CareDx Reports Third Quarter 2024 Results and Raises Revenue Guidance

Nov 04, 2024 04:05 pm
BRISBANE, Calif. -- 

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]


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