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CareDx(CDNA) - 2025 Q2 - Earnings Call Transcript
2025-08-06 21:30
Financial Data and Key Metrics Changes - Adjusted revenue for Q2 2025 was $90.5 million, representing a 14% year-over-year increase [8][26] - Adjusted EBITDA was $9.1 million, compared to an adjusted loss of $0.3 million in the previous year [8][31] - Cash collections accelerated to 105% of adjusted testing services revenue, with payment per test increasing across all tests and payer classes [22] Business Line Data and Key Metrics Changes - Adjusted testing services revenue was $66 million, up 14% year-over-year, with approximately 49,500 tests delivered, marking an 8th consecutive quarter of sequential testing volume growth [9][28] - Patient and Digital Solutions revenue was approximately $12.8 million, representing a 19% growth compared to last year [23][28] - Lab products revenue was $11.8 million, up 12% year-over-year, driven by sales of AlloSeq Tx kits [25][28] Market Data and Key Metrics Changes - Kidney testing volume grew nearly 20% year-over-year, with over 60 surveillance protocols implemented nationally [10][12] - Heart and lung testing also saw growth, although lung represents a smaller proportion of overall volume [45] - The company added 4.2 million new covered lives for AlloMap Heart, becoming an in-network provider with a large commercial health plan covering 1.2 million lives [17] Company Strategy and Development Direction - The company launched AlloSure Plus, an AI-driven diagnostic for kidney transplant monitoring, aiming to enhance clinical decision-making [11] - CareDx is focusing on expanding its market access strategy and evidence generation to support its products [15] - The company is improving its enterprise infrastructure and business processes to ensure revenue growth outpaces operating expenses [21] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed the midpoint of 2025 revenue guidance, narrowing the range to $367 million to $373 million, with expectations of mid-teens growth in test volumes [8][32] - The draft LCD policy for molecular testing is viewed as a significant step forward, affirming coverage for surveillance testing [18] - Management expressed confidence in the operational excellence initiatives and the potential impact of the draft policy on future financial expectations [21][32] Other Important Information - Abhishek Jain announced his retirement as CFO, with Nathan Smith appointed as the new CFO [35][36] - The company is implementing Epic integration to enhance testing order processes and improve results delivery [21] Q&A Session Summary Question: Discussion on the LCD and potential headwinds - Management highlighted three focus areas for public comments: frequency testing, evidence supporting heart care, and bundled payments [40] Question: Data on heart and lung test volume growth - Heart and lung testing volumes grew, with continued positive trends in transplant volumes [45] Question: Changes to the long-range plan due to the draft LCD - No updates to the long-range plan will be provided until clarity on the final LCD is achieved [50] Question: Clarification on the $30 million headwind scenario - The $30 million headwind was calculated based on the attachment rate of heart care being over 90% [52] Question: Updated split on surveillance versus for-cause testing - There is a significant shift towards surveillance testing, but specific metrics are not being disclosed [56]