CareDx(CDNA) - 2024 Q1 - Quarterly Results

CareDx Reports First Quarter 2024 Results Executive Summary & Highlights CareDx reported Q1 2024 revenue of $72.0 million, sequential growth in Testing Services, and raised its full-year 2024 guidance First Quarter 2024 Key Financial Highlights | Metric | Q1 2024 Value | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenue | $72.0 million | -7% | +10% | | Testing Services Revenue | $53.8 million | -13% | +15% | | Patient & Digital Solutions Revenue | $9.6 million | +12% | N/A | | Product Revenue | $8.6 million | +25% | N/A | | Non-GAAP Net Loss | $(1.4) million | N/A | N/A | | Non-GAAP Net Loss Per Share | $(0.03) | N/A | N/A | | Adjusted EBITDA Loss | $(1.9) million | N/A | N/A | | Cash, Cash Equivalents, Marketable Securities | ~$216 million | N/A | N/A | - SHORE data presented at ISHLT demonstrated that HeartCare® multimodal testing outperforms donor-derived cell-free DNA (dd-cfDNA) testing alone in identifying allograft rejection[4] - Over 30 oral presentations, posters, and two symposia highlighting CareDx's scientific advancements in heart and lung transplantation were presented at the International Society for Heart and Lung Transplantation (ISHLT)[11] - Expanded payer coverage by 14 million lives nationwide[24] - Total AlloSure® and AlloMap® patient results provided were approximately 42,000, a decrease of 16% year-over-year but an increase of 6% quarter-over-quarter, marking the third consecutive quarter of growth[5][36] Management Commentary The CEO highlighted the return to sequential growth in Testing Services and the company's leadership in transplant patient care - CEO John W Hanna stated, 'We set a new baseline in our Testing Services business in the second half of 2023 and are back to delivering sequential growth I am pleased with the team's strong performance across all businesses this quarter'[5] - CareDx is positioned as the leader in transplant patient care, with dedication to serving patients as a catalyst for growth[5] First Quarter 2024 Financial Results (GAAP) The company reported Q1 2024 GAAP revenue of $72.0 million and an improved net loss of $16.7 million amid lower operating expenses Revenue Performance Q1 2024 total revenue was $72.0 million, with Testing Services showing strong sequential growth and benefiting from RCM initiatives Revenue Breakdown (Three Months Ended March 31) | Revenue Type | Q1 2024 (in thousands) | Q1 2023 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Testing Services Revenue | $53,837 | $61,784 | -13% | | Product Revenue | $8,594 | $6,861 | +25% | | Patient and Digital Solutions Revenue | $9,618 | $8,617 | +12% | | Total Revenue | $72,049 | $77,262 | -7% | - Testing Services revenue benefited from continued revenue cycle management initiatives, adding approximately $3.7 million in revenue in the first quarter[13] Operating Expenses Total GAAP operating expenses decreased by 10% year-over-year to $91.4 million, driven by reductions across key expense categories GAAP Operating Expenses (Three Months Ended March 31, in thousands) | Expense Type | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Cost of testing services | $13,632 | $15,296 | -11% | | Cost of product | $5,344 | $4,066 | +31% | | Cost of patient and digital solutions | $6,958 | $6,604 | +5% | | Research and development | $18,711 | $24,357 | -23% | | Sales and marketing | $19,830 | $23,231 | -15% | | General and administrative | $26,911 | $28,032 | -4% | | Total Operating Expenses | $91,386 | $101,586 | -10% | Net Loss and EPS The company's GAAP net loss improved to $16.7 million, or $0.32 per share, compared to a loss of $23.7 million in the prior year GAAP Net Loss and EPS (Three Months Ended March 31) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Loss | $(16,659) thousand | $(23,749) thousand | | Basic Net Loss Per Share | $(0.32) | $(0.44) | | Diluted Net Loss Per Share | $(0.32) | $(0.44) | | Weighted-Average Shares (Basic & Diluted) | 51,692,358 | 53,643,216 | Balance Sheet Highlights The balance sheet shows total assets of $452.4 million and stockholders' equity of $256.2 million as of March 31, 2024 Balance Sheet Highlights (in thousands) | Asset/Liability/Equity | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $93,299 | $82,197 | | Marketable securities | $122,622 | $153,221 | | Accounts receivable | $60,149 | $51,061 | | Total current assets | $303,095 | $313,713 | | Total assets | $452,406 | $466,826 | | Total current liabilities | $70,211 | $78,072 | | Total liabilities | $196,181 | $205,498 | | Total stockholders' equity | $256,225 | $261,328 | Non-GAAP Financial Measures and Reconciliation CareDx presents non-GAAP measures, which show improved net loss and adjusted EBITDA, to supplement GAAP results and aid analysis Non-GAAP Definitions Non-GAAP results exclude items like stock-based compensation and acquisition-related charges to reflect core operating performance - Non-GAAP net loss and per share results exclude impacts of stock-based compensation, changes in estimated fair value of contingent consideration, acquisition-related impairment charges and amortization of purchased intangible assets and related tax effects, costs involved with completing an acquisition, unrealized loss on investments, restructuring charges, and certain other charges[29] - Adjusted EBITDA is defined as non-GAAP net loss before net interest income, income tax (benefit) expense, depreciation and other expense, net[17] Non-GAAP Operating Expenses Total non-GAAP operating expenses were reduced by 15% year-over-year to $52.3 million in Q1 2024 Non-GAAP Operating Expenses (Three Months Ended March 31, in thousands) | Expense Type | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Non-GAAP cost of testing services | $12,846 | $14,488 | -11% | | Non-GAAP cost of product | $4,607 | $3,288 | +40% | | Non-GAAP cost of patient and digital solutions | $6,320 | $5,954 | +6% | | Non-GAAP research and development expenses | $16,926 | $22,395 | -24% | | Non-GAAP sales and marketing expenses | $16,145 | $18,899 | -15% | | Non-GAAP general and administrative expenses | $19,229 | $20,455 | -6% | | Total Non-GAAP Operating Expenses | $52,300 | $61,749 | -15% | Non-GAAP Gross Profit and Margin Non-GAAP gross profit was $48.3 million in Q1 2024, with a non-GAAP gross margin of 67% Non-GAAP Gross Profit and Margin (Three Months Ended March 31, in thousands, except percentages) | Metric | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | GAAP gross profit | $46,115 | $51,296 | -10% | | Non-GAAP gross profit | $48,276 | $53,532 | -10% | | Non-GAAP gross margin % | 67% | 69% | -2 ppts | Non-GAAP Net Loss and EPS The non-GAAP net loss significantly improved to $1.4 million, or $0.03 per share, from $5.8 million in the prior year Non-GAAP Net Loss and EPS (Three Months Ended March 31) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Non-GAAP Net Loss | $(1,448) thousand | $(5,818) thousand | | Non-GAAP Basic Net Loss Per Share | $(0.03) | $(0.11) | | Non-GAAP Diluted Net Loss Per Share | $(0.03) | $(0.11) | | Shares used in computing non-GAAP basic/diluted net loss per share | 51,692,358 | 53,643,216 | Adjusted EBITDA Adjusted EBITDA loss improved to $1.9 million in Q1 2024, a substantial reduction from losses in prior year and quarter Adjusted EBITDA (Three Months Ended March 31, in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Adjusted EBITDA | $(1,856) | $(6,415) | | Adjusted EBITDA (Q4 2023) | N/A | $(10,300) | | Adjusted EBITDA assuming recognition of paused claims (Q1 2023) | N/A | $2,497 | Business Overview CareDx is a leading precision medicine company providing high-value healthcare solutions for transplant patients and caregivers - CareDx, Inc is a leading precision medicine solutions company focused on clinically differentiated, high-value healthcare solutions for transplant patients and caregivers[15] - The company offers testing services, products, and digital healthcare solutions along the pre- and post-transplant patient journey[15] - CareDx is the leading provider of genomics-based information for transplant patients[15] 2024 Financial Guidance The company raised its full-year 2024 revenue guidance to a range of $274 million to $282 million Full Year 2024 Revenue Guidance | Metric | Range | | :--- | :--- | | Full Year 2024 Revenue | $274 million to $282 million | Forward-Looking Statements Disclaimer The report contains forward-looking statements regarding financial guidance and strategy, which are subject to risks and uncertainties - The press release includes forward-looking statements concerning CareDx's 2024 revenue, strategic focus, and proposed path to profitability[28] - These statements are subject to numerous risks and uncertainties, including general economic and market factors, as detailed in SEC filings (Form 10-K for FY2023, Form 10-Q for Q1 2024)[28] - CareDx expressly disclaims any obligation to update or revise forward-looking statements, except as required by law[28] Contact Information This section provides contact details for media and investor relations inquiries - Media Relations Contact: Anna Czene, 818-731-2203, aczene@caredx.com[22] - Investor Relations Contact: Greg Chodaczek, investor@caredx.com[35]