CareDx, Inc Q2 FY2025 earnings call

• At the World Transplant Congress (WTC), unveiled evolved brand identity, had over 40 abstracts and 16 oral presentations on kidney, heart, lung and liver. - In Testing Services, kidney testing volume grew nearly 20% YOY, launched AlloSure Plus at WTC; strong reception for expanded indication of AlloSure Heart for pediatric patients; data on AlloSure Lung showed power of precision monitoring. - In Evidence Generation, announced milestone with first manuscript of KOAR study published; made progress in market access strategy. - In Operational Excellence, made progress with EPIC instance launch, implemented 100% of RCM workflows, saw improvements in RCM KPIs. - In Patient & Digital Solutions, released update to quality reporting software XynQAPI with positive feedback.

Testing Services: Adjusted Testing Services revenue was $66 million for the second quarter, up 14% year-over-year. Delivered approximately 49,500 tests, up 13% from prior year. Patient & Digital Solutions: Reported revenue of approximately $12.8 million, representing 19% growth compared to last year. Lab Products: Revenue of $11.8 million was up 12% year-over-year, driven by sales of AlloSeq Tx.

• Reaffirming midpoint of 2025 revenue guidance, narrowing range to $367 million to $373 million. - Continue to expect adjusted EBITDA of $29 million to $33 million. - Anticipate test volumes to grow mid-teens YOY, sequential growth of 2%-3% in Q3 and 5%-6% in Q4 2025. - Expect full year ASP of approximately $1,360 per test. - Patient & Digital solutions to grow in low 20s, Lab Products revenue to grow in mid-teens. - Expect full year non-GAAP gross margin to be approximately 70% and operating expenses to be approximately $235 million.

• Potential impact of draft LCD policy with two scenarios modeled: Scenario 1 with bundled payments and frequency limits could have approx $15 million headwind; Scenario 2 without bundled payments and with only one molecular test per date of service could have approx $30 million headwind.

Q: One from Lauren around the LCD, what is the scenario or topics of discussion that you want to bring forward into the public forum?

A: Focus on three topics - frequency of testing, evidence supporting HeartCare as a product that improves heart transplant patient care and need for multimodality testing, and newly introduced concept of bundled payments, and will publish comment letter on website when comment period ends.

Q: From Brandon around kidney test volume growth, data on Heart and Lung, and EPIC launch complexity?

A: Heart and lung both grew well on the quarter; EPIC pilot program with 4 centers to go live in Q3, by end of year expect 10% of volume, plan to roll out to 50% adherence by end of next year.

Q: From Vivian on change to LRPs as a result of draft LCD and $30 million headwind assumption?

A: Not providing update to LRP until greater clarity on final LCD; $30 million headwind assumption based on attachment rate of HeartCare upwards of 90% potentially going away if second scenario fruitions.

Q: From Vivian on updated split of kidney surveillance vs cause?

A: Haven't split that out, but shifting toward surveillance over for cause testing due to clarity from draft policy retraction driving behavior change in the market