Q4 2025 CareDx Inc Earnings Call

February 24, 2026

Speaker #2: Hello everyone Thank you for joining us , and welcome to the CareDx, Inc. Q4 2025 Financial Results Call . After today's prepared remarks , we will host a question and answer session If you would like to ask a question , please press star one on your telephone keypad to withdraw your question , press star one .

Operator: Hello, everyone. Thank you for joining us, and welcome to the CareDx Q4 2025 financial results Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Caroline Corner, Investor Relations. Please go ahead.

Speaker #2: Again , I will now hand the call over to Caroline Corner Investor Relations Please go ahead . Thank you . Operator .

Caroline Corner: Thank you, operator. Good afternoon. Thank you for joining us today. Earlier today, CareDx released financial results for Q4 and full year 2025, ending 31 December 2025. These results are currently available on the company's website at www.caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, Keith Kennedy, Chief Operating Officer, and Nathan Smith, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements. Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements. All forward-looking statements are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements.

Speaker #3: Good afternoon . Thank you for joining us today today , Cardiacs released financial results for the fourth quarter and full year 2025 ending December 31st , 2025 .

Speaker #3: These results are currently available on the company's website at Joining me on today's call are John Hanna President and Chief Executive Officer Keith Kennedy , chief operating officer .

Speaker #3: And Nathan Smith chief financial officer Before we get started , I would like to remind everyone that management will be making statements during this call that include forward looking statements Any statements contained in this call that are not statements of historical fact should be deemed to be forward looking statements .

Speaker #3: All forward-looking statements are based upon current estimates and various assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements.

Speaker #3: Accordingly , you should not place undue reliance on these statements Information concerning the risks , uncertainties and other factors that could cause results to differ from these forward looking statements is included in our filings with the Securities and Exchange Commission .

Caroline Corner: Accordingly, you should not place undue reliance on these statements. Information concerning the risks, uncertainties, and other factors that could cause results to differ from these forward-looking statements is included in our filings with the Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, 24 February 2026. We disclaim any intention or obligation, except as required by law, to update or revise any information, financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute, or in isolation from, GAAP measures. Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures may be found in today's earnings release, which is posted on our website.

Speaker #3: The information provided in this conference call speaks only to the live broadcast today , February 24th , 2026 . We disclaim any intention or obligation as required by law , to update or revise any information , financial projections or other forward looking statements , whether because of new information , future events or otherwise .

Speaker #3: This call will also include a discussion of certain non-GAAP financial measures . These non-GAAP financial measures should be considered . In addition to not as a substitute or an isolation from GAAP measures .

Speaker #3: Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures may be found in today's earnings release , which is posted on our website .

Speaker #3: With that , I will now turn the call over to John

Caroline Corner: With that, I will now turn the call over to John.

Speaker #4: Thank you . Caroline , and welcome to everyone joining today's call , 2025 was a transformative year for Cadex . We advanced our market leadership across heart , lung and kidney transplantation with an expanded commercial footprint , including a broader sales and medical presence to execute our solution selling strategy that drove growth across all business segments We launched new products to further differentiate our offerings , such as Alasehir Heart for Pediatrics to service the entire heart transplant market , Alasehir plus our AI derived model for kidney transplant risk assessment and histo kidney .

John Hanna: Welcome to everyone joining today's call. 2025 was a transformative year for CareDx. We advanced our market leadership across heart, lung, and kidney transplantation with an expanded commercial footprint, including a broader sales and medical presence to execute our solution selling strategy that drove growth across all business segments. We launched new products to further differentiate our offerings, such as AlloSure Heart for Pediatrics, to service the entire heart transplant market, AlloSure Plus, our AI-derived model for kidney transplant risk assessment, and HistoMap Kidney, our first tissue-based gene expression classifier for identifying rejection subtype. We generated meaningful evidence to further build clinical belief in our molecular testing solutions, including multiple published manuscripts from the large prospective SURE and KOAR registries in heart and kidney transplantation, respectively.

Speaker #4: Our first tissue based gene expression classifier for identifying rejection subtype . We generated meaningful evidence to further build clinical belief in our molecular testing solutions , including multiple published manuscripts from the large prospective sure and core registries in heart and kidney transplantation , respectively At the same time , we invested in critical infrastructure , including significantly advancing our revenue cycle management function through automation and AI deployment , and launching epic Ora , designed to improve our customers experience with test ordering and reporting .

John Hanna: At the same time, we invested in critical infrastructure, including significantly advancing our revenue cycle management function through automation and AI deployment and launching Epic Aura, designed to improve our customers' experience with test ordering and reporting by reducing sample holds and supporting faster, more reliable test processing. Our innovation strategy and disciplined execution have set us on a path to achieve the long-range plan we laid out in October 2024. I believe CareDx is well positioned for our next phase of innovation, scale, and sustained growth as a leading precision diagnostics company. In my prepared remarks today, I'm going to highlight some of our accomplishments from the Q4 and then detail our key growth drivers for 2026. I'll turn it over to Nathan to review the quarter and full year 2025 financial highlights and our full year 2026 financial guidance.

Speaker #4: By reducing sample holds and supporting faster , more reliable test processing . Our innovation strategy and disciplined execution have set us on a path to achieve the long range plan we laid out in October 2024 .

Speaker #4: I believe Cadex is well positioned for our next phase of innovation scale and sustained growth . As a leading precision diagnostics company . In my prepared remarks today , I am going to highlight some of our accomplishments from the fourth quarter and then detail our key growth drivers for 2026 .

Speaker #4: Then I'll turn it over to Nathan to review the quarter and full year 2025 financial highlights and our full year 2020 financial guidance Briefly , our fourth quarter financial performance was strong .

John Hanna: Briefly, our Q4 financial performance was strong. We delivered revenue of $108 million, representing 25% year-over-year growth. Testing volume accelerated to 17% growth year-over-year. We maintained a 69% non-GAAP gross margin and generated positive adjusted EBITDA of $7 million in the quarter. We continue to be disciplined in our capital allocation and maintain a strong balance sheet. In Q1, we returned capital to shareholders through an additional $12 million of share repurchases. In total, in 2025, we have repurchased approximately 9% of our outstanding shares. We ended the quarter with approximately $200 million in cash equivalents, and marketable securities, and no debt, providing significant financial flexibility. Overall, I believe our results reflect disciplined execution, improving cash generation, and a solid foundation as we continue to execute our growth strategy.

Speaker #4: We delivered revenue of 108 million , representing 25% year over year growth Testing volume accelerated to 17% growth year over year . We maintained a 69% non-GAAP gross margin and generated positive adjusted EBITDA of 7 million in the quarter .

Speaker #4: We continue to be disciplined in our capital allocation and maintain a strong balance sheet . In the first quarter , we returned capital to shareholders through an additional 12 million of share repurchases in total in 2025 , we have repurchased approximately 9% of our outstanding shares .

Speaker #4: We ended the quarter with approximately 200 million in cash . Cash equivalents and marketable securities , and no debt , providing significant financial flexibility Overall , I believe our results reflect disciplined execution , improving cash generation , and a solid foundation as we continue to execute our growth strategy Now on to the business highlights Testing services growth was strong across all three organs heart , lung and kidney .

John Hanna: Now on to the business highlights. Testing services growth was strong across all three organs: heart, lung, and kidney. Revenue was $78 million for Q4, an increase of 23% year-over-year. We delivered approximately 53,000 tests in Q4, up 17% from the prior year. Kidney testing continued to lead our growth, supported by both increased surveillance protocol adoption and expanded for-cause use of AlloSure Kidney at transplant centers. Generally, when a center initiates a surveillance testing protocol, they will start newly transplanted patients on that testing schedule. As centers restarted their surveillance protocols throughout the year, it had a gradual layering effect of increasing test volumes, leading to a strong Q4.

Speaker #4: Revenue was 78 million for the fourth quarter , an increase of 23% year over year . We delivered approximately 53,000 tests in the fourth quarter , up 17% from the prior year .

Speaker #4: Kidney testing continued to lead our growth, supported by both increased surveillance protocol adoption and expanded for-cause use of AlloSure Kidney at transplant centers.

Speaker #4: Generally , when a center initiates a surveillance testing protocol , they will start newly transplanted patients on that testing schedule as centers restarted their surveillance protocols .

Speaker #4: Throughout the year , it had a gradual layering effect of increasing test volumes , leading to a strong fourth quarter . Although the number of kidney transplants was relatively flat year over year in 2025 , we are encouraged by the year two Iota proposed rule , which reinforces the need to increase kidney transplants , including through the use of expanded organs that are considered medically complex based on CMS forecasted growth rates .

John Hanna: Although the number of kidney transplants was relatively flat year-over-year in 2025, we are encouraged by the year 2 IOTA proposed rule, which reinforces the need to increase kidney transplants, including through the use of expanded organs that are considered medically complex. Based on CMS's forecasted growth rates, IOTA may be an additional tailwind for our testing services business, where our growth rate is already outpacing the market. We believe the proposed framework aligns well with our portfolio and positions testing services to benefit as IOTA progresses into its 2nd year. In heart transplantation, during Q4, we announced the publication of the 3rd manuscript of the Surveillance Heart Care Outcomes Registry, or SURE, in The Journal of Heart and Lung Transplantation.

Speaker #4: Iota may be an additional tailwind for our testing services business , where our growth rate is already outpacing the market . We believe the proposed framework aligns well with our portfolio and positions .

Speaker #4: Testing services to benefit as Iota progresses into its second year in heart transplantation . During the fourth quarter , we announced the publication of the third manuscript of the Surveillance Heart Care Outcomes Registry , or Qer , in the Journal of Heart and Lung Transplantation .

Speaker #4: This large , multicenter study analysis included 1934 heart transplant recipients across 59 centers and demonstrated that heart care's combined molecular testing provides independent prognostic information beyond biopsy alone .

John Hanna: This large, multicenter study analysis included 1,934 heart transplant recipients across 59 centers and demonstrated that HeartCare's combined molecular testing provides independent prognostic information beyond biopsy alone. Patients with an abnormal HeartCare result at any time, from two months to five years post-transplant, were associated with approximately threefold increase in the 30-day risk of graft dysfunction and cardiovascular death, even when there was no biopsy evidence of rejection. These findings reinforce the clinical value of HeartCare in identifying higher-risk patients who may benefit from closer monitoring and more personalized post-transplant management, further strengthening the scientific foundation of our heart transplant franchise. Over the course of 2025, we progressed from stabilizing our revenue cycle management function to demonstrating clear RCM strength.

Speaker #4: Patients with an abnormal heart care result at any time from two months to five years post were associated with approximately a three-fold increase in the 30-day risk of graft dysfunction and cardiovascular death.

Speaker #4: Even when there was no biopsy . Evidence of rejection . These findings reinforce the clinical value of heart care in identifying higher risk patients who may benefit from closer monitoring and more personalized , post-transplant management .

Speaker #4: Further strengthening the scientific foundation of our heart transplant franchise, over the course of 2025, we progressed from stabilizing our revenue cycle management function to demonstrating clear RCM strength.

Speaker #4: After installing our new team in the first half of 25 , collections improved consistently in the third quarter and accelerated in the fourth quarter .

John Hanna: After installing our new team in the first half of 2025, collections improved consistently in Q3 and accelerated in Q4. For the year, reimbursement improved materially, with claim rejection rates declined by more than 60% over the course of 2025 through September, and overall zero pay claims improved by approximately 10% through the same period. These improvements were supported by increased automation, streamlined workflows, and more effective appeals execution, driving what we expect to be more predictable and durable revenue capture. Just as important, we improved the patient experience. We are more proactively managing prior authorizations, timely claim submission, and appeals to help patients receive their insurance benefits and diminish uncertainty. We believe this disciplined execution strengthens provider and patient confidence in CareDx as their laboratory of choice.

Speaker #4: For the year , reimbursement improved materially with claim rejection rates declined by more than 60% over the course of 2025 through September , and overall , zero pay claims improved by approximately 10% through the same period .

Speaker #4: These improvements were supported by increased automation , streamlined workflows and more effective appeals . Execution driving what we expect to be more predictable and durable .

Speaker #4: Revenue capture . Just as important , we improved the patient experience . We are more proactively managing prior authorizations , timely claims submission and appeals to help patients receive their insurance benefits and diminish uncertainty .

Speaker #4: We believe this disciplined execution strengthens provider and patient confidence in care decks as their laboratory of choice . Across 25 , we delivered meaningful improvements in cash conversion and reimbursement , reflecting stronger execution across billing , collections and appeals I'll turn now to patient and digital Solutions , which includes our transplant pharmacy software tools and remote patient monitoring services Our solution selling strategy is working .

John Hanna: Across 25, we delivered meaningful improvements in cash conversion and reimbursement, reflecting stronger execution across billing, collections, and appeals. I'll turn now to patient and digital solutions, which includes our transplant pharmacy, software tools, and remote patient monitoring services. Our solution selling strategy is working. We delivered a strong Q4 with revenue of $17 million, up 47% year-over-year. Our integrated patient and digital offerings continue to meaningfully deepen customer relationships. As we continue to engage our customers with these solutions, we're seeing the benefits of tighter integration across the transplant journey, improving the experience for patients and care teams, while reinforcing the value of our overall precision medicine platform. Turning to lab products business, we delivered solid performance in Q4, with revenue of $13 million, up 17% year-over-year, reflecting continued demand across both domestic and international markets.

Speaker #4: We delivered a strong fourth quarter with revenue of 17 million , up 47% year over year . Our integrated patient and digital offerings continue to meaningfully deepen customer relationships as we continue to engage our customers with these solutions .

Speaker #4: We're seeing the benefits of tighter integration across the transplant journey , improving the experience for patients and care teams . While reinforcing the value of our overall precision medicine platform .

Speaker #4: Turning to lab products business , we delivered solid performance in the fourth quarter with revenue of 13 million , up 17% year over year , reflecting continued demand across both domestic and international markets .

Speaker #4: Growth was supported by ongoing adoption of our HLA typing and analysis solutions, as well as stronger customer engagement at key scientific forums.

John Hanna: Growth was supported by ongoing adoption of our HLA typing and analysis solutions, as well as stronger customer engagement at key scientific forums. During the quarter, we continued to advance our product portfolio, including launching AlloSeq Tx11 and SCORE 7, which are designed to improve workflow efficiency, scalability, and regulatory alignment for transplant laboratories. AlloSeq Tx11 is our next-generation HLA typing solution, featuring enhanced Class II loci coverage to improve donor-to-recipient matching in both solid organ and stem cell transplantation. We also achieved important regulatory milestones, including IVDR certification for AlloSeq Tx and QTYPE in Europe, positioning the lab products business for sustained growth and broader global adoption going forward.

Speaker #4: During the quarter , we continued to advance our product portfolio , including launching Allosig , TW 11 and score seven , which are designed to improve workflow efficiency , scalability and regulatory alignment for transplant laboratories .

Speaker #4: Allosct 11 is our next generation HLA typing solution featuring enhanced class two loci coverage to improve donor to recipient matching in both solid organ and stem cell transplantation .

Speaker #4: We also achieved important regulatory milestones , including IVD certification for TX and Q-type in Europe , positioning the lab products business for sustained growth and broader global adoption .

Speaker #4: Looking ahead to 2026, I want to lay out our key growth drivers for the year that will allow us to sustain a high level of product innovation and extend our leadership position in existing markets through our solutions.

John Hanna: Looking ahead to 2026, I want to lay out our key growth drivers for the year that will allow us to sustain a high level of product innovation and extend our leadership position in existing markets through our solution selling strategy. These initiatives span our pipeline advancement, go-to-market strategy, and evidence generation. Together, they reinforce our ability to rapidly launch, iterate, and scale products across the platform. Importantly, this is a connected operating model designed to fuel growth and extend our leadership over time. These drivers are not just about scaling what we do today, they're about applying our platform to new, high-impact markets. This year, I'm placing a significant emphasis on advancing our cell therapy pipeline, which we have referred to as Transplant Plus.

Speaker #4: Selling strategy . These initiatives span our pipeline advancement , go to market strategy and evidence generation , and together they reinforce our ability to rapidly launch , iterate , and scale products across the platform Importantly , this is a connected operating model designed to fuel growth and extend our leadership over time .

Speaker #4: These drivers are not just about scaling what we do today , they're about applying our platform to new high impact markets This year , I'm placing a significant emphasis on advancing our cell therapy pipeline , which we have referred to as transplant plus on our February 12th investor call , we announced pivotal clinical validation results for Allogene .

John Hanna: On our 12 February investor call, we announced pivotal clinical validation results for AlloHeme, our first AI-powered NGS surveillance solution designed to predict relapse in patients with AML and MDS following allogeneic cell transplantation. AlloHeme represents an important milestone in our Transplant Plus strategy, positioning CareDx to expand beyond solid organ transplant and into cell therapy, hematology, and oncology, areas where there remains a significant unmet need for sensitive, non-invasive relapse detection. The data were generated from the ACROBAT study, a prospective multicenter trial conducted across 11 US transplant centers and demonstrating strong clinical performance, recently presented at the Tandem 2026 annual meeting.

Speaker #4: Our first AI powered NGS surveillance solution designed to predict relapse in patients with AML and MDS . Following allogeneic cell transplantation . Alarm represents an important milestone in our transplant plus strategy positioning CareDx, Inc. to expand beyond solid organ transplant and into cell therapy , hematology and oncology areas where there remains a significant unmet need for sensitive , non-invasive relapse detection .

Speaker #4: The data were generated from the ACROBAT study, a prospective, multicenter trial conducted across 11 US transplant centers and demonstrating strong clinical performance.

Speaker #4: Recently presented at the tandem 2020 Annual Meeting . In this analysis , alarm identified relapse a median of 41 days earlier than clinical detection , with 85% sensitivity and 92% specificity , and patients with a positive result at six months post-transplant showed a 12 fold higher risk of relapse compared to patients with negative results .

John Hanna: In this analysis, AlloHeme identified relapse a median of 41 days earlier than clinical detection, with 85% sensitivity and 92% specificity, and patients with a positive AlloHeme result at 6 months post-transplant showed a 12-fold higher risk of relapse compared to patients with negative results. These findings underscore the potential of a universal, blood-based surveillance approach to provide earlier risk insight than traditional bone marrow-based or marker-specific methods. Strategically, we expect AlloHeme to broaden the long-term growth opportunity for CareDx by extending our molecular surveillance expertise into a large and growing cell therapy market. In the call, I laid out our anticipated pathway to commercialization, starting with publishing the results of the ACROBAT trial, clear readiness in 2026, followed by commercial introduction in early 2027, and anticipated payer coverage in 2028.

Speaker #4: These findings underscore the potential of a universal blood based surveillance approach to provide earlier risk insight than traditional bone marrow based or marker specific methods Strategically , we expect alarm to broaden the long term growth opportunity for cadex by extending our molecular surveillance expertise into a large and growing cell therapy market .

Speaker #4: In the call , I laid out our anticipated pathway to commercialization , starting with publishing the results of the Acrobat trial clear Readiness in 2026 , followed by commercial introduction in early 2027 .

Speaker #4: In anticipated payer coverage in 2028 , while still early , we believe . Alarm has the potential to become a foundational component of a broader molecular monitoring platform for cell therapy and hematologic malignancies .

John Hanna: While still early, we believe AlloHeme has the potential to become a foundational component of a broader molecular monitoring platform for cell therapy and hematologic malignancies, consistent with our disciplined, data-driven approach to innovation and portfolio expansion. Advancing our cell therapy pipeline is a top priority for 2026, and I plan to share more updates on this work throughout the year. Turning to go-to-market, I view our operational excellence initiatives in placing the customer experience at the center of everything we do as a key part of our go-to-market strategy. That message has resonated across the country with the more than 50 transplant centers I visited with personally over the last year. In 2026, we are placing a significant focus on Epic integrations to make the customer experience simple and streamlined.

Speaker #4: Consistent with our disciplined , data driven approach to innovation and portfolio expansion . Advancing our cell therapy pipeline is a top priority for 2026 , and I plan to share more updates on this work throughout the year Turning to go to market , I view our Operational excellence initiatives and placing the customer experience at the center of everything we do as a key part of our go to market strategy .

Speaker #4: That message has resonated across the country with the more than 50 transplant centers I visited with personally over the last year . In 2026 , we are placing a significant focus on epic integrations to make the customer experience simple and streamlined .

Speaker #4: Our pipeline of customers willing to integrate is significant , and we believe these integrations will drive further volume growth . As of today , seven transplant centers are fully live on our epic Aurora instance , making us one of the fastest implementers to date , according to Epic's team .

John Hanna: Our pipeline of customers willing to integrate is significant, and we believe these integrations will drive further volume growth. As of today, seven transplant centers are fully live on our Epic Aura instance, making us one of the fastest implementers to date, according to Epic's team. Additional 14 transplant centers are in active implementation, with several more expected to formally kick off in the near term, including large multi-site systems. Our pipeline for 2026 implementations is strong. Importantly, we're beginning to see early operational and commercial benefits from these integrations. As anticipated, Epic Aura implementations are improving the quality of electronic order data, and early indications show a roughly 40% reduction in login-related issues, which meaningfully improves the experience for clinicians. We're also encouraged by early signs of growth at initial live sites, where active levels have increased following go live.

Speaker #4: An additional 14 transplant centers are in active implementation, with several more expected to formally kick off in the near term, including large multi-site systems.

Speaker #4: Our pipeline for 2026 implementations is strong . Importantly , we're beginning to see early operational and commercial benefits from these integrations as anticipated , epic Ora implementations are improving the quality of electronic order data in early indications show roughly 40% reduction in login related issues , which meaningfully improves the experience for clinicians .

Speaker #4: We're also encouraged by early signs of growth at initial live sites , where active levels have increased following Go Live while it is still early , these signals reinforce our confidence that epic integrations can support improved adoption , operational efficiency , and long term growth .

John Hanna: While it is still early, these signals reinforce our confidence that Epic integrations can support improved adoption, operational efficiency, and long-term growth as implementation continues to scale. In addition, in 2026, we are migrating our LIMS infrastructure to Epic Enterprise Solutions. This is a strategic infrastructure decision that allows us to establish a platform for lab test workflow and reporting that has two key advantages. First, the flexible infrastructure allows us to more rapidly launch new products in our lab, such as our cell therapy products, which I view as key to future growth. Second, we are able to exchange data with Epic centers more seamlessly for patient treatment purposes, even if we're not an Epic or integrated with the center. For example, if we need medical records to verify a patient's date of birth, today, we have to call the center and ask for that information.

Speaker #4: As implementation continues to scale In addition , in 2026 , we are migrating our Lims infrastructure to epic enterprise solutions . This is a strategic infrastructure decision that allows us to establish a platform for lab , test , workflow and reporting that has two key advantages .

Speaker #4: First , the flexible infrastructure allows us to more rapidly launch new products in our lab , such as our cell therapy products , which I view as key to future growth Second , we are able to exchange data with Epic centers more seamlessly for patient treatment purposes , even if we're not an Epic or integrated with the center for example , if we need medical records to verify a patient's date of birth today , we have to call the center and ask for that information .

Speaker #4: With epic Enterprise , we can reach into the EMR and pull the data seamlessly to help eliminate interruptions in the timeline of patient test results or claim billing Turning to clinical evidence .

John Hanna: With Epic Enterprise, we can reach into the EMR and pull the data seamlessly to help eliminate interruptions in the timeline of patient test results or claim billing. Turning to clinical evidence. Evidence is the foundation for building clinical belief in our testing solutions as a standard of care in solid organ transplantation. We think about evidence generation in 2026 across three dimensions. First is translational research under the umbrella of our ImmuneScape program. This January, we announced our strategic collaboration with 10x Genomics to launch ImmuneScape, a multi-omics research platform that we believe represents a significant advancement in our precision transplant medicine innovation pipeline. This initiative leverages 10x's cutting-edge single-cell and spatial biology technologies to decode the complex immune mechanisms underlying transplant rejection, particularly antibody-mediated rejection and microvascular inflammation.

Speaker #4: Evidence is the foundation for building clinical belief in our testing solutions as the standard of care in solid organ transplantation. We think about generation in 2026 across three dimensions.

Speaker #4: First is translational research under the umbrella of our immune scape program . This January , we announced our strategic collaboration with Tenex Genomics to launch Immune Scape , a multiomics research platform that we believe represents a significant advancement in our precision transplant medicine innovation pipeline .

Speaker #4: This initiative leverages Tenex cutting edge , single cell spatial biology technologies to decode the complex immune mechanisms underlying transplant rejection , rejection , particularly antibody mediated rejection and microvascular inflammation .

Speaker #4: Immune scape builds on our existing diagnostic portfolio , including our recently launched histo map kidney platform , and is designed to generate high resolution biological insights that may inform our future clinical diagnostic development pipeline by mapping immune cell populations in pathways at higher resolution .

John Hanna: ImmuneScape builds on our existing diagnostic portfolio, including our recently launched HistoMap Kidney platform, and is designed to generate high-resolution biological insights that may inform our future clinical diagnostic development pipeline. By mapping immune cell populations and pathways at higher resolution, this collaboration positions us to drive the discovery of next-generation diagnostic solutions that can better predict therapeutic response and improve treatment selection, while reinforcing our commitment to advancing personalized transplant care. Second, observational studies are a core pillar of our 2026 strategy because they demonstrate the real-world utility of our testing services and their impact on physician behavior. We expect continued publications across kidney, heart, and lung that are critical to building belief, reinforcing adoption, and supporting market access. Large registries such as COR, SURE, and ALAMO allow us to show longitudinal clinical utility across diverse populations and care settings.

Speaker #4: This collaboration positions us to drive the discovery of next generation diagnostic solutions that can better predict therapeutic response and improve treatment selection . While reinforcing our commitment to advancing personalized transplant care Second , observational studies are a core pillar of our 2026 strategy because they demonstrate the real world utility of our testing services and their impact on physician behavior .

Speaker #4: We expect continued publications across kidney , heart and lung that are critical to building belief , reinforcing adoption , and supporting market access .

Speaker #4: Large registries such as Core , Sure and Alamo allow us to show longitudinal clinical utility across diverse populations and care settings . Importantly , this real world evidence also fuels innovation by informing new algorithms refined thresholds and expanded clinical contexts of use , creating a durable engine designed to promote product differentiation and long term growth .

John Hanna: Importantly, this real-world evidence also fuels innovation by informing new algorithms, refined thresholds, and expanded clinical context of use, creating a durable engine designed to promote product differentiation and long-term growth. Lastly, as the use of our products matures and new insights are generated around the impact they may have on guiding interventions in clinical practice, we are launching interventional trials in heart and kidney, designed to demonstrate how molecular insights actively can inform treatment decisions and improve patient management. Trials like HARBOR and MERIT are designed to show that our testing is not just informative, but actionable within clinical workflows. We believe this level of evidence strengthens differentiation, supports guideline inclusion and reimbursement, and creates a foundation for new contexts of use. Together, these interventional efforts have the potential to help establish as a standard of care and support durable, scalable growth across our platform.

Speaker #4: And lastly , as the use of our products matures and new insights are generated around the impact they may have on guiding interventions in clinical practice , we are launching interventional trials in heart and kidney designed to demonstrate how molecular insights actively can inform treatment decisions and improve patient management .

Speaker #4: Trials like Harbor and Merit are designed to show that our testing is not just informative , but actionable within clinical workflows . We believe this level of evidence strengthens differentiation , supports guideline inclusion , and reimbursement , and creates a foundation for new contexts of use .

Speaker #4: Together , these interventional efforts have the potential to help establish as a standard of care and support durable , scalable growth across our platform .

Speaker #4: And now I'd like to hand it off to Nathan to cover our Q4 and 2025 financial highlights, and our 2026 guidance. Nathan.

John Hanna: Now I'd like to hand it off to Nathan to cover our Q4 and 2025 financial highlights and our 2026 guidance. Nathan?

Speaker #4: Thank you , John , and good afternoon , everyone . In my remarks today , I will discuss our fourth quarter and full year 2025 results before turning to 2026 guidance .

Nathan Smith: Thank you, John, and good afternoon, everyone. In my remarks today, I will discuss our Q4 and full year 2025 results before turning to 2026 guidance. Unless otherwise noted, all financial measures discussed are non-GAAP. For further information, please refer to GAAP and non-GAAP reconciliations per our press release, earnings presentations, and recent SEC filings. Starting with financial highlights for Q4. Total revenue for the quarter was $108.4 million, an increase of 25% from the same quarter of the previous year. Testing services revenue for the quarter was $78.4 million, an increase of 23% from the same quarter of the previous year. Testing services volume was approximately 53,000, an increase of 17% from the same quarter of the previous year. Average revenue per test for the quarter was $1,480.

Speaker #4: Unless otherwise noted , all financial measures discussed are non-GAAP . For further information , please refer to GAAP and non-GAAP reconciliations . Per our press release .

Speaker #4: Earnings presentations and recent SEC filings , starting with financial highlights for the fourth quarter . Total revenue for the quarter was $108.4 million , an increase of 25% from the same quarter of the previous year .

Speaker #4: Testing services revenue for the quarter was $78.4 million , an increase of 23% from the same quarter of the previous year . Testing services volume was approximately 53,000 , an increase of 17% from the same quarter of the previous year .

Speaker #4: Average revenue per test for the quarter was 1480 . That included 5.1 million in cash collections in excess of receivables on historical claims consistent with our guidance for the quarter , patient and digital solutions revenue for the fourth quarter was $16.8 million , an increase of 47% from the same quarter of the previous year .

Nathan Smith: That included $5.1 million in cash collections in excess of receivables on historical claims, consistent with our guidance for Q4. Patient and digital solutions revenue for Q4 was $16.8 million, an increase of 47% from the same quarter of the previous year. Lab product revenue for Q4 was $13.3 million, an increase of 17% from the same quarter of the previous year. Non-GAAP gross profit for Q4 was $74.3 million, representing a gross margin of 68.5%. Q4 non-GAAP operating expenses were $70 million, including a $6.7 million one-time cash bonus instead of equity awards for non-executives. We reported adjusted EBITDA for Q4 of $6.5 million, a decrease of 34% compared to the last year.

Speaker #4: Lab product revenue for the fourth quarter $13.3 million , an increase of 17% from the same quarter of the previous year . non-GAAP gross profit for the fourth quarter was $74.3 million , representing a gross margin of 68.5% .

Speaker #4: Fourth quarter non-GAAP operating expenses were $70 million, including a $6.7 million one-time cash bonus instead of equity awards for non-executives.

Speaker #4: We reported adjusted EBITDA for the fourth quarter of $6.5 million , a decrease of 34% compared to the last year . Our adjusted EBITDA includes approximately $7 million of operating expenses for compensation in lieu of equity grants for non-executives in the fourth quarter of 2025 , reflecting our continued focus on managing shareholder dilution and achieving a three year average employee equity burn rate consistent with industry benchmarks .

Nathan Smith: Our adjusted EBITDA includes approximately $7 million of operating expenses for compensation in lieu of equity grants for non-executives in Q4 2025, reflecting our continued focus on managing shareholder dilution and achieving a three-year average employee equity burn rate consistent with industry benchmarks, as outlined in our 2025 proxy statement. Turning to cash, we collected $115.8 million in Q4, representing an increase of 37% over the same quarter in 2024. During Q4, we repurchased $12 million of common stock, acquiring 773,000 shares at an average price of $15.79 per share. Now I'll turn to financial highlights for the full year. We reported full year 2025 revenue of $379.8 million, an increase of 14% year-over-year.

Speaker #4: As outlined in our 2025 proxy statement. Turning to cash, we collected $115.8 million in the fourth quarter, representing an increase of 37% over the same quarter in 2024.

Speaker #4: During the fourth quarter , we repurchased $12 million of common stock , acquiring 773,000 shares at an average price of 15.79 per share .

Speaker #4: And now I'll turn to financial highlights for the full year . We reported full year 2025 revenue of $379.8 million , an increase of 14% year over year .

Speaker #4: Testing services revenue was $274.5 million , an increase of 10% from last year . Testing volumes of approximately 200,000 increased 14% year over year .

Nathan Smith: Testing services revenue was $274.5 million, an increase of 10% from last year. Testing volumes of approximately 200,000 increased 14% year-over-year. Patient and digital solutions revenue for the full year was $56.9 million, up 31% year-over-year. Lab product revenue was $48.4 million for the full year, an increase of 19%. Non-GAAP gross profit for the year was $263.1 million, representing a 14% increase over 2024. Gross margins for 2025 was 69.3%, consistent year-over-year. Non-GAAP operating expenses totaled $240.1 million, or 63% of revenue, in line with the prior year as a percent of revenue.

Speaker #4: Patient and digital solutions revenue for the full year was $56.9 million , up 31% year over year . Lab product revenue was $48.4 million for the full year , an increase of 19% .

Speaker #4: non-GAAP gross profit for the year was $263.1 million , representing a 14% increase over 2024 . Gross margins for 2025 was 69.3% consistent year over year .

Speaker #4: non-GAAP operating expenses totaled $240.1 million , or 63% of revenue , in line with the prior year , as a percent of revenue .

Speaker #4: Adjusted EBITDA for the year was $31.7 million , representing a 14% increase over 2024 . And as noted earlier , lower by $6.7 million due to a the one time cash bonus in lieu of equity continued execution of initiatives to transform our RCN processes help drive cash collections of $405.6 million for the full year 2025 , a 32% increase compared to the previous year .

Nathan Smith: Adjusted EBITDA for the year was $31.7 million, representing a 14% increase over 2024, and as noted earlier, lower by $6.7 million due to the one-time cash bonus in lieu of equity. Continued execution of initiatives to transform our RCM processes helped drive cash collections of $405.6 million for the full year of 2025, a 32% increase compared to the previous year. These collections drove a $22.5 million year-over-year reduction in accounts receivable and a 42% annual improvement in DSO, which decreased from 71 days to 41 days. During the year, we bought back $88 million of common stock, purchasing 5.8 million shares at an average price of $15.16 a share.

Speaker #4: These collections drove a $22.5 million year over year reduction in accounts receivable and a 42% annual improvement in DSO , which decreased from 71 days to 41 days during the year .

Speaker #4: We bought back $88 million of common stock , purchasing 5.8 million shares at an average price of $15.16 a share . We ended the year with $201.4 million in cash .

Nathan Smith: We ended the year with $201.4 million in cash equivalents and marketable securities, 50.9 million shares outstanding and no debt. Turning now to guidance for the full year 2026. In line with what we shared previously, if the draft local coverage determination for solid organ transplant is finalized, we expect a full year negative revenue impact of approximately $15 million. We expect the LCD policy to be finalized mid-year, and we included a $7.5 million or half year impact to revenue and adjusted EBITDA in our guidance. With that, we expect full year 2026 revenue of $420 to $444 million. The midpoint of 2026 guidance represents approximately 14% year-over-year growth.

Speaker #4: Cash equivalents and marketable securities , 50.9 million shares outstanding . And no debt Turning now to guidance for the full year 2026 . In line with what we shared previously , if the draft local coverage determination for solid organ transplant is finalized , we expect a full year negative revenue impact of approximately $15 million .

Speaker #4: We expect the LCD policy to be finalized mid-year , and we included a $7.5 million , or half year impact to revenue and adjusted EBITDA in our guidance With that , we expect full year 2026 revenue of 420 to $444 million .

Speaker #4: The midpoint of 2026 . Guidance represents approximately 14% year over year growth for testing services . We expect full year testing services revenue of 306 million to $326 million .

Nathan Smith: For testing services, we expect full year testing services revenue of $306 million to $326 million. We expect full year testing volume of 220 to 228,000 tests. The midpoint of the 2026 guidance represents approximately 12% year-over-year growth. Turning to average revenue per test, on 1 January 2026, our new PLA code went into effect. That reduced our short kidney reimbursement by 4% from $2,841 to $2,753. As a result of that change and the anticipated impact of the LCD, we are modeling revenue per test to start at approximately $1,400 in the Q1 and the full year blended revenue per test in the low $1,400s.

Speaker #4: We expect full year testing volume of 220 to 228,000 tests . The midpoint of the 2026 guidance represents approximately 12% year over year growth Turning to average revenue per test on January 1st , 2026 , our new code went into effect that reduced kidney reimbursement by 4% from 2841 to 2753 .

Speaker #4: As a result of that change , and the anticipated impact of the LCD , we are modeling revenue per test to start at approximately $1,400 in the first quarter , and the full year blended revenue per test in the low 1400s .

Speaker #4: In the first half of 2026 . We expect to recognize to recognize approximately $5 million in revenue from prior periods , with the majority occurring in the first quarter .

Nathan Smith: In the first half of 2026, we expect to recognize approximately $5 million in revenue from prior periods, with the majority occurring in Q1. In the second half of 2026, we expect our accrual window to age into the new normal of cash collection. From that point forward, we expect any impact from prior period cash collections will be immaterial. Turning to patient and digital solutions and lab products, we expect full year 2026 revenue to be $114 to $118 million. Working down the P&L, we expect full year non-GAAP gross margins to be approximately 69% to 71% for the full year 2026. We expect our 2026 adjusted operating expenses to be in the range of $68 million a quarter, ±$1 million.

Speaker #4: In the second half of 2026 , we expect our accrual window to age into the new normal of cash collection . From that point forward , we expect any impact from prior period cash collections will be in material .

Speaker #4: Turning to patient and digital solutions and lab products , we expect full year 2026 revenue to be 114 to $118 million . Working down the PNL , we expect full year non-GAAP gross margins to be approximately 69 to 71% for the full year 2026 .

Speaker #4: We expect our 2026 adjusted operating expenses to be in the range of $68 million a quarter, plus or minus $1 million. That would be approximately 63% of revenue, plus or minus 1%. Included in our adjusted operating expenses is approximately $10 million.

Nathan Smith: That would be approximately 63% of revenue, ±1%. Included in our adjusted operating expenses is approximately $10 million related to strategic investments in enterprise systems, including Epic Enterprise LIMS, which we believe will be an important contributor to future growth. Turning to adjusted EBITDA, we are assuming 2026 annual depreciation expense of $9 million that will be added back to operating profit, resulting in full year 2026 adjusted EBITDA to range between $30 and $45 million, representing an approximate 20% increase over the full year 2025 at the midpoint. The Q1 is typically our softest EBITDA quarter due to the annual reset of employee benefit costs, including 401 matching and payroll taxes. In addition, the Q1 of 2026 will reflect the first full quarter impact of recent hires.

Speaker #4: Related to strategic investments in enterprise systems , including Epic enterprise , Lims , which we will believe , which we believe will be an important contributor to future growth .

Speaker #4: Turning to adjusted EBITDA , we are assuming 2026 annual depreciation expense of $9 million . That will be added back to operating profit , resulting in full year 2026 adjusted EBITDA , EBITDA to range between 30 and $45 million , representing an approximate 20% increase over the full year 2025 .

Speaker #4: At the midpoint, the first quarter is typically our softest EBITDA quarter due to the annual reset of employee benefit costs, including 401(k) matching and payroll taxes.

Speaker #4: In addition , the first quarter of 2026 will reflect will reflect the first full quarter impact of recent hires . As a result , we expect adjusted EBITDA on an absolute dollar basis to be in the high single digits in the first quarter Lastly , I want to share that I've decided to transition from my role following the completion of our filing of our form 10-K .

Nathan Smith: As a result, we expect adjusted EBITDA on an absolute dollar basis to be in the high single digits in Q1. Lastly, I want to share that I've decided to transition from my role following the completion of our filing of our Form 10-K. After several demanding years in executive finance leadership roles, I feel it's important to step back and dedicate meaningful time to my family. This decision is personal and not a reflection of my confidence in the business. I am proud of what we've accomplished and believe the company is well-positioned for the future. I'm deeply grateful to John and the entire CareDx team for the opportunity to serve alongside such talented and dedicated people in advancing our mission. Now I'd like to turn the time back to John.

Speaker #4: After several demanding years in executive finance , leadership roles , I feel it's important to step back and dedicate meaningful time to my family .

Speaker #4: This decision is personal and not a reflection of my confidence in the business . I am proud of what we've accomplished and believe the company is well positioned for the future .

Speaker #4: I'm deeply grateful to John and the entire team for the opportunity to serve alongside such talented and dedicated people in advancing our mission .

Speaker #4: And now I'd like to turn the time back to John. Thank you, Nathan, and thank you for your contributions to the company.

John Hanna: Thank you, Nathan, and thank you for your contributions to the company. We wish you the best in your future endeavors. Alongside this news, I would like to announce the appointment of Keith Kennedy as the company's Chief Operating Officer and Chief Financial Officer. Keith will oversee the company's finance organization effective 26 February. Keith brings seven years of public company CFO experience, and under his leadership, we expect to continue modernizing the company's financial systems to deliver sustained, profitable growth. Lastly, as I reflect on 2025, I'm proud of the progress we've made, not just in our financial performance, but in building the foundation for what comes next. We've strengthened our platform through solution selling, expanded evidence generation, and the infrastructure required to scale innovation.

Speaker #4: We wish you the best in your future endeavors . Alongside this news , I would like to announce the appointment of Keith Kennedy as the company's chief Operating Officer and Chief Financial Officer .

Speaker #4: Keith will oversee the company's finance organization , effective February 26th . Keith brings seven years of public company CFO experience and under his leadership , we expect to continue modernizing the company's financial systems to to deliver sustained , profitable growth .

Speaker #4: Lastly , as I reflect on 2025 , I'm proud of the progress we've made , not just in our financial performance , but in building the foundation for what comes next We've strengthened our platform through solution selling , expanded evidence generation and the infrastructure required to scale innovation .

Speaker #4: Recently , I spoke with a transplant clinician who told me that what's changed most is not just having better data , but having insights that can actually act on earlier , more confidently , and with less friction in their workflow .

John Hanna: Recently, I spoke with a transplant clinician who told me that what's changed most is not just having better data, but having insights they can actually act on earlier, more confidently, and with less friction in their workflow. That conversation captures what we're building at CareDx. As we move into 2026, with continued investment in observational evidence, interventional trials, and new markets like cell therapy, we believe we are entering a new phase of precision medicine, one defined by faster product iteration, deeper clinical impact, and durable long-term growth. With that, I'd like to open the call for questions. Operator?

Speaker #4: That conversation captures what we're building at CareDx, Inc. as we move into 2026 , with continued investment in observational evidence , interventional trials and new markets like cell therapy , we believe we are entering a new phase of precision medicine .

Speaker #4: One defined by faster product innovation iteration , deeper clinical impact and durable long term growth . And with that , I'd like to open the call for questions .

Speaker #4: Operator

Speaker #2: We will now begin the question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

Operator: We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Brandon Couillard of Wells Fargo. Your line is open. Please go ahead.

Speaker #2: To withdraw your question , press star one . Again , please pick up your handset when asking a question . If you are muted locally , please remember to unmute your device .

Speaker #2: Please stand by while we compile the Q&A roster Your first question comes from Brandon Couillard of Wells Fargo . Your line is open .

Speaker #2: Please go ahead

Speaker #5: Hey , thanks . Good afternoon . Let me just starting with the volume guidance for the year . I mean , 12% seems like somewhat of a low bar relative to the 17% exit rate .

Brandon Couillard: Hey, thanks. Good afternoon. I mean, maybe just starting with the volume guidance for the year, I mean, 12% seems like somewhat of a low bar relative to the 17% exit rate. Can you just talk about contribution from Epic Aura? John, are you assuming that transplant procedures get any better over the course of the year? Thanks.

Speaker #5: Just talk about contribution from epic aura and , John , are you assuming that transplant procedures get any better over the course of the year Thanks .

Speaker #4: Thanks for the question , Brandon . We're not we're not assuming transplant procedural volume increases in our guide . And we think it's too early to say right now what the lift from Epic Aura will be .

John Hanna: Thanks for the question, Brandon. We're not assuming transplant procedural volume increases in our guide, and we think it's too early to say right now what the lift from Epic Aura will be. We've seen, you know, nice growth in the handful of accounts that we've integrated with, over the past, you know, month or two, but that signal is a little too early to give a guide around what we think the lift will be for the full year. I anticipate that when we get to our Q2 call, and we have at least 6 months of integration under our belt with, you know, 10-plus sites, that we'll be able to give more guidance around what we think the longer-term impact of those Epic integrations will be.

Speaker #4: We've seen , you know , nice growth in the handful of accounts that we've integrated with over the past . Month or two .

Speaker #4: But that signal is a little too early to give a guide around what we think the lift will be for the full year .

Speaker #4: I anticipate that when we get to our Q2 call and we have at least six months of integration under our belt with, you know, 10-plus sites, that we'll be able to give more guidance around what we think the longer-term impact of those Epic integrations will be.

Speaker #5: Okay . That's fair . And then I'd like to just focus on the patient digital solutions business , which is really accelerated in the last two quarters .

Brandon Couillard: Okay, that's fair. I'd like to just focus on the patient digital solutions business, which has really accelerated in the last two quarters. The guide consolidated it with products. Could you break out the patient digital solutions piece, sort of the sustainability of kind of 40% growth that we saw in the back half of 2025? What does the margin profile of this business look like today, given it's mostly software? Thanks.

Speaker #5: The guide consolidated it with products . So could you break out the the patient digital solutions piece , sort of the sustainability of kind of 40% growth that we saw in the back half of 25 .

Speaker #5: And what is the margin profile of this business look like today ? Because it's mostly software . Thanks

Speaker #6: Thank you . It's Keith on the patient digital solutions . We're assuming we're going to grow the product patient and digital solutions collectively in the range of 8 to 12% next year .

Keith Kennedy: Thank you. It's Keith. On the patient digital solutions, we're assuming we're going to grow, the product patient and digital solutions collectively in a range of 8% to 12% next year. You know, we're early in the year. These businesses have outperformed, as you saw last year, every quarter. We, you know, we have high hopes that these guys are gonna deliver a better return. Hopefully, on the first call, we'll know more and have more to discuss around that. In terms of the margin profile of that business, that ranges anywhere on the software side into the mid-sixties, so 60, 70% margins in the software business.

Speaker #6: You know we're early in the year these businesses have outperformed as you saw last year . Every quarter . So we you know we have high hopes that these guys are are going to deliver a better return .

Speaker #6: And so we'll hopefully on the first call we'll we'll know more and have more to discuss around that Margin in terms of the margin profile of that business , that ranges that ranges anywhere on the software side into the mid , mid 60s .

Speaker #6: So, 60 to 70% margins in the software business. And then on the products business, that goes anywhere from, say, 50 to 60%.

Keith Kennedy: On the products business, that goes anywhere from, say, 50% to 60%, and that depends on the absorption, which is one of the things, you know, I've been working on, is taking some of the manufacturing in-house and controlling, you know, our manufacturing and overhead. As you're making these kits, it's a pretty manual process. I've been working on technology around that so that I can normalize that around the margin. You can imagine if you're not in the middle of building kits, and then you're absorbing that expense into the PNL, and that creates some variability on that side of the business.

Speaker #6: And that depends on the absorption , which is one of the things , you know , I've been working on is taking some of the manufacturing in-house and controlling , you know , our manufacturing and overhead .

Speaker #6: So as you're making these kits , it's a pretty manual process . I've been working on technology around that so that I can normalize that around the margin .

Speaker #6: So you can imagine if you're you're not in the middle of building kits and then you're absorbing that expense into the PNL . And that's that creates the , the variability on that side of the business That answer your question , Brandon

Brandon Couillard: Great. I'll back in to Keith.

Keith Kennedy: Does that answer your question, Brandon?

Speaker #5: Yes ,

Speaker #7: Sir

Brandon Couillard: Yes, sir.

Speaker #2: Your next question comes from the line of Mark Massaro of Btig . Your line is open . Please go ahead .

Operator: Your next question comes from the line of Mark Massaro of BTIG. Your line is open. Please go ahead.

Speaker #8: Hey , guys , this is Mark . Thanks for taking the questions . So I just had one on the guidance . Could you just walk us through some of the assumptions of the high end versus the low end ?

Vivian: Hey, guys. This is Vivian in for Mark. Thanks for taking the questions. I just had one on the guidance. Could you just walk us through some of the assumptions of the high end versus the low end? I just wanted to confirm if that was primarily being driven by the Medicare LCD, or are there any other swing factors to call out? I think I heard you on the prior period collections and pricing reset as well. I just wanted to check if there was anything else going on there. Thanks.

Vidyun Bais: Hey, guys. This is Vivian in for Mark. Thanks for taking the questions. I just had one on the guidance. Could you just walk us through some of the assumptions of the high end versus the low end? I just wanted to confirm if that was primarily being driven by the Medicare LCD, or are there any other swing factors to call out? I think I heard you on the prior period collections and pricing reset as well. I just wanted to check if there was anything else going on there. Thanks.

Speaker #8: I just wanted to confirm if that was primarily being driven by the Medicare LCD or there any other swing factors to call out .

Speaker #8: I think I heard you on the prior period collections and pricing reset as well . Just want to check if there was anything else going on there .

Speaker #8: Thanks , Vivian .

Keith Kennedy: Vivian, that's a great question. Let me walk you through an illustrative example of how we model this at the midpoint of the guide, and I'll try to, you know, show you the low and high end of the range and how we think about it. The midpoint of our revenue guide is $432 million, and we have a $12 million band on the low and the high end. As I turn to testing services, the midpoint of the testing volume, which drives that business, is 224,000 tests, which represents 12% year-over-year growth. Our band around that on the high and the low end is 4,000 tests or 1,000 tests per quarter. That goes between 220,000 and 228,000 tests.

Speaker #6: That's a great question. Let me walk you through an illustrative example of how we modeled this at the midpoint of the guide.

Speaker #6: And I'll try to , you know , show you the low and high end of the range and how we think about it .

Speaker #6: The midpoint of our revenue guide is 432 432 million . And we have a 12 million band on the low and the high end .

Speaker #6: As I turn to testing services , the midpoint of the testing volume , which drives that business is 224,000 . Test , which represents 12% year over year growth .

Speaker #6: Our band around that on the high and the low end is 4,000 tests, or 1,000 tests per quarter. So that goes between 220,000 and 228,000 tests.

Speaker #6: So, to Brandon's question, that will go between 10% and 14% annual growth, in line with the high end of that range earlier in the year, obviously. As we try to predict what's going to happen over the next four quarters, it's 14% growth on the high end in terms of seasonality and testing volumes.

Keith Kennedy: To Brandon's question, that'll go between 10% and 14% annual growth, in line on the high end of that range earlier in the year. Obviously, as we try to predict what's going to happen over the next four quarters, it's 14% growth on the high end. In terms of seasonality and testing volumes, we modeled a 1,000 test step up from Q4 2025 to Q1 2026, a 2,000 test step up in Q2. We have seasonality we're flat from Q2 to Q3, and a 2,000 test step up in Q4. Remember, we had 3,000 test step up in Q4 of last year. We're a little bit light to that as we're earlier in the year, and we're watching how the momentum picks up in the business.

Speaker #6: We modeled a 1000 test step up from Q4 2025 to Q1 2026 , a 2000 test step up in Q2 . We have seasonality .

Speaker #6: We're flat from Q2 to Q3 and a 2000 test step up in Q4 . And remember , we had 3000 test step up in Q4 of last year .

Speaker #6: So we're a little bit light to that as we're earlier in the year . And we're watching how the momentum picks up in the business based on the continued success in RCM .

Keith Kennedy: Based on the continued success in RCM, we anticipate recognizing $5 million in out-of-period revenue in the first half of 2026. I assume that we would generate $3 million in Q1 and $2 million in Q2 of 2026. To the earlier points, as we discuss this out-of-period revenue, if you spread the $5 million over the 224,000 tests at the midpoint of our guide, our 2026 revenue per test is higher by $22 per test. The revenue guide includes, to your point, Vivian, $7.5 million in revenue reduction, as Nathan outlined from the implementation of the LCD. Spreading the $7.5 million over the 224,000 tests at the mid, our 2026 anticipated revenue per test is negatively impacted by $33 per test.

Speaker #6: We anticipate recognizing $5 million in revenue, including out-of-period revenue, in the first half of ’26, and I assume that we would generate $3 million in the first quarter and $2 million in the second quarter of ’26.

Speaker #6: And to earlier points , as we discussed this out of period revenue , we have you spread the 5 million over the 224,000 test at the midpoint of our guide , our 2026 revenue per test is higher by $22 per test .

Speaker #6: The revenue guide includes , to your point , Vivian , 7.5 million in revenue reduction . As Nathan outlined from the implementation of the LCD spreading , the 7.5 million over the 224,000 test at the mid 2026 anticipated revenue per test is negatively impacted by $33 per test .

Speaker #6: Again , this is built into the guidance impacting revenue and adjusted EBITDA . Our guidance assumes testing revenue per test of approximately $1,410 per test at the midpoint , with a range bound of plus or -$20 per test , and I and I conservatively , I hope to beat that , but we are .

Keith Kennedy: This is built into the guidance, impacting revenue and adjusted EBITDA. Our guidance assumes testing revenue per test of approximately $1,410 per test at the midpoint, with a range bound of ±$20 per test. I, and I conservatively, I hope to beat that, but that's the range bound on that number in terms of the guide build. Again, our revenue per test is lower by $33 per test associated with the LCD and higher by $22 from the out-of-period revenue. On the product patient digital solutions, back to Brandon's point, we modeled the revenue at $116 million at the midpoint, ±$2 million. This represents a 10% increase for these service lines, range bound at 8% to 12%, and I would apply that equally to those business.

Speaker #6: That's the range bound on that number in terms of the guide build . Again , our revenue per test is lower by $33 per test associated with the LCD and higher by $22 from the out of period revenue on the product .

Speaker #6: Patient digital solutions back to Brandon's point . We modeled the revenue at 116 million at the midpoint , plus or minus 2 million .

Speaker #6: This represents a 10% increase for these service lines . Range bound at 8 to 12% , and I would apply that equally to those business .

Speaker #6: I would take last year's revenue, and I would take that range, around 8% to 12%, and apply that to each of those businesses.

Keith Kennedy: I would take last year's revenue, I would take that range bound 8% to 12% and apply that to each of those businesses. On turning to gross margin, as Nathan mentioned, we anticipate a midpoint of 70% gross margins with a range of 69% to 71%, based on the calculated revenue and gross profit that I just covered. On the OpEx line, the midpoint of the guide range assumes that we average quarterly OpEx spend of $68 million, ±$1 million. I will note, we obviously can control expenses. 60% of our expenses are labor, but we are investing for the future, we think that is a pretty range bound where we plan to end up in terms of OpEx spend on the year.

Speaker #6: I'm turning to gross margin as Nathan mentioned , we anticipate a midpoint of 70% gross margins with a range of 69 to 71% , based on the calculated .

Speaker #6: Revenue and gross profit that I just covered . And on the OpEx line , the midpoint of the guide range assumes that we average quarterly opex spend of 68 million , plus or -1 million .

Speaker #6: I will note we obviously can control expenses 60% of our expenses are labor , but we are investing for the future . And so we think that is a pretty range bound where we plan to end up in terms of opex spend on the year adjusted EBITDA ranges from 30 to 45 million .

Keith Kennedy: Adjusted EBITDA ranges from $30 to 45 million, and as Nathan mentioned, it includes a $9 million add-back for depreciation, which is included in operating expenses. Hopefully, Vivian, that'll give you a good, you know, foundation for the build to the midpoint and the range bound. Does that answer your question?

Speaker #6: And as Nathan mentioned , it includes a $9 million add back for depreciation , which is included in operating expenses . So hopefully , Vivian , that'll that'll give you a good , you foundation for the build to the midpoint and the range bound .

Speaker #6: To answer your question .

Speaker #8: Yes . Yes , that was perfect . And thank you so much for the transparency , Keith . I just have one follow up as far as the shore manuscript publication was just curious as far as any dialogue you had with Maldek since then ?

Vivian: Yes, that was perfect, and thank you so much for the transparency, Keith. I just had one follow-up. As far as the SURE manuscript, publication, I was just curious, as far as any dialogue you've had with MolDx since then. I think it's our understanding that this was the prospective study that they were looking for. Just any nuggets to flag there or any sense of where you might be in the review queue? Thanks.

Vidyun Bais: Yes, that was perfect, and thank you so much for the transparency, Keith. I just had one follow-up. As far as the SURE manuscript, publication, I was just curious, as far as any dialogue you've had with MolDx since then. I think it's our understanding that this was the prospective study that they were looking for. Just any nuggets to flag there or any sense of where you might be in the review queue? Thanks.

Speaker #8: I think it's our understanding that this was the prospective study that they were looking for . So just any nuggets to flag there or any sense of where you might be in the review queue ?

Speaker #8: Thanks

Speaker #4: Thanks , Vivian . You know , we provided a extensive comment letter to the draft local coverage determination back in August of last year .

John Hanna: Thanks, Vivian. You know, we provided an extensive comment letter to the draft local coverage determination back in August of last year. That comment letter included the data that was published in the SURE 3 manuscript. That data had previously been presented at a conference. We were, you know, relatively confident that that publication was gonna be in press in the near term, so we included that data. Of course, once that publication came out in press, we shared it with the MolDx team. I think on the last point of your question, we continue to anticipate that the LCD will be finalized sometime mid-year. We're not really in the queue necessarily for, like, a new LCD.

Speaker #4: And that comment letter included the data that was published in the Shaw three manuscript . That data had previously been presented at a conference , and we were , you know , relatively confident that that that publication was going to be in press in the near term .

Speaker #4: And so we included that data . And then , of course , once that publication came out in press , we shared it with the mold team But I think on your on your the last point of your question , we , we we continue to anticipate that the LCD will be finalized sometime mid-year .

Speaker #4: So we're not really in the queue necessarily for like a new LCD . Really the , the , the rules around draft coverage determinations contemplate that they should be finalized within one year of the draft being issued , which was July 15th of 2025 .

John Hanna: Really, the rules around draft coverage determinations contemplate that they should be finalized within one year of the draft being issued, which was 15 July 2025. We anticipate somewhere in the June to July timeframe that the LCD will be finalized.

Speaker #4: So we anticipate somewhere in the June to July time frame that the LCD will be finalized

Speaker #8: That's super helpful . Thank you guys for taking the questions

Vivian: That's super helpful. Thank you guys for taking the questions.

Vidyun Bais: That's super helpful. Thank you guys for taking the questions.

Speaker #4: Yep .

Speaker #6: Thank you. Thank you, Vivian.

Keith Kennedy: Yep, thank you.

John Hanna: Thank you, Vivian.

Speaker #2: Your next question comes from the line of Tycho Peterson of Jefferies . Your line is open . Please go ahead .

Operator: Your next question comes from the line of Tycho Peterson of Jefferies. Your line is open. Please go ahead.

Speaker #9: Hey , thanks . Maybe just on the epic . I know you're kind of you're doing epic Beaker in the lab , and you've talked about this can really help with appeals , you know , because a lot of those get timed out .

Tycho Peterson: Hey, thanks. Maybe just on the Epic, I know you're kind of, you're doing Epic, you know, Beaker in the lab, and you've talked about this can really help with appeals, you know, 'cause a lot of those get timed out. Can you maybe just help us think about that opportunity, quantify it, and, you know, what is the path to, you know, ultimately get to, you know, $2,000 in reimbursement? Over what timeframe do you think you'll get there?

Speaker #9: Can you maybe just help us think about that opportunity , quantify it and what is the path to ultimately get to 2000 reimbursement over what time frame do you think you'll get there

Speaker #6: Internally , in terms of the reimbursement , the last question first , Tycho . First , thank you for your question . This is Keith .

Keith Kennedy: Internally, in terms of the reimbursement, the last question first, Tycho. First, thank you for your question. This is Keith. We are internally, we're targeting the team is driven towards a three-year goal on the 2,000 test, obviously higher than our guide, and that's what we're working on internally. Part of doing this is making sure that all these workflows are executed in such a way that when claims are denied, you have met all and checked all the boxes. Getting eligibility checks, so you file with the right insurance company, making sure you get the prior all filed in time and those things. That is a moving target, and the only way to really do this effectively at this high volume is to have real-time information that informs your initial claim.

Speaker #6: But we are internally , we're targeting the team is driven towards a three year goal on the 2000 test . Obviously higher than our guide .

Speaker #6: And that's what we're working on internally. Part of doing this is making sure that all of these workflows are executed in such a way that when claims are denied, you have met all and checked all the boxes.

Speaker #6: So, getting eligibility checks—so you filed with the right insurance company, making sure you get the prior auth filed in time, and those things.

Speaker #6: That is a moving target. And the only way to really do this effectively at this high volume is to have real-time information that informs your initial claim.

Speaker #6: And so this is where we think getting to that 2,000 or even higher is highly important, that we integrate and streamline these operations so that that can happen on a clean claim.

Keith Kennedy: This is where we think getting to that 2,000 or even higher, it's highly important that we integrate and streamline these operations so that can happen on a clean claim.

Speaker #9: Got it .

Tycho Peterson: Got it.

Speaker #6: Let me let me , let me just let me just expand on this . You didn't ask this . You didn't ask this , Tycho .

Keith Kennedy: Let me.

Tycho Peterson: Go ahead.

Keith Kennedy: Let me just expand on this. You didn't ask this, Tycho, but we're spending $10 million to essentially upgrade and integrate between Epic. This includes Epic or Epic Enterprise. This is their full feature and function, similar to what Exact has in their operation. This includes integrating 6 lab information systems. That is a lot to do, and that's going to take us about 18 months to get all this done. We are phasing this in a multiple-phase approach, of that money, I'm probably talking $6 million would be a recurring fee. My bogey is about $6 million. There's $4 million that is cost to implement that software. It'd be less recurring.

Speaker #6: But we're spending 10 million to essentially upgrade and integrate between epic . This includes epic , Ora epic enterprise . Okay , so this is their full feature .

Speaker #6: And function . So similar to what exact has . And there operation . And this includes integrating six lab information systems . So that is that is a lot to do .

Speaker #6: And that's going to take us about 18 months to get all this done . We are phasing this into multiple phase approach . And of that money I'm probably talking 6 million would be a recurring fee .

Speaker #6: So my bogey is about $6 million. There's $4 million. That is cost to implement that software. That'd be less recurring.

Speaker #6: And then epic would tell you a , you're going to get a lift on your volume , right ? Because it's easier to order and access the test , and therefore you get that B , you're going to get better information to have cleaner claims , and you're going to offset that expense , right ?

John Hanna: Epic would tell you, A, you're going to get a lift on your volume, right? Because it's easier to order and access the test, and therefore you get that. B, you're going to get better information, have cleaner claims, and you're going to offset that expense, right? It doesn't take a heavy lift to make $5 million up or even $10 million in terms of, say, a $500 million revenue company at the time. That's how we're thinking about it in terms of the P&L and the contribution down the road.

Speaker #6: So it doesn't take a heavy lift to make 5 million up or even $10 million in terms of , say , a $500 million revenue company at the time .

Speaker #6: So that's how that's how we're thinking about it . In terms of the PNL and the contribution down the road

Speaker #9: Okay , that's that's certainly helpful . And then I guess just thinking on on kind of the back of the acrobat , you know , data and the commercial readiness , activities , you know , ahead of launch , can you maybe just talk about other other kind of getting factors and steps you're taking ahead of the commercial launch for next year

[Analyst]: Okay. That's certainly helpful. I guess, just thinking on kind of the back of, the ACROBAT, you know, data, and the commercial readiness, you know, activities, you know, ahead of launch, can you maybe just talk about other kind of gating factors and steps you're taking ahead of the commercial launch, for AlloHeme next year?

Tycho Peterson: Okay. That's certainly helpful. I guess, just thinking on kind of the back of, the ACROBAT, you know, data, and the commercial readiness, you know, activities, you know, ahead of launch, can you maybe just talk about other kind of gating factors and steps you're taking ahead of the commercial launch, for AlloHeme next year?

Speaker #4: Yeah , thanks . Thanks for the question , Tycho . I mean , I think there's a broad , you know , clinician education effort that we need to engage in around the product , right ?

John Hanna: Yeah. Thanks for the question, Tyko. I mean, I think there's a broad, you know, clinician education effort that we need to engage in around the product, right? We presented data at the Tandem Meetings and at the hematology meeting in the, you know, Q4, now for 2 years in a row. Certainly we haven't educated every clinician that could potentially order the product. What we wanna do is, you know, have an intense focus on making sure that the manuscript gets submitted so that we can get that data and evidence in print. We'll start educating centers on that data through personal promotion, we'll complete our clear readiness, which allows us to prepare our technology assessment packet and submit for reimbursement, which I anticipate will get done this fiscal year.

Speaker #4: So we've presented data at the tandem meeting and at the the hematology meeting in the , in the , in the , fourth quarter .

Speaker #4: Now for two years in a row But certainly we have an educated every clinician that could potentially order the product . And so what we want to do is , you know , have an intense focus on making sure that the manuscript gets submitted so that we can get that data and evidence in print .

Speaker #4: We'll start educating centers on that data through personal promotion . And then we'll complete our clear readiness , which allows us to prepare our technology assessment packet and submit for reimbursement , which I anticipate will get done this fiscal year .

Speaker #4: We'll get it submitted . And that gives us enough time to , you know , generate revenue and coverage in the 2028 timeframe .

John Hanna: We'll get it submitted. That gives us enough time to, you know, generate revenue and coverage in the 2028 timeframe. That's how I'm thinking about the cascade of activities. Of course, in the background, we're also working on our broader cell therapy pipeline. I talked in the call on the 12th about persistent monitoring and CAR T therapy, right? We have another product in that indication that we're working on, and several other product ideas that the team is, you know, kicking around to really fill out that portfolio, along with the broader set of solutions that we offer, like digital products to bone marrow transplant centers.

Speaker #4: So that's how I'm thinking about the cascade of activities . Of course , in the background , we're also working on our broader cell therapy pipeline .

Speaker #4: So I talked in the call on the 12th about about persistence monitoring and Car-T therapy . Right . So we have another product in that indication that we're working on and several other product ideas that the team is , kicking around to really fill out that portfolio , with the broader set of solutions that we offer , like digital products , to bone marrow transplant centers .

Speaker #4: So there's a fair amount of work for us to do around education and really priming the market for the launch of this product so that the the volume can accelerate rather rapidly .

John Hanna: There's a fair amount of work for us to do, around education and really priming the market for the launch of this product so that the volume can accelerate rather rapidly, and we can see this be a market-leading product in the cell therapy space.

Speaker #4: And we can see this be a market leading product in the cell therapy space .

Speaker #9: That sounds good. All right. Thanks.

[Analyst]: Sounds good. All right, thanks.

Tycho Peterson: Sounds good. All right, thanks.

Speaker #4: Yeah . Thanks for the questions .

John Hanna: Yeah, thanks for the questions.

Speaker #2: Your next question comes from the line of Andrew Brackman of William Blair . Your line is open . Please go ahead .

Operator: Your next question comes from the line of Andrew Brackmann of William Blair. Your line is open. Please go ahead.

Speaker #10: Hey , guys . Good afternoon . Thanks for taking the questions . Maybe back to Brandon's question around sort of the digital solutions business .

Andrew Brackmann: Hey, guys. Good afternoon. Thanks for taking the questions. Maybe back to Brandon's question, around sort of the digital solutions business. Can you maybe just sort of unpack for us sort of what specifically is driving the strength that you're seeing there? As we sort of think about the halo effect for the rest of the business, how are you sort of thinking about this as being sort of a leading indicator for share wins in that testing services side of the business as well? Thanks.

Speaker #10: Can you maybe just sort of unpack for us sort of what specifically is driving the strength that you're seeing there ? And as we sort of think about the halo effect for the rest of the business , how are you sort of thinking about this as being sort of a leading indicator for share wins in that testing services side of side of the business , as well ?

Speaker #10: Thanks

Speaker #4: Yeah . Thanks , Andrew . That's a great question . I mean , I think that , you know , we we we have been gaining share of the addressable market in testing services .

John Hanna: Thanks, Andrew. I mean, I think that, you know, we have been gaining share of the addressable market in testing services, and that is, you know, a testament to the 17% year-over-year growth we experienced in Q4. I really think, you know, Jessica, our Chief Commercial Officer, has done an outstanding job rebuilding this commercial team and field team around solution selling, so that when we walk into a transplant center, we are focused on: What are their challenges for the year? What are their goals, and how can we help support them have success? That is driving the sale of the patient and digital solutions. Previously, the company, you know, had teams split between testing and digital. They weren't selling together, so you lost some of that synergy.

Speaker #4: And that is , you know , a testament to the 17% year over year growth we experienced in the fourth quarter . And I really think , you know , Jessica , our chief commercial officer , has done an outstanding job rebuilding this commercial team and field team around solutions , so that when we walk into a transplant center , we are focused on what are their challenges for the year , what are their goals , and how can we help support them ?

Speaker #4: Have success . And that is driving the sale of the patient and digital solutions . Previously , the company you know , had had teams split between testing and digital .

Speaker #4: They weren't selling together . And so you lost some of that synergy . And when Jessica came in , she really turned that around .

John Hanna: When Jessica came in, she really turned that around, and you can see now the acceleration of that digital and patient solutions. Collectively, you know, in those businesses, we see a lot of demand for our MedActionPlan product, which is a patient discharge planning tool and medication therapy management tool. We see a lot of interest in our XynQAPI platform, which is our quality reporting tool, that has been updated to include the IOTA calculation, so that centers can see in real time where they are in terms of their IOTA scores. On the digital side, those are driving. Then on the pharmacy side, we have a very elegant solution, where our pharmacy is a transplant-focused pharmacy.

Speaker #4: And you can see now the acceleration of that digital and patient solutions collectively , you know , in those businesses , we see a lot of demand for our med action plan product , which is a patient discharge planning tool .

Speaker #4: And medication therapy management tool . We see a lot of interest in our Zin platform , which is our quality reporting tool that has been updated to include the Iota calculation .

Speaker #4: So the centers can see in real time where they are in terms of their Iota scores . So on the digital side , those are driving .

Speaker #4: And then on the pharmacy side , we have a very elegant solution where our pharmacy is a transplant focused pharmacy . So we understand the issues that these patients go through with their transplant immune suppression meds .

John Hanna: We understand the issues that these patients go through with their transplant immune suppression meds, and that's attractive to these centers, especially as they use more medically complex organs. We're seeing that growth. On the product side, we continue to benefit from this transition toward NGS for HLA typing away from PCR, and that's a global transition that we're leading. We're the market leader in that space. We've expanded the number of countries that we sell in around the globe. In the US market, we continue to innovate by launching like AlloSeq Tx11, with greater resolution in that matching process. I talked a little bit on the call about our goal of launching what we call AlloSeq Nano, which is a nanopore sequencing platform.

Speaker #4: And that's attractive to these centers, especially as they use more medically complex organs. And so we're seeing that growth on the product side.

Speaker #4: We continue to benefit from this transition toward NGS for HLA typing away from PCR . And that's a global transition that we're leading .

Speaker #4: We're the market leader in that space . We've expanded the number of countries that we sell in around the globe . And then in the US market , we continue to innovate by launching products like Allosct 11 with greater resolution in that matching process .

Speaker #4: And then I talked a little bit on the on the call about our our goal of launching what we call Nano , which is a nanopore sequencing platform .

Speaker #4: So we're continuing to innovate in that business . And that's what's driving the lab products business forward .

John Hanna: We're continuing to innovate in that business, and that's what's driving the lab products business forward.

Speaker #10: Okay . all that color . And then if I could just just one on the balance sheet , I think you ended the year just over 200 million bucks in cash .

Andrew Brackmann: Okay. Appreciate all that color. If I could, just one on the balance sheet. I think you ended the year just over $200 million in cash. You bought back close to $90 million in stock last year. Can you just talk to us about capital allocation priorities, how you sort of weigh potential tuck-in M&A versus continued share buybacks for 2026? Thanks.

Speaker #10: You you bought back close to 90 million bucks in stock last year . Can you just talk to us about capital allocation priorities , how you sort of way potential tuck in M&A versus continued share buybacks for for 2026 .

Speaker #10: Thanks

Speaker #4: Yeah it's a great it's a great question Andrew I think first and foremost for us is growing our core business right . So we see we continue to see opportunities to grow .

John Hanna: It's a great question, Andrew. I think first and foremost for us is growing our core business, right? We continue to see opportunities to grow, and where we do, we're gonna invest in the core. You see our sales and marketing spend increasing throughout the year, and, you know, we feel like we've invested significantly in that space, which gave us the freedom to go ahead and buy back some shares at a lower share price. Obviously, we're gonna be opportunistic around M&A when we see something that fits within the CareDx portfolio and our strategy. Right now, we're very focused, though, on AlloHeme and our cell therapy pipeline as our core area of investment and capital allocation.

Speaker #4: And where we do we're going to invest in the core . And you see our sales and marketing spend increasing throughout the year .

Speaker #4: And , you know , we feel like we've we've invested significantly in that space , which gave us the freedom to go ahead and buy back some shares at a lower share price .

Speaker #4: Obviously, we're going to be opportunistic around M&A when we see something that fits within the cardiac portfolio and our strategy. Right now, we're very focused, though, on Alkem and our cell therapy pipeline as our core area of investment and capital allocation.

Speaker #10: Got it. Okay, thanks, guys.

Andrew Brackmann: Got it. Okay. Thanks, guys.

Speaker #4: Yep . Thank you .

John Hanna: Yep, thank you.

Speaker #2: Your next question comes from the line of Bill Bonello of Craig-hallum . Your line is open . Please go ahead .

Operator: Your next question comes from the line of Bill Bonello of Craig-Hallum. Your line is open. Please go ahead.

Speaker #11: Hey guys . Thanks a lot for taking my questions and congratulations . I think Keith , on assuming more responsibility . So question on the 7.5 million LCD impact .

Bill Bonello: Hey, guys. Thanks a lot for taking my questions, and congratulations, I think, Keith, on assuming more responsibility. Question on the $7.5 million LCD impact. You walked it through in detail in Q2, but can you just remind us again, does that $7.5 million assume that AlloMap Heart is essentially no longer reimbursed as part of HeartCare, so that piece of the draft policy?

Speaker #11: You walked it through in detail in in Q2 , but can you just remind us again , does that 7.5 million assume that Allomap heart is essentially no longer reimbursed as part of heart care so that that piece of the draft policy

Speaker #4: Yeah . Thanks for the question , Bill . You know , the the 7.5 million is a half year impact of what I laid out as the first scenario in the Q2 call , which is the LCD is implemented as it is written today .

John Hanna: Yeah, thanks for the question, Bill. You know, the seven and a half million is a half year impact of what I laid out as the first scenario in the Q2 call, which is the LCD is implemented as it is written today, the draft LCD. That LCD contemplated there being a 12-time point bundle for heart transplant, and that bundle would pay for only one test per date of service. Whether that's AlloSure or AlloMap, I think is TBD. In general, when we model that, we assumed we were gonna get paid for 12 time points for one product, which is what the current draft LCD states. In that scenario, where today we do five to six HeartCare on average in the first year, that impact was, you know, a wash, more or less.

Speaker #4: The draft LCD . And that LCD contemplated there being a 12 time point bundle for heart transplant . And then that bundle would pay for only one test per date of service .

Speaker #4: And so whether that's all or allomap , I think is TBD . But in general , when we model that , we assumed we were going to get paid for 12 time points for one product .

Speaker #4: And the which is what the current draft LCD states . And in that scenario where today we do 5 to 6 heart cares on average in the first year that impact was , you know , a wash more or less

Speaker #11: Yep. That's okay. That's what I thought. But I wanted...

Bill Bonello: Yep. Okay, that's what I thought.

John Hanna: Because the LCD...

Speaker #6: To has

Speaker #11: Just as a as a follow up , if that proposal is , you know , you've got the shore data out there that you've presented to them .

Bill Bonello: Just as a follow-up, if that proposal is, you know, you've got the SURE data out there that you've presented to them. If that piece of the policy is changed, should we be thinking about the LCD as potentially being actually a net positive for you guys?

Speaker #11: If that piece of the policy is changed, should we be thinking about the LCD as potentially being actually a net positive for you guys?

Speaker #4: Well , I think all that we know today , Bill , is what's in the draft . Right . And so we provided that scenario around what would happen if the LCD is finalized as it's written today .

John Hanna: Well, I think all that we know today, Bill, is what's in the draft, right? We provided that scenario around what would happen if the LCD is finalized as it's written today. We're not gonna provide guidance around any modifications to that draft. I think we have a strong sense of how 2026 is gonna play out, and we included that $seven and a half million headwind in our 26 guidance.

Speaker #4: We're not going to provide guidance around any modifications to that draft . I think we have a strong sense of how 2026 is going to play out .

Speaker #4: And we included that 7.5 million headwind in our 26 guidance .

Speaker #6: I mean , the news from the last call to this call is that we thought it would be done in Q1 . It's now we think it's going to be done in the middle of the year , but it's we don't have any new .

Keith Kennedy: Yeah, I mean, the news from the last call to this call is that we thought it would be done in Q1, is now we think it's gonna be done in the middle of the year. We don't have any new information.

Speaker #4: We don't have any .

Speaker #6: New information . What would happen in the LCD . But we will have calls with you . This will happen as John goes on vacation on the 4th of July .

John Hanna: We don't have any new information.

Keith Kennedy: as to what would happen in the LCD. We will have calls with you. This will happen as John goes on vacation on the Fourth of July. You can just expect it'll happen right before the Fourth of July.

Speaker #6: So you can just expect to have them right before the 4th of July.

Bill Bonello: perfect. Then just the...

Speaker #11: Perfect . And then just the the last thing the the EBITDA guide does that also assume a similar , similar level of , you know , one time cash bonus or was that a sort of once and done thing ?

Bill Bonello: perfect. Then just the...

Keith Kennedy: Yeah

Bill Bonello: ... last thing, the EBITDA guide, does that also assume a similar level of, you know, one-time cash bonus, or was that a sort of a once and done thing?

Keith Kennedy: Yeah

Bill Bonello: ... last thing, the EBITDA guide, does that also assume a similar level of, you know, one-time cash bonus, or was that a sort of a once and done thing?

Speaker #4: No , that was a one and done . So it does not include any one time cash bonus in lieu of equity in 2026 .

John Hanna: No, that was a one and done, so it does not include any one-time cash bonus in lieu of equity in 2026.

Speaker #11: Okay . And but continue to expect sort of a lower level of of , you know , stack compensation expense or how should we think about that .

Bill Bonello: Okay, continue to expect sort of a lower level of, you know, stock compensation expense, or how should we think about that?

Speaker #4: Yeah , I think that I think that we we are targeting to have somewhere around a 4% or sub 4% burn rate for 2026 .

John Hanna: Yeah, I think that we are targeting to have somewhere around a 4% or sub 4% burn rate for 2026. Yes, a slightly lower stock compensation expense than what we experienced in 2025.

Speaker #4: And so , yes , a slightly lower stock compensation expense than what we experienced in 25 .

Speaker #11: Great . Thanks so much

Bill Bonello: Great. Thanks so much.

Speaker #6: Hey , Bill .

Keith Kennedy: Thanks, Bill.

Speaker #4: Thanks , Bill .

Speaker #2: Your next question comes from the line of Andrew Cooper of Raymond James. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Andrew Cooper of Raymond James. Your line is open. Please go ahead.

Speaker #9: Hey , everybody .

Andrew Cooper: Hey, everybody. Thanks for the questions. A lot already asked. Maybe first, starting with some of the growth, I mean, I know you mentioned surveillance and for-cause growth contributing to the number here in Q4, but could you give a little bit of the magnitude of how much sort of surveillance uptick or re-uptake you're seeing relative to, you know, penetration in that for-cause space or additional adoption in that for-cause space?

Speaker #5: Thanks for the questions . A lot already asked . So maybe first . Starting with some of the growth . I mean , I know you mentioned surveillance and for cause growth contributing to the number here in four .

Speaker #5: Q but could you give a little bit of the magnitude of how much sort of surveillance uptick or reuptake you're seeing relative to penetration in that four cause space or initial additional adoption in that four cause space

Speaker #4: Yeah . Thanks for the question , Andrew . And for joining the call . The growth has been relatively distributed between the two categories .

John Hanna: Yeah, thanks for the question, Andrew, and for joining the call. The growth has been relatively distributed between the two categories. You know, I think that there has been a significant amount of literature, including the Nature Medicine paper from 2024, talking about different for-cause uses of AlloSure in kidney transplantation. The result of that has been, you know, a reemergence of its use in surveillance testing, but also in a for-cause setting, where you see the use of AlloSure in cases where, for example, you know, a patient has undergone rejection already, and you're trying to dial in the immune suppression dosage and see those cell-free levels come down. We're seeing, you know, consistent growth and utilization in both settings.

Speaker #4: You know , I think that there has been a significant amount of literature , including the Nature Medicine paper from 2024 talking about different for cause uses of al-hashr in kidney transplantation and the results of that has been , you know , a reemergence of its use in surveillance , testing , but also in the for cause setting where you see the use of alacer in cases where , for example , a patient has undergone rejection already and you're trying to dial in the immune suppression dosage and see those cell free levels come down .

Speaker #4: So so we're seeing , you know , consistent growth in utilization in both settings . Of course , surveillance was important for 2025 .

John Hanna: Of course, surveillance was important for 2025 and contributed to the growth for the year, but we do see for-cause testing increasing.

Speaker #4: And contributed to the growth for the year . But we do see forecast testing increasing

Speaker #5: Okay . Helpful . And then one last one on the EBITDA trajectory . You know , even if we add back sort of the 4,000,000 in 1 time spend out of that 10 million investment , you talked about , looks like the midpoint of the guide is a little bit shy of 10% EBITDA margins .

Andrew Cooper: Okay, helpful. One last one on the EBITDA trajectory. You know, even if we add back sort of the $4 million in one-time spend out of that $10 million investment you talked about, looks like the midpoint of the guide is, you know, a little bit shy of 10% EBITDA margins. John, I think I heard you say, you know, the targets from the Investor Day back in 2024 are still on the table. How do we think about that ramp to sort of 20% EBITDA margin targets for 2027 that you'd talked about, given the 2024 starting point, or sorry, 2026 starting point?

Speaker #5: John , I think I heard you say , you know , the targets from the Investor Day back in 24 are still on the table .

Speaker #5: So how do we think about that ramp to sort of 20% EBITDA margin targets for '27 that you talked about, given the '24 starting point—or, sorry, '26 starting point?

Speaker #6: Let me take this . Yeah , sure . So the way we're thinking about this internally and this obviously there's a lot of moving pieces and running a company and whether or not you got to get ahead with that with investment or not having investment , we feel like we're making a few strategic investments that make the top line much stickier .

Keith Kennedy: Let me take this?

John Hanna: Yeah, sure.

Keith Kennedy: The way we're thinking about this internally, and this, obviously, there's a lot of moving pieces in running a company and whether or not you got to get ahead with that, with investment or not having investment, we feel like we're making a few strategic investments that make the top line much stickier, so we think that's worth doing. We think about the gross profit dollars, and that 50% of the incremental dollars should go down to the investors. If you're at $440 million, and you're gonna grow 15% the next year, half of that growth drops down to EBITDA, is how we think about, like, a disciplined growth profile. Does that make sense?

Speaker #6: So we think that's worth doing . But we think about the gross profit dollars and the 50% of the incremental dollars should go down to the investors .

Speaker #6: So if you're at $440 million and you're going to grow 15% the next year, half of that growth drops down to EBITDA.

Speaker #6: Is how we think about like a disciplined growth profile . Does that make sense

Speaker #5: Yeah, I will stop there.

Andrew Cooper: Yeah. I will stop there. Appreciate it.

Speaker #6: Yeah . So I mean we still believe we'll get to 20% like , you know , at like 28% . Business . We ran prior to coming over here .

Keith Kennedy: Yeah. I mean, we still believe we'll get to 20%. Like, you know, Veracyte's at, like, 28%, the business we ran prior to coming over here, and we feel like long term, we will get, you know, we'll get to 20% in this business. I mean, we have a recurring testing model. We have 250 transplant centers, you know, but getting the sales force, we've accelerated the investment in the sales force higher than the volume growth, but that is not a long-term trend. We are not going to be doing that, you know, year after year in that business. I see it as more as a step-wise function as we get the commercial organization aligned in the messaging around marketing, et cetera.

Speaker #6: And we feel like long term we will get , you know , significantly , we'll get to 20% in this business . I mean , we have a recurring testing model .

Speaker #6: We have 250 transplant centers . You know , but getting the sales force , we've accelerated the investment in the sales force higher than the volume growth .

Speaker #6: But that is not a long term trend . We are not going to be doing that . You know , year after year in that business , as he has more is a stepwise function as we get the commercial organization aligned in the messaging around marketing , etc.

Speaker #5: Okay . That's helpful . I appreciate it . Thank you

Andrew Cooper: Okay, that's helpful. I appreciate it. Thank you.

Speaker #2: Your next question comes from the line of Mason Carrico of Stephens Inc. . Your line is open . Please go ahead .

Operator: Your next question comes from the line of Mason Carrico of Stephens Inc. Your line is open. Please go ahead.

Speaker #12: Hey guys . Appreciate you taking the questions . Could you give some color on on what the testing volume guide baked in around incremental kidney protocol adoption this year ?

Mason Carrico: Hey, guys. Appreciate you taking the questions. Could you give some color on what the testing volume guide bakes in around incremental kidney protocol adoption this year? I realize there's a lag between when they're established and kind of when the benefit shows up in volumes. Do you think you can hit your testing volume target based on what's in place today? Are additional protocols upside? Just any color there would be great.

Speaker #12: I , I realize there's a lag between when there established and kind of when the benefit shows up in volumes . But do you think you hit your testing volume target based on what's in place today ?

Speaker #12: Are additional protocols upside just any color there would be great .

Speaker #4: Yeah . Thanks , Mason . You know , I think we we build the guide around . You know , how much growth potential we see in the marketplace even within centers that did implement protocols during 2025 , many of them don't always , you know , utilize the testing at the extent that they had intended to in the protocol , like patients miss blood draw or something doesn't get ordered , etc.

John Hanna: Yeah. Thanks, Mason. You know, I think we build the guide around, you know, how much growth potential we see in the marketplace. Even within centers that did implement protocols during 2025, many of them don't always, you know, utilize the testing at the extent that they had intended to in the protocol, like patients miss blood draws or something doesn't get ordered, et cetera. There's still substantial growth that can occur in those existing centers that have already adopted a protocol. That's number one. Number two, as I shared previously, we continue to see for-cause testing growing. We anticipate that that trend will continue through 2026. Third, yes, we believe there are more protocols to go get.

Speaker #4: And so there's still substantial growth that can occur in those existing centers that have already adopted a protocol. That's number one.

Speaker #4: Number two , as I shared previously , we continue to see four cores testing growing . And so we anticipate that that trend will continue through 2026 .

Speaker #4: And then third , yes , we believe there are more protocols to go get . We have many centers that we still are talking to about implementing their protocols and how they want to go about doing that in particular , populations in their center .

John Hanna: We have many centers that we still are talking to about implementing, their protocols and how they want to go about doing that, in particular populations in their center. We will continue that effort, and all of that in aggregate, gives us confidence in our guide on volume for the year, that there is that opportunity to go get.

Speaker #4: And so we will continue that effort and all of that in aggregate , gives us confidence in our guide on volume for the year that there is that that opportunity to go get

Speaker #12: Got it . And and maybe it's somewhat of a follow up to that . Could you give us an idea of of what percentage of total kidney transplants could be attributed to centers that have protocols in place today

Mason Carrico: Got it. Maybe it's somewhat of a follow-up to that. Could you give us an idea of what percentage of total kidney transplants could be attributed to centers that have protocols in place today?

John Hanna: I don't have that number off the top of my head, Mason. We'd have to go back and look into that.

Speaker #4: I don't have that number off the top of my head, Mason. We'd have to go back and look into that.

John Hanna: I don't have that number off the top of my head, Mason. We'd have to go back and look into that.

Speaker #12: All good . All right . Thank you guys .

Mason Carrico: All good. All right, thank you, guys.

Speaker #6: Thank you. Thanks, Mason.

John Hanna: Thank you.

[Analyst]: Thanks, Mason.

John Hanna: Thanks, Mason.

Speaker #2: Your final question comes from the line of Yi Chen of H.C. Wainwright and Co . Your line is open . Please go ahead .

Operator: Your final question comes from the line of Yi Chen of H.C. Wainwright & Co. Your line is open. Please go ahead.

Speaker #13: Hi . Thanks for taking the question . This is Eduardo on for ye . I guess a general question based on the evolution of the usage of glp1 and the growing clinical evidence that , there could have a meaningful impact on reducing kidney disease .

Eduardo: Hi, thanks for taking the question. This is Eduardo on for Yi. I guess a general question based on the evolution of the use of the GLP-1s and the growing clinical evidence that, you know, they could have a meaningful impact on reducing kidney disease. I'm curious what your thoughts are on its impact on the evolution of kidney transplants, because you get some tailwind, right? You could also lower BMIs and the eligibility of donors, but maybe some headwinds in the reduction of kidney disease in general, therefore the need for transplants.

Eduardo Martinez Montes: Hi, thanks for taking the question. This is Eduardo on for Yi. I guess a general question based on the evolution of the use of the GLP-1s and the growing clinical evidence that, you know, they could have a meaningful impact on reducing kidney disease. I'm curious what your thoughts are on its impact on the evolution of kidney transplants, because you get some tailwind, right? You could also lower BMIs and the eligibility of donors, but maybe some headwinds in the reduction of kidney disease in general, therefore the need for transplants.

Speaker #13: I'm curious what your thoughts are on its impact on the evolution of kidney transplants , because you get some tailwind , right ? Because you could also lower BMIs and the eligibility of donors .

Speaker #13: But maybe some headwinds in the reduction of kidney disease in general, and then therefore, the need for transplants.

Speaker #4: And .

Speaker #13: I'm curious how you see that market moving forward .

John Hanna: Yeah.

Eduardo: I'm curious how you see that market moving forward.

Eduardo Martinez Montes: I'm curious how you see that market moving forward.

Speaker #4: Yeah . Thanks . Thanks , Eduardo . It's an interesting question . And we we agree with your assessment generally , although I would say that , you know , there are upwards of 400,000 patients in the U.S.

John Hanna: Yeah, thanks. Thanks, Eduardo. It's an interesting question, we agree with your assessment generally. Although I would say that, you know, there are upwards of, you know, 400,000 patients in the US on dialysis today that could get a kidney transplant, and then 100,000 on the transplant wait list. We don't see any, you know, diminishing demand for kidney transplantation as a function of GLP-1s anytime in the near future. Certainly, as you point out, GLP-1s are advantageous to driving more transplantation. As you know or may know, one of the key kind of metrics around determining whether a recipient is eligible for undergoing a transplant is their BMI.

Speaker #4: on dialysis today that could get a kidney transplant . And then 100,000 on the transplant waitlist . So we don't see any , you know , diminishing demand for kidney transplantation as a function of GLP one .

Speaker #4: Any in the near future . But certainly , as you point out , GLP ones are advantageous to driving more transplantation . As you know or may know , one of the key kind of metrics around determining whether a recipient is eligible for undergoing a transplant is their BMI .

Speaker #4: And so if a patient can't get their BMI down to an acceptable level where, you know, in historic studies, it's shown that they do better post-transplant, then they're ineligible to get that organ.

John Hanna: If a patient can't get their BMI down to an acceptable level, where, you know, in historic studies, it's shown that they do better post-transplant, then they're ineligible to get that organ. There are many patients today on the transplant wait list that are actively being put on GLP-1s to prep them for the transplant procedure. Our understanding, my understanding from the clinicians I've talked to, that this has been a favorable, you know, development for those populations, and that they're gonna continue to use those therapies, especially as newer, more effective therapies come out for those individuals. Thanks for the question.

Speaker #4: And so there are many patients today on the transplant waitlist that are actively being put on GLP one to prep them for the transplant procedure .

Speaker #4: And our understanding , my understanding from the clinicians I've talked to , that this has been a favorable , you know , development for those populations and that they're going to continue to use those therapies , especially as newer , more effective therapies come out for individuals .

Speaker #4: So, thanks for the question.

Speaker #13: Perfect. Thanks so much. Congrats on the year and quarter.

Eduardo: Perfect. Thanks so much, and congrats on the year and quarter.

Eduardo Martinez Montes: Perfect. Thanks so much, and congrats on the year and quarter.

Speaker #6: Thanks , Eduardo .

[Analyst]: Thanks, Eduardo.

Keith Kennedy: Thanks, Eduardo.

Speaker #4: Thanks , Eduardo .

John Hanna: Thanks, Eduardo.

Speaker #2: There are no further questions at this time . This concludes today's call Thank you for attending You may now disconnect

Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

[Analyst]: This event has now concluded.

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