CareDx, Inc. Q3 FY2024 earnings call

CareDx had strong Q3 with $82.9M revenue (+23% YOY), adjusted EBITDA $6.9M (above guide), $12.5M cash from ops, and strong balance sheet. Testing Services: Reorganized go-to-market, added 15 of 30 sales/marketing, 20 billing team members. CMS reaffirmed coverage, 10 centers established new kidney surveillance protocols. Patient and Digital Solutions: Migrated to SaaS, improved pricing, signed UC Health System for MedActionPlan. Lab Products: Driven by AlloSeq TX NGS kits, launched new software, Q-type solution, and partnership with Dovetail. Corporate: Added senior execs, Chris Caesar joined for market access, 2024 Investor Day laid out 3-year strategy, DOJ/SEC investigations closed, competitor dropped patent claims.

Testing Services: Delivered approximately 44,600 tests, up 16% YOY. Revenue of $60.8 million, up 27% YOY, representing ~73% of total revenue. Patient and Digital Solutions: Revenue of approximately $12 million, up 20% YOY, ~14.5% of total revenue. Lab Products: Revenue of $10.2 million, up 7% YOY, ~12.3% of total revenue.

Raised 2024 revenue guidance to $327M-$331M from $320M-$328M (17% YOY midpoint). 3-year CAGR ~15%, accelerating from low teens in 2025 to high teens in 2027. Excluding one-time revenue, 2025 growth high teens. Q4 guidance: Midpoint assumes Testing Services volume growth mid-teens, implied revenue growth 30% YOY, blended ASP ~$1,335 for Q4.

Forward-looking statements involve material risks (coverage, pricing, enrollment). Impact of Hurricane Milton on Q4 volumes. Variability in product gross margin due to production schedule.

Q: On Q4 guide, concerns about flat revenue.

A: Excluding prior-period items, Q4 revenue grows.

Q: Testing mix surveillance magnitude.

A: Modest shift, centers adopting protocols, 2-3 quarters for full recovery.

Q: Capital allocation.

A: Prioritize growth, then share buybacks.

Q: Palmetto GBA LCD timeline.

A: No specific timeline, future LCD to include updated literature.

Q: Hurricane Milton impact on Q4.

A: 1% volume impact, incorporated in guide.

Q: 30 new commercial heads.

A: Reinvestment in field sales/marketing, ~$10M incremental spend.

Q: Transplant procedures 2025.

A: Mid-single-digit secular growth, no catalysts for change.

Q: Surveillance opportunity framework.

A: Target first year post-transplant, interest in for-cause testing and future therapeutics.

Q: Retention and protocol implementation.

A: High retention, 10 centers implemented protocols since Sept, staffing up to support.