CareDx Reports Second Quarter 2024 Results and Increases Revenue Guidance

Rhea-AI Summary

CareDx (Nasdaq: CDNA) reported strong Q2 2024 results, with total revenue of $92.3 million, up 31% year-over-year. Testing Services volume grew 17% to 43,700 tests. The company achieved non-GAAP net income of $13.6 million and positive adjusted EBITDA of $12.9 million, a significant improvement from Q2 2023. CareDx generated $18.9 million in cash from operations and ended the quarter with $228.9 million in cash and no debt.

Key highlights include expanded coverage by 27 million lives nationwide and publication of studies validating their HeartCare® and AlloSure® Kidney products. CareDx raised its 2024 guidance, now expecting annual revenue of $320-$328 million and adjusted EBITDA of $9-$15 million. The company's focus on growth and serving transplant patients has driven performance across all business segments.

Positive

• Total revenue increased 31% year-over-year to $92.3 million
• Testing Services volume grew 17% to 43,700 tests
• Achieved non-GAAP net income of $13.6 million, compared to a loss in Q2 2023
• Positive adjusted EBITDA of $12.9 million, up from a loss in Q2 2023
• Generated $18.9 million cash from operations
• Raised 2024 revenue guidance to $320-$328 million
• Expanded coverage by 27 million lives nationwide in H1 2024
• Published studies validating HeartCare® and AlloSure® Kidney products

Negative

• Reported GAAP net loss of $1.4 million

Insights

Financial Analyst

CareDx's Q2 2024 results showcase a remarkable turnaround and strong financial performance. The company reported total revenue of $92.3 million, a substantial 31% year-over-year increase. This growth was driven by impressive gains across all business segments, particularly in Testing Services, which saw a 33% revenue increase.

The company's profitability metrics have significantly improved. While there's still a GAAP net loss of $1.4 million, it's a dramatic improvement from the $25 million loss in Q2 2023. More importantly, CareDx achieved non-GAAP net income of $13.6 million and positive adjusted EBITDA of $12.9 million, marking a pivotal shift towards profitability.

CareDx's financial position remains robust with $228.9 million in cash and equivalents and no debt, providing ample liquidity for future growth initiatives. The $18.9 million cash generated from operations is particularly encouraging, indicating strong underlying business fundamentals.

The raised guidance for 2024 is a clear vote of confidence from management. The new revenue projection of $320-$328 million represents a significant upgrade from the previous $274-$282 million range. Similarly, the shift from an expected adjusted EBITDA loss to a projected gain of $9-$15 million signals a faster-than-anticipated path to sustained profitability.

Overall, these results and the improved outlook suggest CareDx is successfully executing its growth strategy while simultaneously improving operational efficiency. The company's ability to expand its market reach, as evidenced by the additional 27 million lives covered, bodes well for continued growth in the transplant diagnostics market.

Medical Research Analyst

CareDx's Q2 2024 results underscore the company's strengthening position in the transplant diagnostics market. The 17% year-over-year increase in Testing Services volume to 43,700 tests demonstrates growing adoption of CareDx's diagnostic solutions among healthcare providers.

Two key scientific developments bolster CareDx's competitive edge:

• The SHORE study results, showing that HeartCare® outperforms dd-cfDNA alone in identifying allograft rejection, validate the company's multi-biomarker approach. This could lead to improved post-transplant care and potentially reduce the need for invasive biopsies.
• The Nature Medicine publication validating the AlloView™ AI-enabled risk prediction model and demonstrating AlloSure® Kidney's ability to detect subclinical rejection in stable patients is a significant advancement. This could revolutionize post-transplant monitoring by enabling earlier intervention and potentially improving long-term outcomes.

These scientific validations not only strengthen CareDx's market position but also pave the way for potential expansion of insurance coverage and adoption by transplant centers. The expansion of coverage by 27 million lives nationwide in the first half of 2024 is likely a direct result of this growing body of evidence supporting CareDx's diagnostic solutions.

Looking ahead, CareDx's focus on AI-enabled diagnostics and multi-biomarker approaches positions the company at the forefront of precision medicine in transplantation. This scientific leadership, coupled with expanding market reach, suggests strong potential for continued growth and market share gains in the transplant diagnostics sector.

BRISBANE, Calif.--(BUSINESS WIRE)-- CareDx, Inc. (Nasdaq: CDNA) – today announced financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Financial Highlights

• Reported total revenue of $92.3 million, an increase of 31% year-over-year.
• Grew Testing Services volume to 43,700 tests, an increase of 17% year-over-year.
• Reported GAAP net loss of $1.4 million, non-GAAP net income of $13.6 million, and positive adjusted EBITDA of $12.9 million, a significant improvement from the second quarter 2023.
• Generated $18.9 million cash from operations. Ended the quarter with cash, cash equivalents, and marketable securities of approximately $228.9 million, with no debt.
• Raised 2024 guidance for annual revenue to $320 to $328 million and adjusted EBITDA to a gain of $9 to $15 million.

Business Highlights

• In the first half of 2024, expanded coverage by 27 million lives nationwide.
• Published SHORE study data demonstrating that HeartCare® outperforms dd-cfDNA alone in identifying allograft rejection.​
• Nature Medicine publication validates CareDx AlloView™ AI-enabled risk prediction model and demonstrates AlloSure® Kidney detects subclinical rejection in stable patients​.

"We are pleased to announce another strong quarter, marked by growth across all our businesses. The hard work of our team and their dedication to serving transplant patients over the past year have been instrumental in our performance. As we approach the second half of the year, we remain focused on driving growth," said John W. Hanna, CareDx President and CEO.

Second Quarter 2024 Financial Results

Total revenue for the three months ended June 30, 2024, was $92.3 million, an increase of 31% compared to $70.3 million for the second quarter of 2023. Testing Services revenue for the second quarter 2024 was $70.9 million, an increase of 33% compared to $53.4 million for the second quarter of 2023. Testing Services revenue for the second quarter 2024 included $13.2 million for tests performed in prior periods. Patient and Digital Solutions revenue for the second quarter of 2024 was $10.7 million, an increase of 19% compared to $9.0 million for the second quarter 2023. Product revenue for the second quarter of 2024 was $10.6 million, an increase of 35% compared to $7.9 million for the second quarter 2023.

For the second quarter of 2024 net loss was $1.4 million compared to a net loss of $25.0 million in the second quarter of 2023. Basic and diluted net loss per share in the second quarter of 2024 was $0.03, compared to basic and diluted net loss per share of $0.46 in the second quarter of 2023.

Non-GAAP net income was $13.6 million in the second quarter of 2024, compared to a non-GAAP net loss of $9.9 million in the second quarter of 2023. Diluted non-GAAP net income per share was $0.25 in the second quarter of 2024, compared to a diluted non-GAAP net loss per share of $0.18 in the second quarter of 2023.

Adjusted EBITDA income for the second quarter of 2024 was $12.9 million, compared to an adjusted EBITDA loss of $10.4 million for the second quarter of 2023.

2024 Guidance

CareDx now expects full year 2024 revenue to be in the range of $320 million to $328 million, compared to the prior range of $274 million to $282 million. CareDx now expects full year 2024 non-GAAP gross margin to be in the range of 67% to 68%, compared to the prior range of 63% to 65%. CareDx now expects full year 2024 adjusted EBITDA gain to be in the range of $9 million to $15 million, compared to an adjusted EBITDA loss of $14 million to $24 million.

About CareDx – The Transplant Company™

CareDx, Inc., headquartered in Brisbane, California, is a leading precision medicine solutions company focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. CareDx offers testing services, products, and digital healthcare solutions along the pre- and post-transplant patient journey and is the leading provider of genomics-based information for transplant patients. For more information, please visit: www.CareDx.com.

Forward Looking Statements

This press release includes forward-looking statements, including expectations regarding CareDx’s 2024 revenue, non-GAAP gross margin and adjusted EBITDA, CareDx’s focus in 2024 and CareDx’s proposed path to profitability. These forward-looking statements are based upon information that is currently available to CareDx and its current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, all of which are difficult to predict and many of which are beyond our control, including general economic and market factors, among others discussed in CareDx’s filings with the Securities and Exchange Commission (the “SEC”), including, but not limited to, the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed by CareDx with the SEC on February 28, 2024, the quarterly report on Form 10-Q for the quarter ended March 31, 2024 filed by CareDx with the SEC on May 9, 2024, the quarterly report on Form 10-Q for the quarter ended June 30, 2024 filed by CareDx with the SEC on July 31, 2024 and other reports that CareDx has filed with the SEC. Any of these may cause CareDx’s actual results, performance, or achievements to differ materially and adversely from those anticipated or implied by CareDx’s forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. CareDx expressly disclaims any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

CareDx has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and also on a non-GAAP basis, including non-GAAP cost of testing services, non-GAAP cost of product, non-GAAP cost of patient and digital solutions, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP other income, net, non-GAAP income tax expense, non-GAAP gross profit, non-GAAP gross margin (%), non-GAAP net income (loss), non-GAAP basic and diluted net income (loss) per share, adjusted EBITDA and non-GAAP operating expenses.

We define non-GAAP net income (loss) and per share results as the GAAP net loss and per share results excluding the impacts of stock-based compensation; changes in estimated fair value of contingent consideration; acquisition-related impairment charges and amortization of purchased intangible assets and related tax effects; costs involved with completing an acquisition; unrealized loss on investments; restructuring charges and certain other charges.

We define adjusted EBITDA as non-GAAP net income (loss) before interest income, income tax expense (benefit), depreciation and other expense, net.

We are presenting these non-GAAP financial measures to assist investors in assessing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods. Management believes this non-GAAP information is useful for investors, when considered in conjunction with CareDx’s GAAP financial statements, because management uses such information internally for its operating, budgeting, and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of CareDx’s operating results as reported under GAAP. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not necessarily comparable to similarly titled measures presented by other companies. A reconciliation between GAAP and non-GAAP financial information is provided immediately following the financial tables.

CareDx, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenue:
Testing services revenue	$	70,918			$	53,414			$	124,755			$	115,198
Product revenue		10,610				7,876				19,204				14,737
Patient and digital solutions revenue		10,746				9,011				20,364				17,628
Total revenue		92,274				70,301				164,323				147,563
Operating expenses:
Cost of testing services		14,308				15,324				27,940				30,620
Cost of product		6,245				3,926				11,589				7,992
Cost of patient and digital solutions		7,393				6,637				14,351				13,241
Research and development		19,678				20,233				38,389				44,590
Sales and marketing		21,002				21,630				40,832				44,861
General and administrative		27,678				29,327				54,589				57,359
Restructuring costs		68				848				68				848
Total operating expenses		96,372				97,925				187,758				199,511
Loss from operations		(4,098	)			(27,624	)			(23,435	)			(51,948	)
Other income:
Interest income, net		2,826				2,871				5,711				5,537
Change in estimated fair value of common stock warrant liability		—				3				—				10
Other expense, net		(100	)			(271	)			(390	)			(2,245	)
Total other income		2,726				2,603				5,321				3,302
Loss before income taxes		(1,372	)			(25,021	)			(18,114	)			(48,646	)
Income tax (expense) benefit		(22	)			68				61				(56	)
Net loss	$	(1,394	)		$	(24,953	)		$	(18,053	)		$	(48,702	)
Net loss per share:
Basic	$	(0.03	)		$	(0.46	)		$	(0.35	)		$	(0.91	)
Diluted	$	(0.03	)		$	(0.46	)		$	(0.35	)		$	(0.91	)
Weighted-average shares used to compute net loss per share:
Basic		52,195,620				53,846,260				51,943,989				53,745,299
Diluted		52,195,620				53,846,260				51,943,989				53,745,299

CareDx, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands)
	June 30, 2024				December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	95,782			$	82,197
Marketable securities		133,089				153,221
Accounts receivable		66,161				51,061
Inventory		19,234				19,471
Prepaid and other current assets		6,343				7,763
Total current assets		320,609				313,713
Property and equipment, net		34,202				35,246
Operating leases right-of-use assets		27,188				29,891
Intangible assets, net		41,896				45,701
Goodwill		40,336				40,336
Restricted cash		588				586
Other assets		1,958				1,353
Total assets	$	466,777			$	466,826
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,874			$	12,872
Accrued compensation		25,004				19,703
Accrued and other liabilities		47,453				45,497
Total current liabilities		78,331				78,072
Deferred tax liability		50				136
Deferred payments for intangible assets		1,620				2,461
Operating lease liability, less current portion		25,386				28,278
Other liabilities		96,721				96,551
Total liabilities		202,108				205,498
Commitments and contingencies
Stockholders’ equity:
Common stock		50				49
Additional paid-in capital		969,427				946,511
Accumulated other comprehensive loss		(7,964	)			(6,963	)
Accumulated deficit		(696,844	)			(678,269	)
Total stockholders’ equity		264,669				261,328
Total liabilities and stockholders’ equity	$	466,777			$	466,826

CareDx, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (In thousands)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Cost of testing services reconciliation:
GAAP cost of testing services	$	14,308			$	15,324			$	27,940			$	30,620
Stock-based compensation expense		(357	)			(492	)			(814	)			(971	)
Acquisition related-amortization of purchased intangibles		(329	)			(329	)			(658	)			(658	)
Non-GAAP cost of testing services	$	13,622			$	14,503			$	26,468			$	28,991
Cost of product reconciliation:
GAAP cost of product	$	6,298			$	3,926			$	11,642			$	7,992
Stock-based compensation expense		(225	)			(274	)			(542	)			(634	)
Acquisition related-amortization of purchased intangibles		(411	)			(416	)			(831	)			(834	)
Restructuring costs		(53	)			—				(53	)			—
Non-GAAP cost of product	$	5,609			$	3,236			$	10,216			$	6,524
Cost of patient and digital solutions reconciliation:
GAAP cost of patient and digital solutions	$	7,393			$	6,651			$	14,351			$	13,255
Stock-based compensation expense		(350	)			(367	)			(722	)			(769	)
Acquisition related-amortization of purchased intangibles		(238	)			(255	)			(509	)			(503	)
Restructuring costs		—				(14	)			—				(14	)
Other income		—				—				5				—
Non-GAAP cost of patient and digital solutions	$	6,805			$	6,015			$	13,125			$	11,969
Research and development expenses reconciliation:
GAAP research and development expenses	$	19,693			$	20,478			$	38,404			$	44,835
Stock-based compensation expense		(1,628	)			(1,704	)			(3,388	)			(3,666	)
Restructuring costs		(15	)			(245	)			(15	)			(245	)
Other charges		—				—				(25	)			—
Non-GAAP research and development expenses	$	18,050			$	18,529			$	34,976			$	40,924
Sales and marketing expenses reconciliation:
GAAP sales and marketing expenses	$	21,002			$	22,178			$	40,832			$	45,409
Stock-based compensation expense		(2,927	)			(2,779	)			(5,971	)			(6,516	)
Acquisition related-amortization of purchased intangibles		(628	)			(606	)			(1,261	)			(1,201	)
Restructuring costs		—				(548	)			—				(548	)
Other charges		—				—				(8	)			—
Non-GAAP sales and marketing expenses	$	17,447			$	18,245			$	33,592			$	37,144
General and administrative expenses reconciliation:
GAAP general and administrative expenses	$	27,678			$	29,368			$	54,589			$	57,400
Stock-based compensation expense		(7,683	)			(7,084	)			(15,077	)			(13,898	)
Change in estimated fair value of contingent consideration		(210	)			(67	)			(529	)			(488	)
Acquisition related fees and expenses		(5	)			—				(40	)			(284	)
Restructuring costs and charges		—				(41	)			—				(99	)
Other (charges) income		(44	)			—				22				—
Non-GAAP general and administrative expenses	$	19,736			$	22,176			$	38,965			$	42,631
Total other income (expense) reconciliation:
GAAP other income, net	$	2,726			$	2,603			$	5,321			$	3,302
Unrealized (gain) loss on long-term marketable equity securities		—				(53	)			—				857
Asset impairments and write-downs		—				—				—				1,000
Other charges		—				7				—				28
Non-GAAP other income, net	$	2,726			$	2,557			$	5,321			$	5,187
Income tax (expense) benefit reconciliation:
GAAP income tax (expense) benefit	$	(22	)		$	68			$	61			$	(56	)
Tax effect related to amortization of purchased intangibles		(98	)			(100	)			(200	)			(201	)
Non-GAAP income tax expense	$	(120	)		$	(32	)		$	(139	)		$	(257	)

CareDx, Inc. GAAP and Non-GAAP Operating Expenses (Unaudited) (In thousands)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
GAAP operating expenses:
Research and development	$	19,693			$	20,478			$	38,404			$	44,835
Sales and marketing		21,002				22,178				40,832				45,409
General and administrative		27,678				29,368				54,589				57,400
Total GAAP operating expenses	$	68,373			$	72,024			$	133,825			$	147,644
Non-GAAP operating expenses:
Research and development	$	18,050			$	18,529			$	34,976			$	40,924
Sales and marketing		17,447				18,245				33,592				37,144
General and administrative		19,736				22,176				38,965				42,631
Total Non-GAAP operating expenses	$	55,233			$	58,950			$	107,533			$	120,699

CareDx, Inc. Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin (Unaudited) (In thousands, except percentages)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Total revenue	$	92,274			$	70,301			$	164,323			$	147,563
GAAP cost of sales		27,999				25,901				53,933				51,867
GAAP gross profit		64,275				44,400				110,390				95,696
Stock-based compensation expense		932				1,133				2,078				2,374
Other income		—				—				(5	)			—
Restructuring costs		53				14				53				14
Acquisition related-amortization of purchased intangibles		978				1,000				1,998				1,995
Non-GAAP gross profit	$	66,238			$	46,547			$	114,514			$	100,079
Non-GAAP gross margin %		72	%			66	%			70	%			68	%

CareDx, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
GAAP net loss	$	(1,394	)		$	(24,953	)		$	(18,053	)		$	(48,702	)
Stock-based compensation expense		13,170				12,700				26,514				26,454
Acquisition related-amortization of purchased intangibles		1,606				1,606				3,259				3,196
Change in estimated fair value of contingent consideration		210				67				529				488
Acquisition related fees and expenses		5				—				40				284
Other charges		44				7				6				28
Restructuring costs and charges		68				848				68				906
Tax effect related to amortization of purchased intangibles		(98	)			(100	)			(200	)			(201	)
Asset impairments and write-downs		—				—				—				1,000
Unrealized (gain) loss on long-term marketable equity securities		—				(53	)			—				857
Non-GAAP net income (loss)	$	13,611			$	(9,878	)		$	12,163			$	(15,690	)
GAAP basic and diluted net loss per share	$	(0.03	)		$	(0.46	)		$	(0.35	)		$	(0.91	)
Non-GAAP basic net income (loss) per share	$	0.26			$	(0.18	)		$	0.23			$	(0.29	)
Non-GAAP diluted net income (loss) per share	$	0.25			$	(0.18	)		$	0.23			$	(0.29	)
Shares used in computing non-GAAP basic net income (loss) per share		52,195,620				53,846,260				51,943,989				53,745,299
Shares used in computing non-GAAP diluted net income (loss) per share		54,333,731				53,846,260				53,669,762				53,745,299

CareDx, Inc. Reconciliation of Non-GAAP to Adjusted EBITDA (Unaudited) (In thousands)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Non-GAAP net income (loss)	$	13,611			$	(9,878	)		$	12,163			$	(15,690	)
Interest income		(2,826	)			(2,871	)			(5,711	)			(5,537	)
Income tax expense (benefit)		121				68				139				(56	)
Depreciation expense		1,937				2,052				4,105				3,860
Other expense, net		100				279				390				664
Adjusted EBITDA	$	12,943			$	(10,350	)		$	11,086			$	(16,759	)

 

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CareDx, Inc.

Media Relations

Anna Czene

818-731-2203

aczene@caredx.com

Investor Relations

Greg Chodaczek

investor@caredx.com

Source: CareDx, Inc.

FAQ

What was CareDx's (CDNA) revenue for Q2 2024?

CareDx reported total revenue of $92.3 million for Q2 2024, representing a 31% increase year-over-year.

How many tests did CareDx (CDNA) perform in Q2 2024?

CareDx's Testing Services volume grew to 43,700 tests in Q2 2024, an increase of 17% compared to the same period last year.

What is CareDx's (CDNA) updated revenue guidance for 2024?

CareDx raised its 2024 revenue guidance to a range of $320 million to $328 million, up from the previous range of $274 million to $282 million.

Did CareDx (CDNA) achieve profitability in Q2 2024?

While CareDx reported a GAAP net loss of $1.4 million, it achieved non-GAAP net income of $13.6 million and positive adjusted EBITDA of $12.9 million in Q2 2024.