Core Insights - The article emphasizes the importance of conducting thorough due diligence before making any investment decisions [2][3] - It highlights that past performance does not guarantee future results, indicating a need for cautious evaluation of investment opportunities [3] Group 1 - The article serves solely for informational purposes and is not intended as investment advice [2] - It stresses that the author does not have any business relationships with the companies mentioned, ensuring an unbiased perspective [2] - The content is produced by third-party authors, which may include both professional and individual investors without formal licensing [3] Group 2 - The article notes that future outcomes are uncertain and can change based on evolving market conditions [2] - It advises investors to seek personal financial advice for specific investment decisions [2] - The information provided is meant to assist in the due diligence process rather than serve as a direct recommendation [2]

Summary of CareDx Conference Call Company Overview - **Company**: CareDx - **Industry**: Life Sciences Tools and Diagnostics Key Highlights 1. **Q1 Performance**: CareDx reported its seventh consecutive quarter of testing services volume growth, with strong performance across heart, kidney, and lung transplantation sectors [2][3] 2. **ISHLT Conference**: Over 60 abstracts from more than 90 transplant centers presented data on CareDx products, indicating broad acceptance and utilization in the transplant community [3] 3. **Surveillance Protocols**: Reactivation of surveillance protocols in transplant centers is expected to contribute to growth, particularly in kidney and heart transplantation [5][6] 4. **Epic Integration**: The integration with Epic is anticipated to drive a volume boost of 10% or greater, with material impacts expected post-2026 [7][8] 5. **AlloSure Launch**: Initial uptake of AlloSure in specialized populations (pediatrics and simultaneous pancreas-kidney transplant patients) has been strong, indicating market validation [9] 6. **Cell Therapy Market**: CareDx is focusing on the cell therapy market, with plans to develop products for allogeneic stem cell transplants, which occur in the same centers as solid organ transplants [10][11] 7. **IOTA Program**: The IOTA program, starting in July, aims to increase kidney transplant volumes by incentivizing centers to utilize more available kidneys [14][16] 8. **Portfolio Approach**: CareDx emphasizes its end-to-end solutions for transplant centers, integrating diagnostics, software, and pharmacy services to enhance patient management [17][18] Financial Insights 1. **Revenue Growth**: The company is targeting a 15% compound annual growth rate (CAGR) through its long-range plan (LRP) [8] 2. **ASP Guidance**: CareDx has guided a blended average selling price (ASP) of $1,360 for the year, with expectations for gradual improvement as contracts are secured [27] 3. **Gross Margins**: Current gross margins for testing services are in the high 70s, with potential for further expansion as ASPs improve [29][30] 4. **Operating Expenses**: The company aims to leverage operating expenses, particularly in R&D and G&A, to achieve a 20% adjusted EBITDA margin target [39][40] Strategic Initiatives 1. **Sales and Marketing Expansion**: CareDx has increased its field force by 50% to enhance customer engagement and protocol adherence [22][23] 2. **CPT Code Impact**: The introduction of a new CPT code for AlloSure is expected to facilitate contracting with payers and improve market access [25][26] 3. **International Expansion**: CareDx is committed to the European market, focusing on evidence generation for AlloSeq cell-free DNA and leveraging distributors for sales [49][50] 4. **Pipeline Development**: The company is actively evaluating opportunities in pre- and post-transplant spaces, with a focus on organic growth and potential inorganic investments [53][55] Competitive Landscape 1. **Brand Value**: CareDx aims to strengthen its brand in the transplant diagnostics market by investing in evidence generation and enhancing customer relationships [62][63] 2. **Unique Value Proposition**: The company differentiates itself by offering a comprehensive solution set that includes software, IVD kits, and pharmacy services, which is not commonly found in the industry [65][66] Underappreciated Aspects - CareDx's comprehensive approach to the transplant market, integrating various services beyond testing, is seen as a significant growth driver that may not be fully recognized by investors [64][66]

Summary of CareDx (CDNA) 2025 Conference Call Company Overview - CareDx operates in the molecular diagnostics market, focusing on transplant care and management with a global workforce of approximately 650 employees, including 180 in commercial growth, 100 scientists, and 80 software programmers [2][3] Key Growth Drivers - **Go-to-Market Strategy**: Launching new products and extensions, such as AlloSure for heart pediatric patients, to address the entire heart transplant market [2] - **Evidence Generation**: Publishing data to drive payer coverage and reimbursement for products [3] - **Operational Excellence**: Restructuring the revenue cycle management (RCM) function and implementing Epic Aura to enhance efficiency for transplant centers [3] Financial Performance - Q1 revenue growth of 18% year-over-year, with testing volumes increasing by 12% [3] - Ended Q1 with $231 million in cash and no debt [3] - Completed a stock repurchase program, buying back 5% of outstanding shares for approximately $50 million, with an additional $50 million authorized for future buybacks [4] Market Insights - The U.S. transplant market is valued at approximately $50 billion, encompassing organ procurement, procedures, and post-transplant care [4] - Annually, about 46,000 transplants are performed in the U.S., with an average expenditure of $1 million per transplanted organ [5] - CareDx performed around 1 million monitoring assays for transplant organ rejection [5] Product Offerings - CareDx provides a range of solutions including IVD kits for organ matching, software for managing transplant waitlists, and post-transplant monitoring services [8][9] - The company has a strong presence in the transplant market, with 70% of U.S. transplant centers using one or more of its software solutions [5] Market Growth Factors - The transplant market is experiencing organic growth due to technological innovations and government programs promoting transplantation, particularly in the kidney space [7][8] - The IOTA program, effective July 1, aims to increase kidney transplantation rates by optimizing the use of available kidneys [8][41] Pipeline and Future Products - New product launches include AlloSure for simultaneous pancreas and kidney transplantation and AlloSure Heart Pediatrics, expanding the addressable market [12][13] - The histoMAP assay is set to launch, differentiating between types of organ rejection [13] Revenue Guidance - CareDx anticipates a 12% year-over-year revenue growth in 2025, with testing services expected to grow by 17% [22] - The company projects a 15% annual growth rate, driven by market expansion and product adoption [20] Competitive Landscape - The transplant diagnostics market remains underpenetrated, presenting significant growth opportunities for CareDx despite competition [44] Strategic Initiatives - Focus on enhancing payer coverage through evidence generation and successful trials [16][26] - Plans for potential M&A opportunities to complement existing product lines [34] Conclusion - CareDx is positioned for continued growth in the transplant diagnostics market, leveraging innovative solutions and a strong operational framework to enhance patient care and drive revenue [20][44]

Core Viewpoint - Johnson Fistel, PLLP has initiated an investigation into CareDx, Inc. for potential breaches of fiduciary duties and violations of federal securities laws [1][2]. Investigation Details - The investigation focuses on actions taken by CareDx insiders between April 30, 2020, and February 24, 2022, which involved issuing false and misleading statements about the company's compliance with healthcare laws and revenue growth [2]. - CareDx began disclosing issues on October 28, 2021, revealing that the company was under multiple government investigations and that its financial results were significantly lower than previously reported [2]. - By November 3, 2022, CareDx's share price had decreased by over 77.22% from its previous levels [2]. Shareholder Information - Current stockholders who have held CareDx stock since at least January 2021 are encouraged to contact Johnson Fistel to discuss their legal rights regarding the investigation [3].

Core Viewpoint - CareDx reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, and showing improvement from a loss of $0.03 per share a year ago, indicating a 50% earnings surprise [1] - The company posted revenues of $84.69 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.30%, but showing growth from $72.05 million year-over-year [2] Financial Performance - CareDx has surpassed consensus EPS estimates in all four of the last quarters, with a notable earnings surprise of 157.14% in the previous quarter [2][1] - The current consensus EPS estimate for the upcoming quarter is $0.13, with expected revenues of $90.31 million, and for the current fiscal year, the EPS estimate is $0.58 on revenues of $370.95 million [7] Market Position - CareDx shares have underperformed the market, losing approximately 15.3% since the beginning of the year, compared to a decline of 5.5% in the S&P 500 [3] - The Zacks Rank for CareDx is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Outlook - The Medical Services industry, to which CareDx belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - CareDx reported quarterly revenue of $84.7 million, an 18% increase year over year, with adjusted EBITDA of $4.6 million [11][31][39] - The company ended the quarter with a cash balance of $231 million and no debt [11][39] - Non-GAAP gross margin improved to 68.5%, up 150 basis points year over year [34][35] Business Line Data and Key Metrics Changes - Testing services revenue was $61.9 million, up 15% year over year, with approximately 47,100 tests delivered, a 12% increase from the prior year [11][32] - Patient and Digital Solutions revenue reached $12 million, representing a 24% year over year growth [29][33] - Lab products revenue was $10.8 million, up 26% year over year, driven by sales of AlloSeq TX kits [29][33] Market Data and Key Metrics Changes - CareDx added 3.5 million new covered lives for AlloMap Heart and 15.5 million for AlloSure testing in the first quarter [14] - The company launched two expanded indications for AlloSure, targeting pediatric heart transplant patients and simultaneous pancreas-kidney transplant patients [12][13] Company Strategy and Development Direction - CareDx aims to achieve $365 million to $375 million in revenue for 2025, with a long-range plan of reaching $500 million in revenue by 2027 [11][39] - The company is focusing on expanding its testing services and enhancing market access strategies through published evidence and payer network integration [10][14][29] Management's Comments on Operating Environment and Future Outlook - Management noted a positive trend in surveillance testing volumes, particularly in kidney testing, and expects continued growth in the coming quarters [46][52] - The company anticipates a significant uptick in transplant procedures in the second half of the year due to the initiation of the IOTA program [84] Other Important Information - CareDx is integrating Epic Aura to streamline the ordering process for healthcare providers, with a full launch expected by the end of the year [29][61] - The company reached an agreement to resolve a securities class action litigation for $20.25 million, with expected coverage from insurers [38] Q&A Session Summary Question: Signs of volume returning in surveillance testing - Management confirmed that they are seeing signs of volume returning, particularly in kidney testing, and expect continued growth [46][47] Question: Higher than expected R&D and SG&A expenses - Management explained that the increase in operating expenses was primarily due to investments in sales and marketing, with a focus on maintaining a tight control on overall expenses [48][49] Question: Progress on surveillance volumes and protocols - Management indicated that they are making progress on surveillance testing protocols and expect growth in Q2 [51][52] Question: Impact of new CPT code on coverage and ASP - Management highlighted that the new AlloSure specific code will facilitate better payer contracts and improve ASP per test [85] Question: Incremental benefit from transplant pharmacy on testing services revenue - Management noted that the synergy between patient solutions and testing services is strong, leading to greater engagement and protocol adoption [88][90] Question: Competitive developments in the space - Management expressed confidence in CareDx's market leadership and does not anticipate competitive announcements impacting guidance [97][98]

Q1 2025 Financial Highlights - Total revenue reached $84.7 million, an 18% increase year-over-year[13] - Testing Services volume grew to approximately 47,100 tests, a 12% increase year-over-year[18] - The company achieved a non-GAAP gross margin of 68.5%, a 150 basis points improvement year-over-year[39] - Adjusted EBITDA was positive at $4.6 million, a $6.4 million improvement year-over-year[14] - The company holds a strong cash balance of approximately $231 million, with no debt[15] Commercial Coverage and Clinical Evidence - Expanded AlloMap® Heart coverage by 3.5 million commercial lives and added 15.5 million new commercial covered lives for AlloSure[11] - Submitted the second manuscript of the SHORE (Surveillance HeartCare Outcomes Registry) study for publication[12] 2025 Guidance - Reaffirmed full-year revenue guidance of $365 million – $375 million[16] - The company estimates ASP to be approximately $1,360 per test on a blended basis[59]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $84.7 million, an increase of 18% year over year, with adjusted EBITDA of $4.6 million, compared to an adjusted EBITDA loss of $1.9 million in Q1 2024 [9][31][35] - The cash balance at the end of the quarter was $231 million, with no debt, reflecting a $15 million increase from $216 million at the end of Q1 2024 [9][35] - Non-GAAP gross margin improved to 68.5%, up 150 basis points year over year, driven by ASP expansion [30][31] Business Line Data and Key Metrics Changes - Testing services revenue was $61.9 million, up 15% year over year, with approximately 47,100 tests delivered, a 12% increase from the prior year [9][29] - Patient and Digital Solutions revenue reached $12 million, representing a 24% year over year growth, while products revenue was $10.8 million, up 26% year over year [26][30] - Adjusted testing services revenue was $63 million, up 26% year over year on a comparable basis, excluding $1.1 million in write-offs for aged receivables [30] Market Data and Key Metrics Changes - The company added 3.5 million new covered lives for AlloMap Heart and 15.5 million new covered lives for AlloSure testing in the first quarter [12] - The launch of two expanded indications for AlloSure testing is expected to enhance market penetration, particularly in pediatric heart transplant patients and simultaneous pancreas-kidney transplant patients [10][11] Company Strategy and Development Direction - The company is focused on expanding its testing services and market access strategies, with a long-range plan to achieve $500 million in revenue and 20% adjusted EBITDA by 2027 [9] - A significant initiative to integrate Epic Aura aims to streamline the ordering process for healthcare providers, enhancing operational efficiency [25][26] - The company is investing in sales and marketing to accelerate growth, with a disciplined approach to managing G&A and legal expenses [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the gradual return of surveillance testing volumes, particularly in kidney testing, and expects continued growth in Q2 [44][50] - The company anticipates a significant uptick in transplant procedures in the second half of the year, driven by the initiation of the IOTA program [78] - Management reiterated guidance for 2025 revenue of $365 million to $375 million, with expectations of mid-teens growth in testing volumes [36][37] Other Important Information - The company reached an agreement to resolve a securities class action litigation for $20.25 million, with expected coverage of approximately $14.9 million from D&O insurers [34] - The company is enhancing its revenue cycle management processes to improve billing and collections, which is expected to drive ASP increases over the next six to eight quarters [66] Q&A Session Summary Question: Signs of volume returning for surveillance testing - Management confirmed that they are seeing signs of volume returning, particularly in kidney testing, and progress has been made on surveillance testing protocols [44] Question: Higher than expected R&D and SG&A expenses - Management noted that the increase in operating expenses was primarily driven by investments in sales and marketing, with a focus on maintaining a tight control on overall expenses [45] Question: Additional color on surveillance volumes and protocols - Management emphasized that while they are making progress, they expect to see growth in Q2, with centers responding positively to the reinitiation of surveillance [50] Question: Impact of new LCDs for transplant testing - Management believes that the growing body of evidence supporting surveillance testing will solidify their position for coverage, although no specific timing for new LCDs was provided [51] Question: Feedback on Epic integration - Management indicated that the integration is ahead of schedule, with a full launch expected by the end of Q2, which is anticipated to reduce friction for healthcare providers [54][60] Question: Incremental benefit from transplant pharmacy on testing services revenue - Management highlighted that the synergy between patient solutions and testing services is strong, leading to greater access and engagement with customers [82]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The company's Q1 2025 financials show total assets of $489.6 million, a net loss of $10.4 million, and a restatement of the comparative 2024 period [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $88,745 | $114,689 | | Marketable securities | $142,172 | $145,964 | | Accounts receivable | $71,485 | $64,605 | | Total current assets | $350,239 | $351,832 | | Total assets | $489,638 | $491,050 | | **Liabilities & Stockholders' Equity** | | | | Accrued litigation settlement expense | $20,250 | $0 | | Total current liabilities | $85,284 | $89,371 | | Total liabilities | $110,289 | $112,617 | | Total stockholders' equity | $379,349 | $378,433 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Testing services revenue | $61,921 | $53,837 | | Product revenue | $10,810 | $8,594 | | Patient and digital solutions revenue | $11,954 | $9,618 | | **Total revenue** | **$84,685** | **$72,049** | | Total operating expenses | $98,059 | $94,615 | | Loss from operations | ($13,374) | ($22,566) | | **Net loss** | **($10,353)** | **($19,888)** | | Net loss per share (Basic & Diluted) | ($0.19) | ($0.38) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($26,584) | ($15,312) | | Net cash provided by investing activities | $1,325 | $27,660 | | Net cash used in financing activities | ($643) | ($1,275) | | **Net (decrease) increase in cash** | **($25,979)** | **$11,099** | | Cash, cash equivalents and restricted cash at end of period | $89,295 | $93,882 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail a restatement of Q1 2024 financials, significant revenue from Medicare, a $20.25 million litigation settlement, and a new $50 million stock repurchase program - The company restated its financial statements for the three months ended March 31, 2024, which increased the previously reported net loss from **$16.7 million to $19.9 million** due to corrections in stock-based compensation expense[29](index=29&type=chunk)[31](index=31&type=chunk) - Revenue from Medicare represented approximately **37% of total revenue** for the three months ended March 31, 2025, up from 33% in the same period of 2024[37](index=37&type=chunk) - In the ongoing litigation with Natera, a court overturned a jury verdict against CareDx in February 2025, concluding Natera's patents were invalid, and the previously recognized **$96.3 million liability was derecognized** as of December 31, 2024[67](index=67&type=chunk) - The company reached an agreement-in-principle to settle a Securities Class Action lawsuit for approximately **$20.25 million**, recording a net litigation settlement expense of approximately **$5.4 million** in Q1 2025[77](index=77&type=chunk) - On February 20, 2025, the Board of Directors approved a new Stock Repurchase Program authorizing the purchase of up to **$50 million in common stock** over two years, with no shares repurchased as of March 31, 2025[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 revenue grew 18% year-over-year to $84.7 million, net loss improved to $10.4 million, and the company maintains a strong liquidity position with $230.9 million in cash and marketable securities Q1 2025 Financial Highlights | Metric | Q1 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $84.7 million | +18% | | Testing Services Revenue | $61.9 million | +15% | | Testing Services Volume | ~47,100 | +12% | | GAAP Net Loss | ($10.4 million) | Improved from ($19.9M) | | Cash & Marketable Securities | $230.9 million | N/A | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) - Testing services revenue grew **15% YoY to $61.9 million**, primarily driven by a 12% increase in testing volume across all organs[128](index=128&type=chunk) - Product revenue increased **26% YoY to $10.8 million**, mainly due to higher sales of commercial NGS-based kitted solutions[129](index=129&type=chunk) - Patient and digital solutions revenue rose **24% YoY to $12.0 million**, driven by digital solutions like Ottr software and higher pharmacy sales[130](index=130&type=chunk) - General and administrative expenses decreased by **$7.4 million (24%) YoY**, primarily due to a $6.4 million reduction in stock-based compensation and a $2.0 million decrease in legal expenses[136](index=136&type=chunk) - A litigation settlement expense of **$5.4 million** was recorded in Q1 2025 related to the settlement of the Securities Class Action lawsuit[137](index=137&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2025, the company had **$230.9 million in cash, cash equivalents, and marketable securities**, with no outstanding debt[149](index=149&type=chunk) - The company has an accumulated deficit of **$636.6 million** as of March 31, 2025[149](index=149&type=chunk) - Management believes existing cash and expected cash from operations will be sufficient to meet cash requirements for the next 12 months[150](index=150&type=chunk) - A stock repurchase program, renewed in February 2025, allows for the purchase of up to **$50 million in common stock**, with the full amount available as of March 31, 2025[152](index=152&type=chunk)[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate and foreign currency fluctuations, with defined potential impacts on financial statements but no current use of hedging instruments - A hypothetical 100 basis point increase or decrease in interest rates would have an approximate impact of **$0.9 million** on the company's financial statements[160](index=160&type=chunk) - An unfavorable 10% change in foreign currency exchange rates would have negatively impacted product revenue by **$0.4 million** and the balance sheet by **$0.1 million** for the quarter ended March 31, 2025[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a previously identified material weakness in internal control - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were **not effective** at a reasonable assurance level[162](index=162&type=chunk) - The ineffectiveness is due to a **material weakness** identified as of December 31, 2024, related to deficiencies in controls for complex and/or non-routine transactions[163](index=163&type=chunk)[164](index=164&type=chunk) - Management is continuing its remediation plan, which includes implementing training, updating accounting policies, and enhancing controls related to stock-based compensation[167](index=167&type=chunk)[169](index=169&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section references Note 8 for details on legal matters, including litigation with Natera and a securities class action settlement - The company refers to Note 8, "Commitments and Contingencies," for detailed information on its legal proceedings[170](index=170&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) Key risks include a history of net losses, significant reliance on Medicare reimbursement, ongoing litigation, intense competition, and an unremediated material weakness in internal controls - The company has a history of substantial net losses, with an accumulated deficit of **$636.6 million** as of March 31, 2025, and expects to incur net losses for the next several years[172](index=172&type=chunk) - A substantial portion of revenue comes from Medicare, which represented **51% of testing services revenue** for Q1 2025, making financial performance highly sensitive to reimbursement changes[175](index=175&type=chunk) - The company faces significant competition from established diagnostic tests, other molecular diagnostic companies like Natera and Eurofins, and new market entrants[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - A **material weakness** in internal control over financial reporting, first identified for fiscal year 2022, was not remediated as of December 31, 2024, posing a risk of inaccurate financial reporting[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company withheld shares to satisfy employee tax obligations and approved a new $50 million stock repurchase program with no shares purchased during the quarter - A total of **137,580 shares** were withheld from employees to cover tax obligations related to vested restricted stock units during the three months ended March 31, 2025[232](index=232&type=chunk) - A new stock repurchase program for up to **$50 million** was approved on February 20, 2025, with no shares repurchased under this program in Q1 2025[233](index=233&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the three months ended March 31, 2025[236](index=236&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including CEO and CFO certifications

[CareDx First Quarter 2025 Results](index=1&type=section&id=CareDx%20First%20Quarter%202025%20Results) [Financial Highlights](index=1&type=section&id=First%20Quarter%20Financial%20Highlights) CareDx reported strong Q1 2025 financial performance with 18% revenue growth to $84.7 million, achieving non-GAAP net income of $5.4 million and adjusted EBITDA of $4.6 million, and maintaining a solid $231 million cash position Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Revenue | $84.7M | $72.0M | +18% | | Testing Services Revenue | $61.9M | $53.8M | +15% | | GAAP Net Loss | ($10.4M) | ($19.9M) | 48% Improvement | | Non-GAAP Net Income/(Loss) | $5.4M | ($1.4M) | Significant Improvement | | Adjusted EBITDA | $4.6M | ($1.9M) | Significant Improvement | | Cash & Marketable Securities | $231M | N/A | N/A | - The company reaffirmed its full-year 2025 guidance for revenue of **$365 million to $375 million** and adjusted EBITDA of **$29 million to $33 million** and maintained its 2027 target of **$500 million** in revenue and **$100 million** in adjusted EBITDA[6](index=6&type=chunk)[10](index=10&type=chunk) [Business Highlights](index=1&type=section&id=First%20Quarter%20Business%20Highlights) CareDx achieved its seventh consecutive quarter of sequential growth in testing services volume, reaching approximately 47,100 tests, while advancing strategic initiatives for AlloSure®, AlloHeme™, and Revenue Cycle Management - Testing services volume grew to approximately **47,100**, marking the seventh consecutive quarter of sequential growth[1](index=1&type=chunk)[6](index=6&type=chunk) - Launched two expanded indications for AlloSure® Testing Services: AlloSure Heart for pediatric patients and AlloSure Kidney for simultaneous pancreas-kidney (SPK) transplant patients[6](index=6&type=chunk) - Advanced the AlloHeme™ pipeline with data presentations at the TANDEM and EBMT conferences[4](index=4&type=chunk)[6](index=6&type=chunk) - Completed the restructuring of the Revenue Cycle Management team to drive Average Selling Price (ASP) growth and launched a strategic initiative to enhance integration with EPIC AURA EMR systems[6](index=6&type=chunk) [Detailed Financial Results](index=1&type=section&id=Q1%202025%20Financial%20Results) Q1 2025 total revenue reached $84.7 million, up 18% YoY, driven by growth across all segments, significantly narrowing GAAP net loss to $10.4 million and achieving non-GAAP net income of $5.4 million Q1 Revenue Breakdown (YoY) | Revenue Segment | Q1 2025 | Q1 2024 | Growth | | :--- | :--- | :--- | :--- | | Testing Services | $61.9M | $53.8M | +15% | | Patient and Digital Solutions | $12.0M | $9.6M | +24% | | Product | $10.8M | $8.6M | +26% | | **Total Revenue** | **$84.7M** | **$72.0M** | **+18%** | - Testing Services revenue for Q1 2025 included a **$1.1 million** write-off for aged receivables, with non-GAAP adjusted testing services revenue at **$63.0 million** excluding this[5](index=5&type=chunk)[7](index=7&type=chunk) Q1 Profitability (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Net Loss | ($10.4M) | ($19.9M) | | GAAP Net Loss per Share | ($0.19) | ($0.38) | | Non-GAAP Net Income/(Loss) | $5.4M | ($1.4M) | | Non-GAAP Diluted Net Income/(Loss) per Share | $0.09 | ($0.03) | | Adjusted EBITDA | $4.6M | ($1.9M) | [Financial Statements](index=4&type=section&id=Financial%20Statements) The financial statements detail an 18% revenue increase and reduced operating loss to $13.4 million, while the balance sheet shows stable total assets at $489.6 million and a strong equity position with no debt [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 total revenues were $84.7 million, with operating expenses of $98.1 million, resulting in a $13.4 million loss from operations and a GAAP net loss of $10.4 million, or $0.19 per share Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $84,685 | $72,049 | | Total Operating Expenses | $98,059 | $94,615 | | Loss from Operations | ($13,374) | ($22,566) | | Net Loss | ($10,353) | ($19,888) | | Net Loss per Share (Basic & Diluted) | ($0.19) | ($0.38) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, CareDx held $230.9 million in cash and marketable securities, with total assets of $489.6 million, total liabilities of $110.3 million, and total stockholders' equity of $379.3 million, with no debt Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $88,745 | $114,689 | | Marketable securities | $142,172 | $145,964 | | Total Assets | $489,638 | $491,050 | | Total Liabilities | $110,289 | $112,617 | | Total Stockholders' Equity | $379,349 | $378,433 | [2025 Guidance](index=2&type=section&id=2025%20Guidance) CareDx reaffirms its full-year 2025 financial guidance, projecting total revenue between $365 million and $375 million and adjusted EBITDA between $29 million and $33 million Full-Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $365M - $375M | | Adjusted EBITDA | $29M - $33M | [Non-GAAP Financial Measures & Reconciliations](index=2&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) CareDx uses non-GAAP measures like adjusted EBITDA and non-GAAP net income to clarify core operating performance, reporting Q1 2025 non-GAAP net income of $5.4 million and adjusted EBITDA of $4.6 million - The company uses non-GAAP financial measures to assist investors in assessing operating results by excluding items like stock-based compensation, acquisition-related amortization, and litigation settlement expenses[14](index=14&type=chunk)[15](index=15&type=chunk) Reconciliation of GAAP Net Loss to Non-GAAP Net Income (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP Net Loss** | **($10,353)** | **($19,888)** | | Stock-based compensation | $8,931 | $16,573 | | Acquisition related-amortization | $1,539 | $1,653 | | Litigation settlement expense | $5,360 | $0 | | Other adjustments | $46 | $214 | | **Non-GAAP Net Income (Loss)** | **$5,424** | **($1,448)** | Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Non-GAAP Net Income (Loss)** | **$5,424** | **($1,448)** | | Interest income | ($2,784) | ($2,885) | | Income tax expense | $157 | $19 | | Depreciation expense | $2,061 | $2,168 | | Other (income) expense, net | ($295) | $290 | | **Adjusted EBITDA** | **$4,563** | **($1,856)** |