CareDx(CDNA) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CareDx's unaudited Q1 2024 and 2023 consolidated financial statements, covering balance sheets, operations, equity, cash flows, and accounting notes Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Assets: | | | | Cash and cash equivalents | $93,299 | $82,197 | | Marketable securities | $122,622 | $153,221 | | Accounts receivable | $60,149 | $51,061 | | Inventory | $20,130 | $19,471 | | Total current assets | $303,095 | $313,713 | | Property and equipment, net | $34,411 | $35,246 | | Operating leases right-of-use assets | $28,591 | $29,891 | | Intangible assets, net | $43,330 | $45,701 | | Goodwill | $40,336 | $40,336 | | Total assets | $452,406 | $466,826 | | Liabilities and Stockholders' Equity: | | | | Accounts payable | $9,976 | $12,872 | | Accrued compensation | $14,565 | $19,703 | | Accrued and other liabilities | $45,670 | $45,497 | | Total current liabilities | $70,211 | $78,072 | | Operating lease liability, less current portion | $26,893 | $28,278 | | Other liabilities | $97,686 | $96,551 | | Total liabilities | $196,181 | $205,498 | | Total stockholders' equity | $256,225 | $261,328 | | Total liabilities and stockholders' equity | $452,406 | $466,826 | Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue: | | | | Testing services revenue | $53,837 | $61,784 | | Product revenue | $8,594 | $6,861 | | Patient and digital solutions revenue | $9,618 | $8,617 | | Total revenue | $72,049 | $77,262 | | Operating expenses: | | | | Cost of testing services | $13,632 | $15,296 | | Cost of product | $5,344 | $4,066 | | Cost of patient and digital solutions | $6,958 | $6,604 | | Research and development | $18,711 | $24,357 | | Sales and marketing | $19,830 | $23,231 | | General and administrative | $26,911 | $28,032 | | Total operating expenses | $91,386 | $101,586 | | Loss from operations | $(19,337)$ | $(24,324)$ | | Total other income | $2,595 | $699 | | Loss before income taxes | $(16,742)$ | $(23,625)$ | | Income tax benefit (expense) | $83 | $(124)$ | | Net loss | $(16,659)$ | $(23,749)$ | | Net loss per share (Basic and Diluted) | $(0.32)$ | $(0.44)$ | | Weighted-average shares used to compute net loss per share | 51,692,358 | 53,643,216 | Condensed Consolidated Statements of Comprehensive Loss Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(16,659)$ | $(23,749)$ | | Other comprehensive (loss) gain: | | | | Foreign currency translation adjustment, net of tax | $(1,145)$ | $64 | | Comprehensive loss | $(17,804)$ | $(23,685)$ | Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share data) | Metric | Common Shares (Number) | Stock Amount | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | | :------------------------------------------------- | :--------------------- | :----------- | :------------------------- | :----------------------------------- | :------------------ | :------------------------- | | Balance at December 31, 2023 | 51,503,377 | $49 | $946,511 | $(6,963)$ | $(678,269)$ | $261,328 | | Issuance of common stock under employee stock purchase plan | 73,759 | — | $532 | — | — | $532 | | Repurchase and retirement of common stock | (55,500) | — | — | — | $(522)$ | $(522)$ | | RSU settlements, net of shares withheld | 252,662 | — | $(668)$ | — | — | $(668)$ | | Issuance of common stock for services | 6,813 | — | $56 | — | — | $56 | | Issuance of common stock for cash upon exercise of stock options | 1,501 | — | $8 | — | — | $8 | | Employee stock-based compensation expense | — | — | $13,295 | — | — | $13,295 | | Foreign currency translation adjustment, net of tax | — | — | — | $(1,145)$ | — | $(1,145)$ | | Net loss | — | — | — | — | $(16,659)$ | $(16,659)$ | | Balance at March 31, 2024 | 51,782,612 | $49 | $959,734 | $(8,108)$ | $(695,450)$ | $256,225 | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash (used in) provided by operating activities | $(15,312)$ | $671 | | Net cash provided by (used in) investing activities | $27,660 | $(14,771)$ | | Net cash used in financing activities | $(1,275)$ | $(1,138)$ | | Effect of exchange rate changes on cash and cash equivalents | $26 | $(25)$ | | Net increase (decrease) in cash, cash equivalents and restricted cash | $11,099 | $(15,263)$ | | Cash, cash equivalents and restricted cash at beginning of period | $82,783 | $90,443 | | Cash, cash equivalents and restricted cash at end of period | $93,882 | $75,180 | Notes to Unaudited Condensed Consolidated Financial Statements 1. ORGANIZATION AND DESCRIPTION OF BUSINESS CareDx is a precision medicine company providing diagnostic solutions for transplant patients via testing, products, and digital offerings - CareDx, Inc. is a leading precision medicine company specializing in diagnostic solutions for transplant patients and caregivers, with primary operations in Brisbane, California; Omaha, Nebraska; Fremantle, Australia; and Stockholm, Sweden[13] - The company's commercially available testing services include AlloSure® Kidney, AlloMap® Heart, AlloSure® Heart, and AlloSure® Lung, all focused on surveillance for various organ transplant patients[13] - CareDx also provides digital solutions for transplant centers through acquisitions like Ottr, XynManagement, TransChart, MedActionPlan, TTP, HLA Data Systems, and MediGO, enhancing patient management and transplant success[13] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Details significant accounting policies and estimates for financial statements, covering revenue recognition and new pronouncements - The una