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]

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]