Results

CareDx Inc.

11/04/2024 | Press release | Distributed by Public on 11/04/2024 15:13

CareDx Reports Third Quarter 2024 Results and Raises Revenue Guidance

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

Third Quarter 2024 Financial Highlights

  • Total revenue of $82.9 million increased 23% year-over-year
  • Testing Services volume of 44,600 tests increased 16% year-over-year
  • GAAP net loss of $7.4 million, non-GAAP net income of $8.0 million, and positive adjusted EBITDA of $6.9 million, a significant improvement from the third quarter 2023
  • Cash flow from operations of $12.5 million. Cash, cash equivalents, and marketable securities of $241 million, with no debt
  • Raised annual revenue guidance to $327 to $331 million and adjusted EBITDA to a gain of $18 to $22 million

Business Highlights

  • CMS reaffirmed longstanding Medicare coverage for AlloSure® and AlloMap® Testing
  • Surveillance testing mix in kidney began to increase in the second half of September and continued through October
  • Hired industry veterans Keith Kennedy, Chief Operating Officer; Jessica Meng, Chief Commercial Officer; and Jing Huang, PhD, Chief Data and AI Officer
  • Announced the launch of the next generation of Assign software for AlloSeq™ Tx HLA typing and enhancements to QTYPE® rapid typing solution for deceased donor HLA typing
  • DOJ concluded its investigation into CareDx with no finding of wrongdoing

"CareDx had another strong quarter of topline growth and achieved positive adjusted EBITDA for the second consecutive quarter. We raised our annual guidance, and remain focused on ending the year strong," said John W. Hanna, CareDx President and CEO.

Third Quarter 2024 Financial Results

Total revenue for the three months ended September 30, 2024, was $82.9 million, an increase of 23% compared to $67.2 million for the third quarter of 2023. Testing Services revenue for the third quarter 2024 was $60.8 million, an increase of 27% compared to $47.8 million for the third quarter of 2023. Testing Services revenue included $1.2 million for tests performed in prior periods. Patient and Digital Solutions revenue for the third quarter of 2024 was $11.9 million, an increase of 20% compared to $9.9 million for the third quarter 2023. Product revenue for the third quarter of 2024 was $10.2 million, an increase of 7% compared to $9.5 million for the third quarter 2023.

For the third quarter of 2024 net loss was $7.4 million compared to a net loss of $23.5 million in the third quarter of 2023. Basic and diluted net loss per share in the third quarter of 2024 was $0.14, compared to basic and diluted net loss per share of $0.43 in the third quarter of 2023.

Non-GAAP net income was $8.0 million in the third quarter of 2024, compared to a non-GAAP net loss of $9.6 million in the third quarter of 2023. Diluted non-GAAP net income per share was $0.14 in the third quarter of 2024, compared to a diluted non-GAAP net loss per share of $0.18 in the third quarter of 2023.

Adjusted EBITDA income for the third quarter of 2024 was $6.9 million, compared to an adjusted EBITDA loss of $10.9 million for the third quarter of 2023.

2024 Guidance

CareDx now expects full year 2024 revenue to be in the range of $327 million to $331 million, compared to the prior guidance of $320 million to $328 million. CareDx now expects full year 2024 non-GAAP gross margin to be approximately 69%, compared to the prior range of 67% to 68%. CareDx now expects full year 2024 adjusted EBITDA gain to be in the range of $18 million to $22 million, compared to the prior guidance of an adjusted EBITDA gain of $9 million to $15 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, and non-GAAP gross margin and adjusted EBITDA. 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, the quarterly report on Form 10-Q for the quarter ended September 30, 2024 filed by CareDx with the SEC on November 4, 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 (income) 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 September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Revenue:

Testing services revenue

$

60,807

$

47,784

$

185,562

$

162,982

Product revenue

10,212

9,536

29,416

24,273

Patient and digital solutions revenue

11,864

9,872

32,228

27,500

Total revenue

82,883

67,192

247,206

214,755

Operating expenses:

Cost of testing services

13,447

13,217

41,387

43,837

Cost of product

6,212

4,750

17,801

12,742

Cost of patient and digital solutions

7,913

6,566

22,264

19,807

Research and development

17,486

19,000

55,875

63,590

Sales and marketing

19,802

18,474

60,634

63,335

General and administrative

28,515

33,968

83,104

91,327

Restructuring costs

-

-

68

848

Total operating expenses

93,375

95,975

281,133

295,486

Loss from operations

(10,492

)

(28,783

)

(33,927

)

(80,731

)

Other income:

Interest income, net

3,001

3,171

8,712

8,708

Change in estimated fair value of common stock warrant liability

-

-

-

10

Other income (expense), net

283

2,047

(107

)

(198

)

Total other income

3,284

5,218

8,605

8,520

Loss before income taxes

(7,208

)

(23,565

)

(25,322

)

(72,211

)

Income tax (expense) benefit

(200

)

80

(139

)

24

Net loss

$

(7,408

)

$

(23,485

)

$

(25,461

)

$

(72,187

)

Net loss per share:

Basic

$

(0.14

)

$

(0.43

)

$

(0.49

)

$

(1.34

)

Diluted

$

(0.14

)

$

(0.43

)

$

(0.49

)

$

(1.34

)

Weighted-average shares used to compute net loss per share:

Basic

52,903,338

54,178,759

52,266,106

53,891,374

Diluted

52,903,338

54,178,759

52,266,106

53,891,374

CareDx, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

September 30, 2024

December 31, 2023

Assets

Current assets:

Cash and cash equivalents

$

95,400

$

82,197

Marketable securities

145,453

153,221

Accounts receivable

66,627

51,061

Inventory

19,263

19,471

Prepaid and other current assets

7,344

7,763

Total current assets

334,087

313,713

Property and equipment, net

34,015

35,246

Operating leases right-of-use assets

25,823

29,891

Intangible assets, net

40,361

45,701

Goodwill

40,336

40,336

Restricted cash

592

586

Other assets

1,771

1,353

Total assets

$

476,985

$

466,826

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

6,239

$

12,872

Accrued compensation

29,915

19,703

Accrued and other liabilities

45,286

45,497

Total current liabilities

81,440

78,072

Deferred tax liability

202

136

Deferred payments for intangible assets

1,310

2,461

Operating lease liability, less current portion

23,841

28,278

Other liabilities

96,946

96,551

Total liabilities

203,739

205,498

Commitments and contingencies

Stockholders' equity:

Common stock

50

49

Additional paid-in capital

984,627

946,511

Accumulated other comprehensive loss

(7,179

)

(6,963

)

Accumulated deficit

(704,252

)

(678,269

)

Total stockholders' equity

273,246

261,328

Total liabilities and stockholders' equity

$

476,985

$

466,826

CareDx, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Cost of testing services reconciliation:

GAAP cost of testing services

$

13,447

$

13,217

$

41,387

$

43,837

Stock-based compensation expense

(418

)

(496

)

(1,232

)

(1,467

)

Acquisition related-amortization of purchased intangibles

(329

)

(329

)

(987

)

(987

)

Non-GAAP cost of testing services

$

12,700

$

12,392

$

39,168

$

41,383

Cost of product reconciliation:

GAAP cost of product

$

6,212

$

4,750

$

17,854

$

12,742

Stock-based compensation expense

(234

)

(301

)

(776

)

(935

)

Acquisition related-amortization of purchased intangibles

(419

)

(408

)

(1,250

)

(1,242

)

Restructuring costs

-

-

(53

)

-

Non-GAAP cost of product

$

5,559

$

4,041

$

15,775

$

10,565

Cost of patient and digital solutions reconciliation:

GAAP cost of patient and digital solutions

$

7,913

$

6,566

$

22,264

$

19,821

Stock-based compensation expense

(326

)

(297

)

(1,048

)

(1,066

)

Acquisition related-amortization of purchased intangibles

(170

)

(265

)

(679

)

(768

)

Restructuring costs

-

-

-

(14

)

Other income

-

-

5

-

Non-GAAP cost of patient and digital solutions

$

7,417

$

6,004

$

20,542

$

17,973

Research and development expenses reconciliation:

GAAP research and development expenses

$

17,486

$

19,000

$

55,890

$

63,835

Stock-based compensation expense

(1,775

)

(1,491

)

(5,163

)

(5,157

)

Restructuring costs

-

-

(15

)

(245

)

Other charges

-

-

(25

)

-

Non-GAAP research and development expenses

$

15,711

$

17,509

$

50,687

$

58,433

Sales and marketing expenses reconciliation:

GAAP sales and marketing expenses

$

19,802

$

18,474

$

60,634

$

63,883

Stock-based compensation expense

(2,786

)

(3,041

)

(8,757

)

(9,557

)

Acquisition related-amortization of purchased intangibles

(634

)

(616

)

(1,895

)

(1,817

)

Restructuring costs

-

-

-

(548

)

Other charges

-

-

(8

)

-

Non-GAAP sales and marketing expenses

$

16,382

$

14,817

$

49,974

$

51,961

General and administrative expenses reconciliation:

GAAP general and administrative expenses

$

28,515

$

33,968

$

83,104

$

91,368

Stock-based compensation expense

(8,155

)

(7,045

)

(23,232

)

(20,943

)

Change in estimated fair value of contingent consideration

(232

)

(1,243

)

(761

)

(1,731

)

Acquisition related fees and expenses

-

(253

)

(40

)

(537

)

Restructuring costs and charges

-

-

-

(41

)

Other (charges) income

-

(6

)

22

(64

)

Non-GAAP general and administrative expenses

$

20,128

$

25,421

$

59,093

$

68,052

Total other income (expense) reconciliation:

GAAP other income, net

$

3,284

$

5,218

$

8,605

$

8,520

Unrealized gain on long-term marketable equity securities

-

333

-

1,190

Asset impairments and write-downs

-

-

-

1,000

Other charges

-

(2,109

)

-

(2,081

)

Non-GAAP other income, net

$

3,284

$

3,442

$

8,605

$

8,629

Income tax (expense) benefit reconciliation:

GAAP income tax (expense) benefit

$

(200

)

$

80

$

(139

)

$

24

Tax effect related to amortization of purchased intangibles

(102

)

(98

)

(302

)

(299

)

Non-GAAP income tax expense

$

(302

)

$

(18

)

$

(441

)

$

(275

)

CareDx, Inc.

GAAP and Non-GAAP Operating Expenses

(Unaudited)

(In thousands)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

GAAP operating expenses:

Research and development

$

17,486

$

19,000

$

55,890

$

63,835

Sales and marketing

19,802

18,474

60,634

63,883

General and administrative

28,515

33,968

83,104

91,368

Total GAAP operating expenses

$

65,803

$

71,442

$

199,628

$

219,086

Non-GAAP operating expenses:

Research and development

$

15,711

$

17,509

$

50,687

$

58,433

Sales and marketing

16,382

14,817

49,974

51,961

General and administrative

20,128

25,421

59,093

68,052

Total Non-GAAP operating expenses

$

52,221

$

57,747

$

159,754

$

178,446

CareDx, Inc.

Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin

(Unaudited)

(In thousands, except percentages)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Total revenue

$

82,883

$

67,192

$

247,206

$

214,755

GAAP cost of sales

27,572

24,533

81,505

76,400

GAAP gross profit

55,311

42,659

165,701

138,355

Stock-based compensation expense

978

1,094

3,056

3,468

Other income

-

-

(5

)

-

Restructuring costs

-

-

53

14

Acquisition related-amortization of purchased intangibles

918

1,002

2,916

2,997

Non-GAAP gross profit

$

57,207

$

44,755

$

171,721

$

144,834

Non-GAAP gross margin %

69

%

67

%

69

%

67

%

CareDx, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(In thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

GAAP net loss

$

(7,408

)

$

(23,485

)

$

(25,461

)

$

(72,187

)

Stock-based compensation expense

13,694

12,671

40,208

39,125

Acquisition related-amortization of purchased intangibles

1,552

1,618

4,811

4,814

Change in estimated fair value of contingent consideration

232

1,243

761

1,731

Acquisition related fees and expenses

-

253

40

537

Other (gains) charges

-

(2,109

)

6

(2,081

)

Restructuring costs and charges

-

6

68

912

Tax effect related to amortization of purchased intangibles

(102

)

(98

)

(302

)

(299

)

Asset impairments and write-downs

-

-

-

1,000

Unrealized loss on long-term marketable equity securities

-

333

-

1,190

Non-GAAP net income (loss)

$

7,968

$

(9,568

)

$

20,131

$

(25,258

)

GAAP basic and diluted net loss per share

$

(0.14

)

$

(0.43

)

$

(0.49

)

$

(1.34

)

Non-GAAP basic net income (loss) per share

$

0.15

$

(0.18

)

$

0.39

$

(0.47

)

Non-GAAP diluted net income (loss) per share

$

0.14

$

(0.18

)

$

0.36

$

(0.47

)

Shares used in computing non-GAAP basic net income (loss) per share

52,903,338

54,178,759

52,266,106

53,891,374

Shares used in computing non-GAAP diluted net income (loss) per share

57,699,624

54,178,759

55,609,263

53,891,374

CareDx, Inc.

Reconciliation of Non-GAAP to Adjusted EBITDA

(Unaudited)

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Non-GAAP net income (loss)

$

7,968

$

(9,568

)

$

20,131

$

(25,258

)

Interest income

(3,001

)

(3,171

)

(8,712

)

(8,708

)

Income tax expense (benefit)

302

(214

)

441

275

Depreciation expense

1,919

2,044

6,024

5,904

Other (income) expense, net

(283

)

(40

)

107

79

Adjusted EBITDA

$

6,905

$

(10,949

)

$

17,991

$

(27,708

)

CareDx, Inc.

Media Relations
Anna Czene
818-731-2203
[email protected]

Investor Relations
Greg Chodaczek
[email protected]

Source: CareDx, Inc.