Veracyte Inc (VCYT)

Interest coverage

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 35,768 26,862 23,790 -10,123 -56,742 -71,496 -77,672 -51,477 -30,521 -30,750 -37,069 -43,954 -50,558 -50,108 -81,315 -77,895 -66,543 -68,467 -34,453 -34,090
Interest expense (ttm) US$ in thousands 1 2 2 4 5 7 14 17 76 143 197 256 256 249 241 231 225 227 229 256
Interest coverage 35,768.00 13,431.00 11,895.00 -2,530.75 -11,348.40 -10,213.71 -5,548.00 -3,028.06 -401.59 -215.03 -188.17 -171.70 -197.49 -201.24 -337.41 -337.21 -295.75 -301.62 -150.45 -133.16

June 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $35,768K ÷ $1K
= 35,768.00

The provided data on Veracyte Inc's interest coverage ratios over various reporting periods reveals a significant trend of financial deterioration followed by recent improvements. Historically, from September 30, 2020, through March 31, 2023, the company’s interest coverage ratio remained deeply negative, with values worsening progressively—reaching as low as -5,548.00 by December 31, 2023, and further declining to -10,213.71 by March 31, 2024. Negative interest coverage indicates that the company’s earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, suggesting substantial financial distress during this period.

The extreme negative ratios, particularly the plunge to approximately -11,348.40 in June 2024, reflect mounting difficulties in generating adequate earnings to service debt obligations. Such levels of negative coverage typically imply high leverage, operational challenges, or both, and often result in increased borrowing costs, strained liquidity, and potential risk of default if the trend persists.

However, a notable shift occurs in subsequent periods. Starting from September 30, 2024, there is a significant turnaround, with the interest coverage ratio rising to positive territory—11,895.00 by December 31, 2024, and further improving to 13,431.00 and 35,768.00 in subsequent quarters. This rapid increase indicates that the company has managed to substantially improve its earnings relative to interest expenses, possibly through operational enhancements, restructuring, asset sales, or other strategic initiatives.

In summary, the historical data depicts period of severe underperformance in interest coverage, signifying financial distress, followed by a considerable turnaround in late 2024. This shift to positive ratios suggests a potential stabilization or recovery in Veracyte Inc’s earnings capacity, which could positively impact its creditworthiness and overall financial health moving forward.