CareDx (NasdaqGM:CDNA) FY Conference November 20, 2025 09:00 AM ET Company ParticipantsKeith Kennedy - COOJohn Hanna - CEOConference Call ParticipantsMason Carrico - Research AnalystMason CarricoWelcome, everyone, to day three of the Stephens Conference. I'm Mason Carrico. I'm the med tech and diagnostics analyst here. Excited to have CareDx with us today. We've got John Hanna, CEO, and Keith Kennedy, COO. Thank you, guys, for making it.John HannaThanks for having us, Mason. We really appreciate it.Keith Ke ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $100.1 million, representing a 21% year-over-year increase [8][26] - Adjusted EBITDA reached $15.3 million, more than double compared to Q3 last year [9][28] - Cash collections in Q3 were exceptional, reaching 124% of testing services revenue [21][28] - The company raised its 2025 revenue guidance to $372-$376 million and adjusted EBITDA guidance to $35-$39 million [9][29] Business Line Data and Key Metrics Changes - Testing services revenue was $72.2 million, a 19% increase year-over-year, with approximately 50,300 tests delivered, up 13% [9][27] - Patient and digital solutions revenue was approximately $15.4 million, reflecting a 30% growth compared to last year [21][27] - Lab products revenue reached $12.5 million, up 22% year-over-year, driven by NGS transplant test kits and PCR-based rapid HLA typing kits [22][27] Market Data and Key Metrics Changes - The company noted that transplant volumes across all three solid organs remained relatively flat year-over-year, with a slight increase of about 1% [41] - Kidney transplant volumes did not accelerate as anticipated, attributed to media scrutiny affecting transplant practices [42] Company Strategy and Development Direction - The company is focused on solution selling, aiming to provide end-to-end care for transplant patients through innovative diagnostics and digital tools [5][6] - Recent appointments to the Board of Directors and executive team are expected to enhance the company's strategic direction and customer engagement [6][7] - The launch of HistoMap Kidney is part of the strategy to bridge diagnostics and patient outcomes, addressing unmet needs in transplant care [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth strategy, emphasizing the importance of patient-centric solutions [5][25] - The company anticipates continued growth in kidney transplant numbers over the next two to three years, despite current market challenges [42] - Management highlighted the transformative impact of revenue cycle management initiatives on cash collections and operational efficiency [20][28] Other Important Information - The company achieved a gross profit margin of 70.9%, an increase of 190 basis points [28] - The company has no debt and closed the quarter with $194.2 million in cash and cash equivalents [28] Q&A Session Summary Question: How should we think about the durability of ASPs moving forward? - Management indicated that strong cash collections on historical claims will increase base ASP, with a 5% increase observed over the last six months [33] Question: What are the expectations for Epic Aura integrations? - The company anticipates going live with about 40 centers in 2026, expecting a 10% uplift in volume post-integration [34][35] Question: Were there any prior period collections in the quarter? - Yes, approximately $5.9 million in cash collections exceeded historical claims [36] Question: What are the overall trends in transplant volume? - Management noted that transplant volumes have remained flat year-over-year, with expectations for growth in kidney transplants over the next few years [41][42] Question: Can you provide insight into the delta in patient testing frequency at centers with protocols? - Since the reinitiation of kidney surveillance protocols, growth in kidney volume has been nearly 20% year-over-year [49]

Q3 2025 Financial Results N O V E M B E R 4 , 2 0 2 5 Safe Harbor Statement These slides and the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this presentation, including statements regarding the future financial position of CareDx®, Inc. (together with its subsidiaries, "Care ...

Financial Data and Key Metrics Changes - The company reported solid test volume growth in Q2, with low double digits overall and kidney testing up almost 20% [5][41] - The revenue guidance for the full year was tightened, with a midpoint of $370 million, reflecting confidence in growth despite a $5 million write-off in the first half [41][42] - The average selling price (ASP) is projected to increase to $1,400 by the end of the year, representing a 7% increase [31] Business Line Data and Key Metrics Changes - The digital solutions segment, which accounts for about 15% of revenue, has grown at a CAGR of 20% to 30% over the last three years, driven by the adoption of multiple services by transplant centers [43] - The company has successfully implemented surveillance protocols in 60 transplant centers, with significant room for growth as there are over 200 kidney transplant programs in the U.S. [9][15] Market Data and Key Metrics Changes - The company is in two-thirds of all transplant centers in the U.S., indicating a broad market presence [47] - The market access team has made significant progress in transitioning contracts to a new CPT code, which is expected to enhance revenue predictability and speed up payment processes [49][50] Company Strategy and Development Direction - The company is focused on solutions-based selling, offering a comprehensive portfolio of services to transplant centers, which has driven significant adoption of its products [6][7] - There is an ongoing strategy to convert digital solutions into a SaaS model, enhancing operational efficiency for transplant centers [47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the early stages of market adoption for their services and the positive impact of recent policy changes regarding surveillance testing coverage [3][57] - The company anticipates continued growth in kidney testing volume as more data from clinical studies supports the utility of their services [9][16] Other Important Information - The KOR study publication demonstrated that patients monitored with surveillance testing were six times more likely to detect rejection when undergoing a biopsy, reinforcing the importance of their testing services [39][40] - The company has a strong balance sheet with no debt and close to $200 million in cash, allowing for continued investment in growth initiatives [54] Q&A Session Summary Question: What are the greatest opportunities for CareDx? - Management highlighted the early stages of market adoption for their services and the importance of their role in patient care for organ transplant recipients [3] Question: How much more room is there for additional centers to adopt surveillance protocols? - There are over 200 kidney transplant programs in the U.S., with 60 currently having adopted protocols, indicating significant growth potential [9][15] Question: What impact do you expect from the new Epic system? - The company aims to have 50% of its volume coming through the Epic system by the end of next year, with expectations of increased operational efficiency [18][21] Question: Can you discuss the revenue cycle management program? - Management noted that improvements in revenue cycle management are expected to yield significant benefits over the next two years, with a focus on automation and workflow efficiency [25][28] Question: What is the status of the draft LCD and its potential impact? - The company has advocated for clearer policies on surveillance testing coverage, which could have a significant financial impact depending on the final policy outcome [32][34] Question: What is the company's capital allocation strategy? - The company has been active in buybacks and continues to invest in growth opportunities, particularly in expanding its commercial team and operational infrastructure [54][56]

Business Overview - CareDx is focused on a $6B+ market opportunity in transplant care[20, 29] - The company's mission is to improve long-term outcomes by providing innovative solutions throughout the entire transplant patient journey[19] - Over 70% of organ transplant centers use one or more of CareDx's digital patient journey solutions[63] Financial Performance - Full year 2023 revenue reached $280.3M, exceeding the high end of updated guidance[77] - Testing Services revenue for 2023 was $209.7M with approximately 165,700 patient results[77] - Patient and Digital Solutions revenue grew by 29% year-over-year to $37.1M in 2023[77] - Product revenue increased by 15% year-over-year to $33.5M in 2023[77] - The company repurchased 2.9 million shares for $27.5 million in 2023[77] - CareDx ended 2023 with approximately $235.4M in cash and marketable securities and no debt[77] Future Outlook - 2024 revenue guidance is set at $260M to $274M[101] - Non-GAAP operating expenses are projected to be between $207M and $215M in 2024[101]

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]

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]