Veracyte, Inc. (VCYT) Earnings Call Transcript

Good day, and thank you for standing by. Welcome to the Veracyte Second Quarter 2026 Financial Results Webcast, [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kelly Gura, Director of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us today to review Veracyte's Second Quarter 2026 Financial Results. Joining me on the call are Marc Stapley, our Chief Executive Officer; and Rebecca Chambers, our Chief Financial Officer. Dr. John Leite, our Chief Commercial Officer, will also be available for Q&A. Earlier this afternoon, we issued a press release detailing our second quarter financial results, and we posted an accompanying presentation in the Investors section of our website. Before we begin, I'd like to remind you that statements we make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements are subject to risks and uncertainties, and the company can give no assurance that they will prove to be correct. The company undertakes no obligation to update any forward-looking statements, except as required by law. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Veracyte files with the Securities and Exchange Commission, including the most recent Forms 10-Q and 10-K. In addition, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included in today's earnings release accessible from the Investors section of Veracyte's website. I will now turn the call over to Marc Stapley, Veracyte's CEO.

Thank you, Kelly, and thank you all for joining us today. Q2 was a milestone quarter for Veracyte as we launched Prosigna LDT and TrueMRD, analyzing 2 of our key growth opportunities and meaningfully expanding our portfolio. We advanced the clinical evidence supporting Prosigna, Decipher and Afirma while delivering another quarter of double-digit growth and industry-leading profitability. These achievements reflect years of investment in our platform, the growing body of evidence supporting our tests and our differentiated commercial capabilities. More importantly, they enhance our ability to reach and positively impact more patients. Today, our portfolio helps guide patient care across multiple cancer types and increasingly across the cancer care continuum from risk assessment through recurrence monitoring. As we continue to expand that impact, we are approaching one of the most meaningful milestones in our company's history, serving our 1 millionth patient. The recent launches of Prosigna LDT and TrueMRD for muscle invasive bladder cancer, or MIBC, represent the culmination of years of hard work. To say I'm proud of these accomplishments and of our team for delivering them would be an understatement. I want to thank our employees and external collaborators whose expertise and partnership made these outcomes possible. I'm also grateful to the physicians who have worked with us to advance cancer care and to the many thousands of patients whose participation in research helped make these innovations possible. Since launching the Prosigna test in the U.S. following the presentation of the practice-changing OPTIMA trial results at ASCO, we've seen tremendous enthusiasm from both physicians and patients. Prosigna helps guide treatment decisions at a pivotal point in the breast cancer care journey by quantifying the risk of recurrence up to 10 years and providing a likelihood of chemotherapy benefit. Backed by the most rigorous clinical trial demonstration to date, Prosigna achieves this by providing intrinsic subtype and classification information from the well-validated, well-published PAM50 signature that highlights the underlying biology driving the patient's cancer. This helps identify patients who can benefit from chemotherapy and those who may be able to safely avoid it. Prosigna is foundational to our breast cancer franchise and represents one of the most significant product launches in Veracyte's history. As a reminder, OPTIMA is an independent prospective Phase III randomized trial that enrolled more than 4,400 high-risk early-stage breast cancer patients. The study met its primary endpoint and demonstrated that more than 2/3 of clinically high-risk patients may safely avoid chemotherapy without compromising outcomes. Importantly, this includes premenopausal women and patients with up to 9 positive lymph nodes. The OPTIMA results also generated significant media retention, making OPTIMA and Prosigna the most covered diagnostic story at ASCO. Looking ahead, publication in a leading peer-reviewed journal will represent another important milestone, further validating this Level 1A prospective evidence supporting Prosigna and its potential inclusion in future clinical guidelines. We see a significant opportunity to expand access to Prosigna in the U.S., where approximately 225,000 patients are diagnosed with ER-positive HER2-negative breast cancer each year. We believe many of these patients may benefit from the clinically validated insights Prosigna provides to help inform treatment decisions. With OPTIMA, Prosigna has the only clinically validated evidence for premenopausal women in patients with higher nodal involvement. This expands and strengthens the clinical utility already demonstrated in many prior studies, including as a prognostic test for node-negative patients. There are 157 publications to date featuring Prosigna and more than 1,200 publications featuring the PAM50 classifier on which the test was built. In the near term, we are focused on educating key opinion leaders and driving adoption in high-volume centers. While menopausal status and nodal involvement may present a catalyst for the initial conversation, we believe health care providers will choose a test they can use with confidence across all ER-positive HER2-negative patients rather than stratifying their use based on these differentiating factors alone. We have been thrilled by the quality and breadth of engagement since launch, which gives us confidence our commercial strategy is on point. We are now actively engaged with more than 100 institutions that help shape standards of care in breast cancer, including nationally recognized academic cancer centers, large integrated health systems and regional oncology networks. Many of these organizations are evaluating broad adoption of Prosigna across their breast cancer programs and in some cases, have expressed interest in using Prosigna for all hormone receptor positive patients that they treat. Based on this strong engagement, the growing activity on our ordering platform and our customers' desire to start incorporating Prosigna into existing practice management workflows, we are expanding our sales force ahead of our original plan to capture the demand we are seeing. We are making progress on reimbursement and continue to have constructive discussions with MolDX regarding Medicare coverage. We are encouraged by the engagement to date and look forward to providing updates as those discussions progress. I couldn't be more excited about the momentum we have seen since launch. While early, the response from patients, clinicians, key opinion leaders and the broader oncology community reinforces our conviction that Prosigna can become a meaningful growth driver for Veracyte and even more importantly, improve quality of life for the hundreds of thousands of patients dealing with breast cancer. Turning now to MRD. We launched our first test on our TrueMRD platform in June after securing Medicare reimbursement for recurrence monitoring in patients with MIBC following radical cystectomy. The 2 MRD monitoring test for MIBC represents the first commercial application of our MRD platform and our entry into this rapidly growing market. Importantly, our whole genome approach to MRD is extensible well beyond bladder cancer with the potential to support multiple tumor types and clinical applications over time. TrueMRD for MIBC is the first and only commercially available MRD test to utilize whole genome sequencing for not just the landmark test, but also through longitudinal monitoring with all subsequent liquid biopsy surveillance tests. We believe this is a meaningful differentiator, offering a broader view of tumor biology and the ability to track tumor evolution over time, capabilities we expect will become increasingly important as oncology research and testing advances. More broadly, we believe Veracyte is uniquely positioned to serve patients across the bladder cancer continuum. Today, Decipher Bladder helps physicians risk stratify patients. And with TrueMRD for MIBC, we are adding recurrence monitoring at another critical point in the patient journey. Over time, we expect continued evidence generation, product enhancements and portfolio expansion to further strengthen our position in bladder cancer management. We are leveraging the strong brand we have built through Decipher and our long-standing relationships across urology and radiation oncology to accelerate awareness and adoption of our first TrueMRD test. In parallel, we are investing in the operational infrastructure, workflow enhancements and automation needed to support larger testing volumes as we intentionally expand the platform over time. While we remain in the early stages of commercialization of TrueMRD for MIBC, we have been encouraged by the initial feedback from physicians who recognize the advantages of a truly whole genome approach and the complementarity to our overall bladder program. We continue to believe that the TrueMRD platform has the potential to become an important long-term growth driver for Veracyte. Moving on to Decipher Prostate. We delivered another strong quarter of revenue growth, up 20% year-over-year, driven primarily by 17% volume growth with improved ASP contributing the balance. ASP growth reflects the significant focused work our market access and billing teams completed over the last year, including operational improvements, strong payer engagement and expanded coverage across multiple accounts, which led to higher recoveries per test. With just under 30,000 tests resulted in the second quarter, we continue to see strong underlying demand for Decipher. Having said that, we are taking our expectations for volume for the year down by approximately 1% or slightly more than 1,000 tests, primarily in the low-risk setting. Importantly, our expectations for the rest of the business remain on track. Low-risk disease represents an important growth opportunity for Decipher and one where we are also actively investing to generate additional high-quality evidence. The 2025 NCCN guideline update reinforced the need for additional high-quality evidence supporting the use of genomic testing in low-risk patients considering active surveillance. We have a growing clinical data pipeline that we believe will address this unmet need with several prospective and retrospective studies underway evaluating Decipher in active surveillance and low-risk patient populations with initial readouts as early as 2027. As these data emerge, we believe they have the potential to further expand the clinical foundation for Decipher, supporting broader low-risk adoption and guideline inclusion over time. Turning to the balance of the Decipher business, which grew approximately 20% in Q2 '26 off of a challenging prior year comp. Recall that Q2 2025 benefited from the initial step-up in testing following the 2024 NCCN guideline updates made late in the year, which reflected Decipher's position as the only gene expression test supported by high-quality evidence. That step-up has proved durable and the underlying order trends this quarter give us confidence that the Decipher business is on a consistent trajectory of growth. For example, in Q2, we delivered our highest sequential volume growth since that exceptional quarter last year. This growth was driven by both a strong increase in new ordering positions and deeper penetration within our existing base. Orders per physician reached a new record, reflecting broader Decipher use by our core physician base across more of their patients. Together, these trends show that physicians are increasingly relying on Decipher to provide critical information that helps guide treatment decisions for patients with prostate cancer across risk groups. We were particularly encouraged by strong ordering trends in intermediate and high-risk localized disease as well as post-prostatectomy and biochemical recurrence. These remain some of the largest and most attractive growth opportunities for Decipher, reflecting areas where the clinical evidence base is strongest, guideline support is uniquely established and physician adoption continues to deepen. More broadly, evidence generation remains robust across these settings as well as the metastatic setting, a critical component to ensuring continued adoption and long-term growth. During the quarter, Decipher Prostate was featured in more than 35 publications and abstracts, including Level 1b evidence from the EZAMET trial presented at ASCO. This study provided new predictive evidence supporting Decipher Prostate to help inform use of triplet therapy in metastatic prostate cancer, identifying patients most likely to benefit from the addition of chemotherapy to standard doublet hormone therapy. Looking ahead, we are excited about the steady drumbeat of upcoming conference presentations in the second half of the year. At ASCO in September, Deciphera is expected to be featured in 6 oral presentations, including 3 focused on treatment intensification with androgen deprivation therapy, or ADT, a key area of clinical decision-making in intermediate risk and post-RP biochemical recurrent prostate cancer. We are particularly excited about upcoming analyses from NRG-RTOG 0815, which we believe have the potential to further establish Decipher's role in personalizing treatment with radiation and ADT for intermediate risk prostate cancer patients, our largest indication. We're also looking forward to results from the SPORT trial, evaluating whether PAM50based subtyping can provide additional clinically useful information in prostate cancer. Together with additional data expected at ESMO later this year supporting Decipher's utility in high-risk disease, these presentations represent additional data, expanding the clinical utility of our tests across the prostate cancer continuum. Beyond prostate cancer, we saw encouraging Q2 order trends for Decipher Bladder, which helps physicians risk stratify patients with muscle invasive as well as non-muscle invasive disease and guide treatment decisions. The test was featured in 13 publications and abstracts in Q2, including 6 abstracts at AUA and more expected later this year at ESMO, highlighting our growing body of evidence across the bladder cancer continuum. Looking ahead, we remain highly confident in Decipher's long-term growth opportunity, supported by expansion of our customer base, durable and broader physician adoption and expanding body of clinical and real-world evidence, including multiple important study readouts expected over the next few years and continued innovation across our platform. Turning now to Afirma. We delivered another strong quarter with approximately 18,600 tests, representing 10% year-over-year volume growth and 18% revenue growth. We were pleased to see another quarter of increased utilization among existing physicians, continued expansion of our ordering physician base and ongoing market share gains, reinforcing Afirma's position as the market leader in thyroid nodule molecular diagnostics. Revenue growth benefited from both sustained ASP gains and favorable reimbursement wins from commercial payers. We also continue to realize the benefits of our B2 transcriptome workflow, which has improved our no result rate significantly, resulting in more patients receiving a test result and contributing to approximately 400 basis points of volume growth in the quarter. Evidence generation remains a key component of the Afirma growth strategy as it does for all of our tests. Afirma was featured in 10 conference abstracts during the quarter across leading medical meetings, including the American Association of Endocrine Surgeons, American Association of Clinical Endocrinology and the Endocrine Society. Multiple peer-reviewed manuscripts were published during the quarter and growing interest from independent investigators evaluating Afirma's clinical utility in real-world practice continues to be a competitive differentiation. We are encouraged by the growing momentum behind Afirma Grid, which is supporting an expanding pipeline of academic and industry collaborations. These grid collaborations fuel a virtuous cycle of expanding evidence leading to new publications, scientific presentations and molecular insights that will continue to strengthen the evidence base around Afirma. We expect to see more Afirma publications and scientific abstracts this year than in 2025, further accelerating that momentum. Overall, we remain very pleased with Afirma's performance and believe the combination of continued adoption, share gains, operational improvements and expanding clinical evidence positions the franchise for continued growth. In closing, seeing years of investment and innovation translate into meaningful new opportunities for growth is incredibly rewarding and a testament to the strength of our strategy, our execution and most importantly, our people. Our mission remains centered on improving patient outcomes. And today, our portfolio is helping clinicians and patients make more informed treatment decisions across multiple cancer types and increasingly across the cancer care continuum. Supported by the continued strength of our core franchises, a robust pipeline of clinical evidence and multiple opportunities for future innovation, we remain confident in our ability to continue to deliver durable double-digit growth for the foreseeable future. With that, I'll turn the call over to Rebecca.

Thanks, Marc. We delivered total revenue of $150.3 million in the second quarter, representing 15% year-over-year growth. Total volume increased to approximately 51,000 tests, up 13% compared to the same period in 2025. And we generated $45.8 million of cash from operations, ending the quarter with $485.2 million in cash, cash equivalents and short-term investments. Testing revenue for the quarter was $145.7 million, an increase of 19% year-over-year, driven by Decipher and Afirma growth of 20% and 18%, respectively. Total testing volume was 48,389 tests, representing 14% year-over-year growth. Testing ASP was $3,010, up 4% to the prior year and inclusive of approximately $4.5 million of prior period collections or PTCs. Excluding PTCs, normalized ASP increased 3% to approximately $2,900, driven by the benefits of operational efforts put into place over the course of 2025, which have led to sustained pricing gains in the first half of this year. Turning to gross margin and operating expenses, I'll focus on our non-GAAP results. Non-GAAP gross margin was 74.9%, up 340 basis points year-over-year, driven by strength in our testing business. Testing gross margin increased 200 basis points to 76%, reflecting operational efficiencies from our V2 transcriptome workflow, higher ASP and PTCs. Non-GAAP operating expenses increased 16% year-over-year to $70 million. As we shared last quarter, certain IT expenses associated with software development and project management resources previously reported in G&A have been moved directly into R&D as they are fully dedicated to our product development objectives. As a result, R&D expense increased $12.1 million year-over-year to $26.3 million, approximately half of which were driven by our organizational changes and the other half driven by increased clinical and product investment. Sales and marketing expense increased $2.4 million to $25.5 million, reflecting hiring to support our existing portfolio as well as the recent launches of Prosigna LDT and TrueMRD. G&A expense decreased $4.8 million to $18.1 million, primarily due to the organizational changes previously mentioned. From a profitability standpoint, we delivered GAAP net income of $25.5 million in the quarter. Adjusted EBITDA was $44 million or 29.2% of revenue, up 23% year-over-year and above our long-term target of 25%. This level of profitability continues to demonstrate our operating leverage as we both invest in our growth drivers and generate meaningful cash. Turning to our 2026 outlook. We are raising full year total revenue guidance to $590 million to $596 million, representing 14% to 15% year-over-year growth compared to our prior range of $582 million to $592 million. This reflects expected testing revenue of $576 million to $582 million, representing 17% to 18% year-over-year growth compared to our prior range of $570 million to $580 million, with testing volume growth modestly below revenue. Included in our guidance is approximately $10 million of other testing revenue from cytology services and Decipher Bladder. Further, our guidance assumes approximately 20% Decipher revenue growth. Based on current ordering trends and normal seasonality, we expect approximately 31,000 tests in Q3 and 33,000 in Q4. And given PPCs collected year-to-date and stronger-than-expected ASP performance this year, we now expect ASP to be slightly higher this year compared to 2025. For Afirma, we have increased our revenue guidance to approximately 12% to 14% year-over-year growth, driven by favorable year-to-date PPCs, ongoing ASP improvement and an anticipated no result rate benefit of approximately 3% for the year. Due to typical seasonality and in line with prior years, we expect Q3 volume to be slightly down sequentially with a larger step-up in Q4. On revenue, Afirma is expected to step down sequentially given close to $3 million of PTCs in the second quarter. As Marc shared, we are pleased with the early feedback on our recently launched tests. Given we do not yet have Medicare reimbursement for Prosigna and are still early in the launch process, our revenue guidance excludes contribution from these tests. Moving to profitability. We are maintaining our full year adjusted EBITDA guidance of greater than 26%, reflecting our expected investment to support our growth initiatives throughout the year. As always, while we plan expenses on an annual basis, adjusted EBITDA may fluctuate quarter-to-quarter. In closing, Q2 was a milestone quarter for Veracyte. We successfully launched 2 important new products that expand our ability to serve patients across the cancer care continuum while also delivering strong double-digit revenue growth, profitability and cash generation. Combined with the strength of our core business, these achievements reinforce our confidence in our long-term growth opportunity and position us well to continue to deliver durable double-digit growth. We will now move into the Q&A portion of the call. Operator, please open the lines.

[Operator Instructions] Our first question comes from Tycho Peterson with Jefferies.

This is Lauren on for Tycho. My first one would be on Decipher. With the lower guidance of about 1,000 tests, is this -- are you seeing a threat specifically from AI-based testing? And kind of off that topic, if these approaches kind of continue to improve, what do you see as the future workflow? Would it be an AI-first triage model followed by molecular confirmation? Or are there certain indications where molecular profiling will kind of remain the gold standard?

Lauren, thanks for the question. No, we're not actually. The reduction in our internal expectations for Decipher for the year is only in the low category where we took it down by about 1,000 tests, some of which -- most of which is actually behind us in the second quarter. And the real -- the rationale for that and what we're seeing there is the guideline change that happened at the end of last year where effectively for every test, whether molecular or AI-based for active surveillance, it was taken out of guidelines. And so it's going to depend on -- for that to come back and grow in double digits. It's still growing in single digits for us, but for it to come back and grow in double digits, it's going to need the evidence that we talked about. So we had slightly higher expectations for that coming into the year than we currently do in low risk only. And so that affects every test on the market in similar ways. Not everybody has the same comp. In fact, low was very good for us in this quarter last year. And I'm sure for others, they have different starting points. But from a share standpoint, we're not really seeing any difference at all. And so I think to the second part of your question, I mean, it doesn't really feature when that's not the fact here. We still think that molecular and AI are complementary. They -- we already know they measure different parts of the biology and different things, and we've got a publication that we're working on that covers that that we've talked about previously. And so I think the 2 could potentially coexist at some point, but I don't think it's necessarily one or the other model. In fact, physicians consistently tell us more information is better than less. Anything to add? No.

I'll just add one quick thing, if you don't mind. And that really is to highlight the strength that we saw in the intermediate high-risk category as well as the durability of that strength given incremental data that we hope will be released here shortly, as Marc mentioned on the call. And so yes, we have taken down the low category by a day or 2 across the portion of the year, but I think we are seeing great strength and performance as expected in intermediate and high. And those are the areas where we have the most evidence, we have the most guidelines and that will change here for low as well over the course of '27, '28, '29. So I think it's just -- to me, the way I think about it is we have a great growth driver today and low is an incremental -- is an opportunity for incremental growth in the subsequent years and is a very untapped market at this point in time.

And Lauren, maybe if I can start just to add to what Rebecca said. While we expect these low tablet studies to read out in '27, '28, we don't know if they're going to read out positively or not. But the good news is we have multiple shots on goal with multiple studies coming our way that have been enrolling now for 6, 7 years. So exciting times.

That's super helpful. And then just one last one on kind of expansion of the market for Prosigna. I guess what percent of the existing Oncotype market do you think is like contestable over the next 3 to 5 years? And off of that, what do you expect the earliest uptake in, whether it's across the node-positive populations or just kind of color there.

This is John. Thanks for the question. Yes, we're not limiting ourselves to any specific subsegment of the breast market. We believe the entirety of the HER2-negative ER-positive population is addressable by our value proposition. The latest data from OPTIMA happens to add predictive claims to the node-positive population, both postmenopausal and premenopausal. But one of the large value proposition here we start with an accurate risk stratification to understand what is the real risk of progression in the 10-year time frame. And for that, we already have Level 1A evidence across the board. So like I said, we're excited by the OPTIMA results, but we're not limiting ourselves to just that node-positive population.

And maybe one last thing to add. We haven't gone out and quantified what portion of the market we think we can take over the next 3 to 5 years. But I would say, as Marc cited in the script, based on some early feedback, we are very confident in our ability to have sustained growth with Prosigna and have had numerous conversations with centers that are large in nature who are contemplating not just dabbling and having more active procedures -- not procedures, I'm sorry, more active engagement to the point of effectively fully switching. So we are optimistic and our optimism is fueled by engagement with the market post the OPTIMA results.

Our next question comes from Subbu Nambi with Guggenheim.

This is Ricky on for Subbu. So for a little more color maybe on just how you're thinking about Prosigna going forward from more of a commercial lens. In our early KOL checks, oncologists have been really optimistic about adopting Prosigna and really excited about it, but EMR integration and ordering and results through the EMR were really the one headwind that's been mentioned in terms of increasing adoption. Could you speak to your plans for that type of integration or any other commercial or logistic initiatives you're focused on to support more Prosigna adoption?

Yes. Thanks for the question. We can't disagree. We believe that at volume, EHR integration goes a long way. not just to simplify the logistical burden on the practice administrators and the physicians, but also in just streamlining and even potentially automating some of the test ordering and automation into the overall workflow. Having said all that, we are heavily investing in our team here that's able to leverage both internal resources and external partners and external service providers to get us integrated with as many practices as possible. The good news here is that was already an activity that was on its way to support our Decipher and our Afirma business, and we can tag team on those efforts. But yes, absolutely can't anymore.

Our next question comes from Keith Hinton with Freedom Capital Markets.

Just one quick one on Decipher and then a question on guidance. On Decipher, can you just talk a little bit about the low-risk population, what kind of the penetration level is today for molecular diagnostics and with the guideline changes that you're hoping to have reversed in the future with additional data, kind of where you think that penetration rate could go over the next few years?

Yes, happy to. I think about our penetration, we think we're about 20% penetrated into this important low-risk market. And in fact, the penetration is growing every quarter, even in this quarter, we saw a growth in the number of new customers and the growth in the number of ordering customers. And so it's continuing to grow at a rate that we said single digit that exceeds the rate of incidence growth. But for it to really kick into a new gear, it will -- we do think it will need that NCCN guideline. So between now and then, I think it's going to continue to penetrate more as it grows every quarter -- hopefully, every quarter and certainly every year. And then I think guidelines put it in the same category as intermediate and now what we're seeing with high risk.

And that is, to be clear, our expectation is that we believe that we can have at least 80% penetration and a similar amount of share, if not more, on a sustainable basis on optimized penetration. So there's a huge runway not only in the low-risk opportunity, but equally in the high and to a lesser extent, intermediate, though there's still immense amount of white space left in intermediate. You want to move on to the Decipher question, Keith? I'm sorry, the guidance question?

Our next question comes from Jacob Dodd with Morgan Stanley.

Quickly, if I'm wrong, I believe Prosigna launched with commercial coverage, but not with MolDx. Could you help us understand how you're managing patient access for Medicare beneficiaries right now? Are you performing those tests at risk? And then what is your current expectation for the MolDX time line and confidence level based on OPTIMA data?

Yes. So Prosigna has already enjoyed coverage from Medicare via our on-market FDA approved product. Our plan had been to transition away from the FDA distributed product towards a centralized -- so from a coverage perspective, we're covered. The process moving forward is to submit a tech assessment that outlines our lab validation, the analytical validation, our bridging study through the FDA-approved product and platform and to have that reviewed and subsequently approved by Medicare. We've already been enjoying a few exchanges with MolDX. We see the path forward as fairly straightforward and kind of see the approval of that tech assessment imminently. The last step would then be an agreement of pricing. And for that, we have multiple paths to secure price. And we've guided before to expect the low end of that pricing around $2,500.

Our next question comes from Keith Hinton with Freedom Capital Markets.

Just quickly on guidance. Obviously, the results in the first 2 quarters of the year have been meaningfully above that 26% floor that you guys have given, which you maintained. So I just want to ask sort of how much of that is the incremental investment you talked about kind of pulling forward some of the sales force build for Prosigna and how much of it is just conservatism or however you kind of want to think about it? And if you want to just -- if you can give any color to the level of investment that you're pulling forward for Prosigna as well?

Yes. So I'll handle that last part first. So we are going from a roughly 10-person sales force exiting this year to a 15-person sales force as this year. So that's not going to be a material and that meaningful of a contribution. As John spoke about, obviously, EMRs are part of our activity plan here, and that is something that we are investing in and we'll invest as much as we can because that is such a high ROI endeavor. That being -- all that being said, I wouldn't call this conservatism, Keith. I would call it 2 things. One, we have a huge opportunity in front of us with a deep, deep pipeline across multiple indications, across multiple portions of the care continuum that we want to invest in to drive higher revenue growth in the future, even above and beyond the relatively attractive levels we are today. So I think we have a great opportunity in front of us across MRD, Decipher, Afirma, the rest of the urology space and obviously, Prosigna. And so we're investing heavily in there. I would say the other thing on our guide is we don't necessarily guide on a go-forward basis with PPCs and PPCs have been a significant contributor to the outperformance year-to-date. And so that is just something to take into account. We don't guide that in revenue, and we don't guide it in profitability. And then I would -- the last thing I would say on gross margin, we've had amazing gross margin performance as we do see significant Prosigna volume in the back half of the year, given our revenue recognition policies, as well as just the lack of reimbursement from the get-go that is going to be a slight headwind, and that would be something to take into account if you want to call that Prosigna investment, feel free, but those are really the contributing factors.

Our next question comes from Puneet Souda with Leerink Partners.