117		$ 702,984
C2i
Business Acquisition [Line Items]
Cash and cash equivalents		$ 13,677
Prepaid expenses and other current assets		998
Property, plant and equipment, net		277
Right of use assets, operating leases		1,277
Intangible assets, net		31,500
Restricted cash		188
Total identifiable assets acquired		47,917
Accounts payable		(59)
Accrued Liabilities		(1,540)
Current portion of deferred revenue		(94)
Current portion of operating lease liabilities		(441)
Deferred tax liability		(726)
Operating lease liabilities, net of current portion		(836)
Net identifiable assets acquired		44,221
Goodwill		55,974
Total purchase price		$ 100,195

Condensed Consolidated Statements of Cash Flows (Unaudited) (Cash Reconciliation) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 274,079	$ 216,454
Restricted cash	1,080	876
Total cash, cash equivalents and restricted cash	$ 275,159	$ 217,330

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurement Inputs and Valuation Techniques

As of September 30, 2024 and December 31, 2023, the Company calculated the estimated fair value of the milestones using the following significant unobservable inputs:


	Value or Range (Weighted-Average)
Unobservable input	September 30, 2024	December 31, 2023
Discount rate	4.6% - 5.8% (4.8%)	6.8%
Probability of achievement	0% - 95% (88%)	10% - 80% (69%)

Insider Trading Arrangements	3 Months Ended	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2024 shares	Sep. 30, 2024 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Robert Epstein [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Robert Epstein, director, adopted a new trading plan on August 9, 2024 (with the first trade under the new plan scheduled for approximately November 11, 2024). The trading plan will be effective until January 11, 2025 to sell an aggregate of 15,000 shares of our common stock.
Name	Robert Epstein
Title	director
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 9, 2024
Expiration Date	January 11, 2025
Arrangement Duration	155 days
Aggregate Available	15,000	15,000
Rebecca Chambers [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Rebecca Chambers, Chief Financial Officer, adopted a new trading plan on August 13, 2024 (with the first trade under the new plan scheduled for November 12, 2024). The trading plan will be effective until November 21, 2025 to sell an aggregate of 29,802 shares of our common stock.
Name	Rebecca Chambers
Title	Chief Financial Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 13, 2024
Expiration Date	November 21, 2025
Arrangement Duration	465 days
Aggregate Available	29,802	29,802
Karin Eastham [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Karin Eastham, director, adopted a new trading plan on August 20, 2024 (with the first trade under the new plan scheduled for November 19, 2024). The trading plan will be effective until November 14, 2025 to sell an aggregate of 38,955 shares of our common stock.
Name	Karin Eastham
Title	director
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 20, 2024
Expiration Date	November 14, 2025
Arrangement Duration	451 days
Aggregate Available	38,955	38,955
Annie McGuire [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Annie McGuire, General Counsel and Chief People Officer, adopted a new trading plan on September 4, 2024 (with the first trade under the new plan scheduled for December 4, 2024). The trading plan will be effective until December 15, 2025 to sell an aggregate of (i) 14,970 shares of our common stock, plus (ii) 100% of the net shares resulting from the vesting of 31,175 additional common stock during the plan period (net shares are net of tax withholding).
Name	Annie McGuire
Title	General Counsel and Chief People Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 4, 2024
Expiration Date	December 15, 2025
Arrangement Duration	467 days
Phillip Febbo [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Phillip Febbo, Chief Scientific Officer and Chief Medical Officer, adopted a new trading plan on September 4, 2024 (with the first trade under the new plan scheduled for December 4, 2024). The trading plan will be effective until November 21, 2025 to sell an aggregate of (i) 100% of the net shares resulting from the vesting of 38,230 common stock during the plan period, plus (ii) 10% of the net shares resulting from the vesting of 25,528 additional common stock during the plan period (net shares are net of tax withholding).
Name	Phillip Febbo
Title	Chief Scientific Officer and Chief Medical Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 4, 2024
Expiration Date	November 21, 2025
Arrangement Duration	443 days
Marc Stapley [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		Marc Stapley, Chief Executive Officer, adopted a new trading plan on September 13, 2024 (with the first trade under the new plan scheduled for December 13, 2024). The trading plan will be effective until December 11, 2025 to sell 100% of the net shares resulting from the vesting of 151,087 common stock during the plan period (net shares are net of tax withholding).
Name	Marc Stapley
Title	Chief Executive Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 13, 2024
Expiration Date	December 11, 2025
Arrangement Duration	454 days
Aggregate Available	151,087	151,087
Annie McGuire Trading Arrangement, Common Stock [Member] \| Annie McGuire [Member]
Trading Arrangements, by Individual
Aggregate Available	14,970	14,970
Annie McGuire Trading Arrangement, Vested Common Stock [Member] \| Annie McGuire [Member]
Trading Arrangements, by Individual
Aggregate Available	31,175	31,175
Philip Febbo Trading Arrangement, Common Stock [Member] \| Phillip Febbo [Member]
Trading Arrangements, by Individual
Aggregate Available	38,230	38,230
Philip Febbo Trading Arrangement, Vested Common Stock [Member] \| Phillip Febbo [Member]
Trading Arrangements, by Individual
Aggregate Available	25,528	25,528

Organization, Description of Business and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Class of Stock [Line Items]
Number of operating segments \| segment			1
Intangible asset amortization - operating expenses	$ 3,800	$ 5,300	$ 11,200	$ 16,000
Deposits	1,100		1,100		$ 900
Total revenue	115,860	90,108	327,132	262,852
Accounts receivable	48,807		48,807		40,378
Pension obligation	600		600		800
Other Testing Revenue
Class of Stock [Line Items]
Total revenue	3,100	900	10,000	5,500
Biopharmaceutical and other revenue
Class of Stock [Line Items]
Total revenue	3,136	4,076	9,692	14,772
Accounts receivable	3,000		3,000		6,000
Deferred revenue	$ 2,000		$ 2,000		$ 2,000
Amortization Of Intangible Assets
Class of Stock [Line Items]
Intangible asset amortization - operating expenses		$ 4,800		$ 14,400

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 15,155	$ (29,618)	$ 19,025	$ (46,111)
Other comprehensive income (loss):
Change in currency translation adjustments	9,328	(6,414)	2,736	(2,851)
Net comprehensive income (loss)	$ 24,483	$ (36,032)	$ 21,761	$ (48,962)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Net Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

Basic earnings (loss) per share, or EPS, is computed based on the weighted average number of common shares outstanding during the period. Diluted EPS is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In loss periods, basic and diluted loss per share are identical since the effect of potentially dilutive common shares is antidilutive and therefore excluded. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercises of equity awards and the average amount of unrecognized compensation expense

for equity awards are assumed to be used to repurchase shares. The following table sets forth the computation of basic and diluted EPS (in thousands, except per-share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator for basic and diluted EPS — net income (loss) (A)	$	15,155	$	(29,618)	$	19,025	$	(46,111)
Denominator for basic EPS — weighted average shares (B)	77,014		72,805		76,107		72,489
Effect of potentially dilutive common stock from:
Shares of common stock subject to outstanding options	511		—		503		—
Restricted stock units	907		—		696		—
Employee stock purchase plan	33		—		34		—
Dilutive potential common shares	1,451		—		1,233		—
Denominator for diluted EPS — adjusted weighted average shares and assumed conversions (C)	78,465		72,805		77,340		72,489
Basic EPS (A / B)	$	0.20	$	(0.41)	$	0.25	$	(0.64)
Diluted EPS (A / C)	$	0.19	$	(0.41)	$	0.25	$	(0.64)
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Shares of common stock subject to outstanding options	1,769		3,812		2,341		3,851
Restricted stock units	104		2,793		140		2,709
Employee stock purchase plan	—		32		—		33
Anti-dilutive potential common shares	1,873		6,637		2,481		6,593

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The provision for income taxes is based on the current estimate of the annual effective tax rate applied to the Company’s year to date income or loss and is adjusted for discrete items recorded in the period. For the three months ended September 30, 2024 and 2023, the Company’s effective tax rate was 10.0% and 0.5%, respectively. For the nine months ended September 30, 2024 and 2023, the Company’s effective tax rate was 14.7% and 0.1% respectively. For the nine months ended September 30, 2024, the primary difference between the effective tax rate and the federal statutory rate is driven by unfavorable permanent differences and foreign and state taxes offset by the full valuation allowance the Company has established on its federal, state and foreign net operating losses and credits. For the nine months ended September 30, 2023, the primary difference between the effective tax rate and the federal statutory rate is driven by the full valuation allowance the Company had established on its federal, state and foreign net operating losses and credits. The Company recorded income tax expense of $1.7 million and $3.3 million for the three and nine months ended September 30, 2024, respectively, and recorded income tax benefit of $0.2 million and $29.0 thousand for the three and nine months ended September 30, 2023, respectively. The provision for income taxes recorded in the three and nine months ended September 30, 2024 consists primarily of federal, state and foreign income taxes. The income tax benefit recorded in the three and nine months ended September 30, 2023 consists primarily of state and foreign income taxes.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
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-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
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-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
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-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Balance Sheet Components

9 Months Ended

Sep. 30, 2024

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Goodwill

The changes in the carrying amounts of goodwill were as follows (in thousands of dollars):


	Amounts
Balance as of December 31, 2023	$	702,984
Goodwill acquired - C2i	55,974
Effect of foreign currency translation on Goodwill acquired - HalioDx	3,159
Balance as of September 30, 2024	$	762,117

Intangible Assets, Net

Intangible assets include finite-lived product technology, customer relationships, licenses and trade names and indefinite-lived in-process research and development. Intangible assets consisted of the following (in thousands of dollars):


	September 30, 2024						December 31, 2023						Weighted Average Remaining Amortization Period (Years)
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Percepta product technology	$	16,000	$	(10,133)	$	5,867	$	16,000	$	(9,333)	$	6,667	5
Prosigna product technology	4,120		(1,328)		2,792		4,120		(1,122)		2,998		10
Prosigna customer relationships	2,430		(2,349)		81		2,430		(1,985)		445		0
LymphMark product technology	990		(684)		306		990		(577)		413		2
Decipher product technology	90,000		(31,984)		58,016		90,000		(25,234)		64,766		6
Decipher trade names	4,000		(2,843)		1,157		4,000		(2,243)		1,757		1
HalioDx developed technology	1,457		(461)		996		1,435		(346)		1,089		7
HalioDx customer relationships	2,797		(1,770)		1,027		2,760		(1,331)		1,429		2
HalioDx customer backlog	4,316		(3,364)		952		4,258		(2,529)		1,729		1
C2i developed technology	25,300		(1,121)		24,179		—		—		—		14
Total finite-lived intangibles	151,410		(56,037)		95,373		125,993		(44,700)		81,293		8.4
In-process research and development	13,500		—		13,500		7,300		—		7,300
Total intangible assets	$	164,910	$	(56,037)	$	108,873	$	133,293	$	(44,700)	$	88,593

Acquisition-related intangibles are generally finite-lived and are carried at cost less accumulated amortization. Amortization of the finite-lived intangible assets is recognized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

Amortization expense of $3.8 million and $5.3 million was recognized for the three months ended September 30, 2024 and 2023, respectively, and expense of $11.2 million and $16.0 million was recognized for the nine months ended September 30, 2024 and 2023, respectively.

The estimated future aggregate amortization expense as of September 30, 2024 is as follows (in thousands of dollars):


Year Ending December 31,	Amounts
2024 remainder of year	$	3,766
2025	14,298
2026	12,790
2027	12,174
2028	12,174
Thereafter	40,171
Total	$	95,373

Impairment of Long-Lived Assets

Impairment of long-lived assets for the three and nine months ended September 30, 2024 was $0.2 million and $0.6 million, respectively, of impairment of right-of-use and fixed assets in relation to exiting our Watertown facility.

During the three months ended September 30, 2023, the Company concluded it had a triggering event requiring assessment of impairment for certain of its long-lived assets in conjunction with management’s decision to adopt a multi-platform IVD strategy. As a result, the Company reviewed the long-lived assets for impairment and recorded a $34.9 million impairment charge for the three months ended September 30, 2023 associated with its nCounter Dx license finite-lived

intangible asset. Impairment of long-lived assets for the nine months ended September 30, 2023 was $36.3 million including impairment of right-of-use and fixed assets in relation to exiting our Richmond facility.

Supplies and Inventory

Supplies consisted of lab supplies and reagents to be used in the performance of testing services. Inventory related to finished and semi-finished goods used in the assembly of IVD kits related to product sales as well as raw materials consumed in the contract manufacturing process. As of September 30, 2024 and December 31, 2023, supplies and inventory consisted of the following (in thousands of dollars):


	September 30, 2024		December 31, 2023
Supplies	$	16,184	$	12,152
Inventory	4,180		3,976
Total supplies and inventory	$	20,364	$	16,128

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands of dollars):


	September 30, 2024		December 31, 2023
Accrued compensation expenses	$	30,740	$	26,430
Accrued other	13,132		11,997
Total accrued liabilities	$	43,872	$	38,427