Q2 2026 CareDx Inc Earnings Call

July 30, 2026

Operator 2: Hello, everyone. Thank you for joining us, and welcome to the CareDx Q2 2026 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 to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Nina Dekha, CareDx Head of Investor Relations. Nina, please go ahead.

Operator: Hello, everyone. Thank you for joining us, and welcome to the CareDx Q2 2026 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 to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Nina Dekha, CareDx Head of Investor Relations. Nina, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Nina Deka, CareDx Head of Investor Relations. Nina, please go ahead.

Speaker #2: Thank you, operator. Good afternoon. Thank you for joining us today. Earlier today, CareDx released financial results for the second quarter 2026, ending June 30, 2026.

Nina Dekha: Thank you, operator. Good afternoon. Thank you for joining us today. Earlier today, CareDx released financial results for Q2 2026, ending 30 June 2026. The results and our earnings presentation are available on the company's website at caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, and Keith Kennedy, Chief Operating Officer and 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 facts 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 #2: The results and our earnings presentation are available on the company's website at caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, and Keith Kennedy, Chief Operating Officer and Chief Financial Officer.

Speaker #2: 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 facts should be deemed to be forward-looking statements.

Nina Dekha: 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 facts 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 #2: 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 #2: 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.

Nina Dekha: 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, 30 July 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 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 compatible GAAP financial measures may be found in today's earnings release, which is posted on our website.

Speaker #2: The information provided in this conference call speaks only to the live broadcast today, July 30, 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.

Speaker #2: This call will also include 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 compatible GAAP financial measures may be found in today's earnings release, which is posted on our website.

Nina Dekha: This call will also include 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 compatible GAAP financial measures may be found in today's earnings release, which is posted on our website.

Speaker #2: With that, I will now turn the call over to John.

Nina Dekha: With that, I will now turn the call over to John.

Speaker #3: Thank you, Nina. Good afternoon. And thank you for joining us today. Two years ago, we set out to transform CareDx into a leading, precision medicine diagnostics company.

John Hanna: Thank you, Nina. Good afternoon, and thank you for joining us today. Two years ago, we set out to transform CareDx into a leading precision medicine diagnostics company. Today, that transformation is largely complete. We deepened our leadership in transplantation. We sharpened the portfolio, exiting non-core businesses to focus on our highest value opportunities. We extended that same solutions approach into specialty oncology and cell therapy, new markets with the same proven model. The CareDx model is built on longitudinal molecular testing that informs clinical decision-making, supported by robust clinical evidence, integrated workflows, and patient engagement. It's repeatable and differentiated, and it connects everything we do across transplant, specialty oncology, and cell therapy. Our growth strategy is working.

Speaker #3: Today, that transformation is largely complete. We deepened our leadership in transplantation and sharpened the portfolio, exiting non-core businesses to focus on our highest value opportunities.

Speaker #3: And we extended that same solutions approach into specialty oncology and cell therapy, new markets with the same proven model. The CareDx model is built on longitudinal molecular testing that informs clinical decision-making, supported by robust clinical evidence, integrated workflows, and patient engagement.

John Hanna: The CareDx model is built on longitudinal molecular testing that informs clinical decision-making, supported by robust clinical evidence, integrated workflows, and patient engagement. It's repeatable and differentiated, and it connects everything we do across transplant, specialty oncology, and cell therapy. Our growth strategy is working.

Speaker #3: It’s repeatable and differentiated, and it connects everything we do across transplant, specialty oncology, and cell therapy. Our growth strategy is working. We are pursuing markets where our core competencies give us the right to win, where we can hold a clear number one position, and where patients face a high cost and burden of disease warranting repeat molecular testing to inform clinical decision-making.

John Hanna: We are pursuing markets where our core competencies give us the right to win, where we can hold a clear number one position, and where patients face a high cost and burden of disease warranting repeat molecular testing to inform clinical decision-making. In these markets, our solution selling model creates value and stickiness with clinicians and patients. Today in my prepared remarks, I'm going to share an update on progress with our pipeline, the integration of our strategic acquisition of NavDx, and our execution on the quarter in solid organ transplantation. Innovation remains central to how we plan to maintain our leadership position, extend our model into new markets, and grow our TAM. We continue to advance AlloHeme, our recurrence monitoring test for patients undergoing cell therapy to treat AML and MDS hematologic malignancies.

Speaker #3: In these markets, our solution-selling model creates value and stickiness with clinicians and patients. Today, in my prepared remarks, I'm going to share an update on progress with our pipeline, the integration of our strategic acquisition of NavDx, and our execution on the quarter in solid organ transplantation.

John Hanna: Today in my prepared remarks, I'm going to share an update on progress with our pipeline, the integration of our strategic acquisition of NavDx, and our execution on the quarter in solid organ transplantation. Innovation remains central to how we plan to maintain our leadership position, extend our model into new markets, and grow our TAM. We continue to advance AlloHeme, our recurrence monitoring test for patients undergoing cell therapy to treat AML and MDS hematologic malignancies.

Speaker #3: Innovation remains central to how we plan to maintain our leadership position, extend our model into new markets, and grow our TAM. We continue to advance AlloHIM, our recurrence monitoring test for patients undergoing cell therapy to treat AML and MDS hematologic malignancies.

Speaker #3: During the second quarter, investigators from the Acrobat trial submitted the Allahim clinical validation manuscript to a peer-reviewed journal. One of the most compelling findings from the Acrobat study was Allahim's ability to predict relapse ahead of standard of care.

John Hanna: During the second quarter, investigators from the ACROBAT trial submitted the AlloHeme clinical validation manuscript to a peer-reviewed journal. One of the most compelling findings from the ACROBAT study was AlloHeme's ability to predict relapse ahead of standard of care. AlloHeme predicted relapse a median of 41 days before clinical relapse was diagnosed. This lead time may provide an opportunity for earlier clinical intervention, potentially enabling clinicians to take action before overt relapse occurs. These data support the potential role of AlloHeme as a blood-based surveillance tool for risk stratification and earlier detection. Publication of these results is an important milestone in our evidence generation strategy, helping to build clinical confidence in AlloHeme and support future adoption. We believe the publication represents a key step toward our reimbursement objectives, including future coverage submissions to both private and Medicare payers.

Speaker #3: Allahim predicted relapse a median of 41 days before clinical relapse was diagnosed. This lead time may provide an opportunity for earlier clinical intervention, potentially enabling clinicians to take action before overt relapse occurs.

Speaker #3: These data support the potential role of AlloHIM as a blood-based surveillance tool for risk stratification and earlier detection. Publication of these results is an important milestone in our evidence generation strategy, helping to build clinical confidence in AlloHIM and support future adoption.

John Hanna: These data support the potential role of AlloHeme as a blood-based surveillance tool for risk stratification and earlier detection. Publication of these results is an important milestone in our evidence generation strategy, helping to build clinical confidence in AlloHeme and support future adoption. We believe the publication represents a key step toward our reimbursement objectives, including future coverage submissions to both private and Medicare payers.

Speaker #3: We believe the publication represents a key step toward our reimbursement objectives, including future coverage submissions to both private and Medicare payers. We remain on track to complete CLIA readiness activities before year-end, positioning AlloHIM for a planned 2027 commercial launch.

John Hanna: We remain on track to complete CLIA readiness activities before year-end, positioning AlloHeme for a planned 2027 commercial launch. AlloHeme represents the organic expansion of the CareDx model into cell therapy, a market where we believe we have a first-mover advantage and are positioned to win by creating meaningful value for patients and providers. HistoMap Kidney also continues to advance toward launch. HistoMap adds a molecular layer to tissue biopsy assessment to complement AlloSure Kidney blood-based monitoring. Last week, investigators from the University of Wisconsin published new data in the Journal Transplantation evaluating HistoMap Kidney in 138 kidney transplant biopsy specimens, including 42 patients with microvascular inflammation that is donor-specific antibody negative and C4d negative.

Speaker #3: Allahim represents the organic expansion of the CareDx model into cell therapy, a market where we believe we have first mover advantage and are positioned to win by creating meaningful value for patients and providers.

Speaker #3: Histomap Kidney also continues to advance toward launch. Histomap adds a molecular layer to tissue biopsy assessment to complement Alisher Kidney blood-based monitoring. Last week, investigators from the University of Wisconsin published new data in the journal Transplantation Evaluating Histomap Kidney in 138 kidney transplant biopsy specimens, including 42 patients with microvascular inflammation that is donor-specific antibody negative and CD4 negative.

John Hanna: Last week, investigators from the University of Wisconsin published new data in the Journal Transplantation evaluating HistoMap Kidney in 138 kidney transplant biopsy specimens, including 42 patients with microvascular inflammation that is donor-specific antibody negative and C4d negative.

Speaker #3: DSA-negative and CD4-negative MVI was recognized in the 2022 BANTH classification as a distinct rejection phenotype that can appear low risk by conventional biopsy assessment, yet may progress to rejection and graft loss.

John Hanna: DSA negative and C4d negative MVI was recognized in the 2022 Banff classification as a distinct rejection phenotype that can appear low risk by conventional biopsy assessment, yet may progress to rejection and graft loss. In the study, HistoMap Kidney distinguished patients with MVI pathology with markedly different outcomes, with more than three times the rate of graft loss at 6 years in the HistoMap high-risk group compared with the low-risk group, supporting the potential of HistoMap Kidney to provide clinically meaningful information beyond conventional biopsy assessment. HistoMap is an example of how we are establishing clinical differentiation and providing molecular solutions to our customers from non-invasive blood-based monitoring to prognostic tissue analysis of high-risk patients undergoing biopsy. We intend to launch HistoMap Kidney in a clinical study this year and make it available more broadly commercially in 2027.

Speaker #3: In the study, Histomap Kidney distinguished patients with MVI pathology with markedly different outcomes, with more than three times the rate of graft loss at six years in the Histomap high-risk group compared with the low-risk group.

Speaker #3: Supporting the potential of HistoMap Kidney to provide clinically meaningful information beyond conventional biopsy assessment, HistoMap is an example of how we are establishing clinical differentiation and providing molecular solutions to our customers—from non-invasive blood-based monitoring to prognostic tissue analysis of high-risk patients undergoing biopsy.

John Hanna: HistoMap is an example of how we are establishing clinical differentiation and providing molecular solutions to our customers from non-invasive blood-based monitoring to prognostic tissue analysis of high-risk patients undergoing biopsy. We intend to launch HistoMap Kidney in a clinical study this year and make it available more broadly commercially in 2027.

Speaker #3: We intend to launch Histomap Kidney in a clinical study this year and make it available more broadly commercially in 2027. In addition to our pipeline programs, we have significantly expanded our TAM with the recent NavDx acquisition in specialty oncology.

John Hanna: In addition to our pipeline programs, we have significantly expanded our TAM with the recent NavDx acquisition in specialty oncology. NavDx adds a clinically differentiated solid tumor MRD platform to the CareDx portfolio. We are already seeing encouraging momentum as we integrate the business. Since closing the acquisition on 1 July, we've made meaningful progress executing the integration priorities that support the strategic rationale for the transaction. Our focus has been on three areas where we believe CareDx's core competencies can drive growth and create value. First, leveraging our commercial capabilities in evidence generation, building belief in molecular testing as a standard of care, and patient support infrastructure to expand adoption of NavDx. Second, applying our workflow expertise, including Epic integration and connectivity capabilities, to simplify the customer experience and support incorporation into routine clinical practice.

Speaker #3: NavDx adds a clinically differentiated solid tumor MRD platform to the CareDx portfolio. We are already seeing encouraging momentum as we integrate the business. Since closing the acquisition on July 1, we've made meaningful progress executing the integration priorities that support the strategic rationale for the transaction.

Speaker #3: Our focus has been on three areas where we believe CareDx's core competencies can drive growth and create value. First, leveraging our commercial capabilities in evidence generation, building belief in molecular testing as a standard of care, and patient support infrastructure to expand adoption of NavDx.

John Hanna: First, leveraging our commercial capabilities in evidence generation, building belief in molecular testing as a standard of care, and patient support infrastructure to expand adoption of NavDx. Second, applying our workflow expertise, including Epic integration and connectivity capabilities, to simplify the customer experience and support incorporation into routine clinical practice.

Speaker #3: Second, applying our workflow expertise, including Epic integration and connectivity capabilities, to simplify the customer experience and support incorporation into routine clinical practice. And third, integrating revenue cycle management and reimbursement capabilities to create a scalable operational foundation and support broader market access.

John Hanna: Third, integrating revenue cycle management and reimbursement capabilities to create a scalable operational foundation and support broader market access. Together, these initiatives reflect the core value creation opportunity behind the acquisition, combining NavDx's differentiated technology with CareDx's commercial reach, workflow expertise, and operational scale. In July, I had the fortune to attend the 2026 American Head and Neck Society Annual Meeting in Boston and meet with head and neck surgeons, radiation oncologists, and medical oncologists from over 60 institutions across the US. Their conviction for using NavDx in their practice is strong, and they were enthusiastic about how our solutions address their key challenges with broader adoption. At the event, over 30 presentations and sessions focused on circulating tumor HPV DNA or other biomarker-related topics. New data were presented from a nationwide cohort of approximately 40,000 patients with HPV-driven cancers.

Speaker #3: Together, these initiatives reflect the core value creation opportunity behind the acquisition, combining NavDx's differentiated technology with CareDx's commercial reach, workflow expertise, and operational scale.

Speaker #3: In July, I had the fortune to attend the 2026 American Head and Neck Society annual meeting in Boston, and meet with Head and Neck surgeons, radiation oncologists, and medical oncologists from over 60 institutions across the US.

John Hanna: In July, I had the fortune to attend the 2026 American Head and Neck Society Annual Meeting in Boston and meet with head and neck surgeons, radiation oncologists, and medical oncologists from over 60 institutions across the US. Their conviction for using NavDx in their practice is strong, and they were enthusiastic about how our solutions address their key challenges with broader adoption. At the event, over 30 presentations and sessions focused on circulating tumor HPV DNA or other biomarker-related topics. New data were presented from a nationwide cohort of approximately 40,000 patients with HPV-driven cancers.

Speaker #3: Their conviction for using NavDx in their practice is strong, and they were enthusiastic about how our solutions address their key challenges with broader adoption.

Speaker #3: At the event, over 30 presentations and sessions focused on circulating tumor HPV DNA or other biomarker-related topics. New data were presented from a nationwide cohort of approximately 40,000 patients with HPV-driven cancers.

Speaker #3: The study focused on patients whose NavDx test became positive during surveillance monitoring, indicating molecular recurrence of disease. The authors evaluated the clinical significance of the NavDx quantitative score—a differentiating feature of the test—in predicting response to treatment, otherwise known as salvage therapy.

John Hanna: The study focused on patients whose NavDx tests became positive during surveillance monitoring, indicating molecular recurrence of disease. The authors evaluated the clinical significance of the NavDx quantitative score, a differentiating feature of the test, in predicting response to treatment, otherwise known as salvage therapy. The data demonstrated that lower NavDx scores at the time of molecular recurrence were associated with higher rates of ctDNA clearance and faster clearance to undetectable levels, supporting the role of NavDx in predicting response to salvage therapy. These findings suggest the test kinetics may provide prognostic information, helping clinicians better understand how patients respond to treatment in the recurrent setting. Also at AHNS, we hosted a symposia featuring leading clinicians of the California Head and Neck Cancer Consortium, who recently published consensus recommendations on the use of circulating tumor HPV DNA in head and neck cancer.

Speaker #3: The data demonstrated that lower NavDx scores at the time of molecular recurrence were associated with higher rates of ctDNA clearance and faster clearance to undetectable levels.

Speaker #3: Supporting the role of NavDx in predicting response to salvage therapy, these findings suggest the test's kinetics may provide prognostic information, helping clinicians better understand how patients respond to treatment in the recurrent setting.

John Hanna: These findings suggest the test kinetics may provide prognostic information, helping clinicians better understand how patients respond to treatment in the recurrent setting. Also at AHNS, we hosted a symposia featuring leading clinicians of the California Head and Neck Cancer Consortium, who recently published consensus recommendations on the use of circulating tumor HPV DNA in head and neck cancer.

Speaker #3: Also, at AHNS, we hosted a symposium featuring leading clinicians of the California Head and Neck Cancer Consortia, who recently published consensus recommendations on the use of circulating tumor HPV DNA in head and neck cancer.

Speaker #3: The session drew strong engagement from the Head and Neck Oncology community. 33 experts across 15 institutions reached a strong consensus that circulating tumor HPV DNA is a valuable tool for diagnosis and surveillance, and that serial testing should be performed throughout the years following definitive treatment.

John Hanna: The session drew strong engagement from the head and neck oncology community. 33 experts across 15 institutions reached a strong consensus that circulating tumor HPV DNA is a valuable tool for diagnosis and surveillance, and that serial testing should be performed throughout the years following definitive treatment. This is an important milestone. When leading clinicians converge on consensus recommendations for how a technology should be used, it signals that molecular testing is becoming an established part of how these patients are managed in clinical practice. Moving on to solid organ transplant, we continue to see molecular testing increasingly integrated into clinical decision-making across transplant care. As the evidence base grows, clinicians are using molecular insights not only to detect rejection, but also to assess rejection risk, evaluate treatment response, and support longitudinal patient management.

Speaker #3: This is an important milestone. When leading clinicians converge on consensus recommendations for how a technology should be used, it signals that molecular testing is becoming an established part of how these patients are managed in clinical practice.

Speaker #3: Moving on to solid organ transplant, we continue to see molecular testing increasingly integrated into clinical decision-making across transplant care. As the evidence base grows, clinicians are using molecular insights not only to detect rejection, but also to assess rejection risk, evaluate treatment response, and support longitudinal patient management.

John Hanna: Moving on to solid organ transplant, we continue to see molecular testing increasingly integrated into clinical decision-making across transplant care. As the evidence base grows, clinicians are using molecular insights not only to detect rejection, but also to assess rejection risk, evaluate treatment response, and support longitudinal patient management.

Speaker #3: At the American Transplant Congress, the largest transplant meeting of the year, we continued to build belief in molecular testing as a standard of care by advancing our evidence generation strategy with new data that support both adoption of AlloSure surveillance testing and the expansion of its use into new for-cause contexts of use.

John Hanna: At the American Transplant Congress, the largest transplant meeting of the year, we continued to build belief in molecular testing as a standard of care by advancing our evidence generation strategy with new data that support both adoption of AlloSure surveillance testing and the expansion of its use into new for-cause contexts of use. At ATC, CareDx data were featured in more than 30 abstracts and nine oral presentations spanning kidney, heart, lung, and multi-organ transplantation, with findings generated from studies conducted across more than 110 transplant centers in the United States. One of the clearest themes at ATC was the continued evolution of AlloSure Kidney beyond surveillance, increasingly being evaluated for risk assessment, treatment response, and long-term graft outcomes, not just to identify injury.

Speaker #3: At ATC, CareDx data were featured in more than 30 abstracts and nine oral presentations spanning kidney, heart, lung, and multi-organ transplantation, with findings generated from studies conducted across more than 110 transplant centers in the United States.

Speaker #3: One of the clearest themes at ATC was the continued evolution of AlloSure Kidney beyond surveillance, increasingly being evaluated for risk assessment, treatment response, and long-term graft outcomes.

John Hanna: One of the clearest themes at ATC was the continued evolution of AlloSure Kidney beyond surveillance, increasingly being evaluated for risk assessment, treatment response, and long-term graft outcomes, not just to identify injury.

Speaker #3: Not just to identify injury. One of the most notable studies presented at ATC evaluated more than 1,100 kidney transplant recipients from the KOR registry, and examined how Allosure trajectories during the first four months of surveillance testing following transplant related to long-term outcomes.

John Hanna: One of the most notable studies presented at ATC evaluated more than 1,100 kidney transplant recipients from the KOAR registry and examined how AlloSure trajectories during the first four months of surveillance testing following transplant related to long-term outcomes. The findings were striking. Approximately 35% of patients with persistently elevated AlloSure levels experienced rejection and had a ninefold higher risk of graft loss compared to patients with consistently low AlloSure levels. Patients whose elevations resolved over time had outcomes similar to those who were never elevated at all. In other words, it's not a single result that matters, but the trajectory over time, which is exactly the insight that longitudinal molecular monitoring with AlloSure is designed to provide. In the for-cause setting, we saw AlloSure used as the endpoint to judge whether a therapy is working.

Speaker #3: The findings were striking. Approximately 35% of patients with persistently elevated AlloSure levels experienced rejection, and had a nine-fold higher risk of graft loss compared to patients with consistently low AlloSure levels.

Speaker #3: Patients whose elevations resolved over time had outcomes similar to those who were near who were never elevated at all. In other words, it's not a single result that matters.

John Hanna: Patients whose elevations resolved over time had outcomes similar to those who were never elevated at all. In other words, it's not a single result that matters, but the trajectory over time, which is exactly the insight that longitudinal molecular monitoring with AlloSure is designed to provide. In the for-cause setting, we saw AlloSure used as the endpoint to judge whether a therapy is working.

Speaker #3: But the trajectory over time, which is exactly the insight that longitudinal molecular monitoring with Allosure is designed to provide. In the for-cause setting, we saw Allosure used as the endpoint to judge whether a therapy is working.

Speaker #3: In a single-center prospective study, patients with persistent chronic antibody-mediated rejection were followed with serial AlloSure testing through monthly to soliuzumab infusions. Donor-specific antibodies declined and kidney function stabilized, yet AlloSure did not change over 12 months, and follow-up biopsies confirmed that antibody-mediated rejection was still present.

John Hanna: In a single-center prospective study, patients with persistent chronic antibody-mediated rejection were followed with serial AlloSure testing through monthly tocilizumab infusions. Donor-specific antibodies declined and kidney function stabilized, yet AlloSure did not change over 12 months. Follow-up biopsies confirmed that antibody-mediated rejection was still present. The conventional markers suggested that patients were improving. AlloSure, confirmed by biopsy, showed the injury was ongoing. That raises real questions about how sensitive conventional markers are for monitoring treatment response, and it supports AlloSure as a potential surrogate endpoint in clinical trials of transplant therapies. Taken together, these data speak to our growth model. More patients monitored over time, more clinical contexts of use where a treating physician needs an objective molecular answer, and a growing role for AlloSure in how new transplant therapies are evaluated.

Speaker #3: The conventional markers suggested that patients were improving. AlloSure, confirmed by biopsy, showed the injury was ongoing. That raises real questions about how sensitive conventional markers are for monitoring treatment response, and it supports AlloSure as a potential surrogate endpoint in clinical trials of transplant therapies.

John Hanna: That raises real questions about how sensitive conventional markers are for monitoring treatment response, and it supports AlloSure as a potential surrogate endpoint in clinical trials of transplant therapies. Taken together, these data speak to our growth model. More patients monitored over time, more clinical contexts of use where a treating physician needs an objective molecular answer, and a growing role for AlloSure in how new transplant therapies are evaluated.

Speaker #3: Taken together, these data speak to our growth model: more patients monitored over time, more clinical contexts of use where a treating physician needs an objective molecular answer, and a growing role for AlloSure in how new transplant therapies are evaluated.

Speaker #3: The data presented at ATC reinforced both the strength of our evidence generation engine and the leadership position we have built in transplant diagnostics. Separately, this quarter marked another milestone with the publication of our second KOR analysis in the esteemed Journal of the American Society of Nephrology.

John Hanna: The data presented at ATC reinforce both the strength of our evidence generation engine and the leadership position we have built in transplant diagnostics. Separately, this quarter marked another milestone with the publication of our second KOAR analysis in the esteemed Journal of the American Society of Nephrology. In more than 1,250 kidney transplant recipients across 56 US centers, roughly a third of patients saw their AlloSure levels rise over time. Those elevations mattered. Patients with elevated AlloSure levels faced a nearly four to six times higher risk of losing their transplant. Most of these elevations appeared subclinically before any measurable decline in kidney function, meaning AlloSure identified patients at risk well before other measures. On the other end, patients who stayed consistently low represented a clearly low-risk group with low rates of rejection, graft dysfunction, or graft loss.

Speaker #3: In more than 1,250 kidney transplant recipients across 56 US centers, roughly a third of patients saw their Allosure levels rise over time, and those elevations mattered.

Speaker #3: Patients with elevated AlloSure levels faced a nearly four- to six-times higher risk of losing their transplant. Most of these elevations appeared subclinically before any measurable decline in kidney function, meaning AlloSure identified patients at risk well before other measures.

John Hanna: Patients with elevated AlloSure levels faced a nearly four to six times higher risk of losing their transplant. Most of these elevations appeared subclinically before any measurable decline in kidney function, meaning AlloSure identified patients at risk well before other measures. On the other end, patients who stayed consistently low represented a clearly low-risk group with low rates of rejection, graft dysfunction, or graft loss.

Speaker #3: And on the other end, patients who stayed consistently low represented a clearly low-risk group, with low rates of rejection, graft dysfunction, or graft loss.

Speaker #3: This is what Allosure makes possible. Identifying risk earlier and supporting more informed, clinical data, these Allosure kidney findings continue to differentiate our platform, reinforce our leadership in transplant, and demonstrate why monitoring with Allosure is becoming a routine part of how transplant patients are managed.

John Hanna: This is what AlloSure makes possible: identifying risk earlier and supporting more informed clinical decision-making. Together with the ATC data, these AlloSure Kidney findings continue to differentiate our platform, reinforce our leadership in transplant, and demonstrate why monitoring with AlloSure is becoming a routine part of how transplant patients are managed. Another development announced on 16 July was the finalization of the Medicare Local Coverage Determination for solid organ transplant molecular testing. The policy affirms coverage for surveillance testing across kidney, heart, and lung transplant and reinforces the role of AlloSure and AlloMap in post-transplant patient management. What we find encouraging is that the foundational policy extends beyond existing coverage. It establishes a pathway for HistoMap coverage for molecular assessment in situations where conventional biopsy findings may be indeterminate or discrepant with clinical presentation, which is supported by the HistoMap data published this quarter.

Speaker #3: Another development announced on July 16th was the finalization of the Medicare local coverage determination for solid organ transplant molecular testing. The policy affirms coverage for surveillance testing across kidney, heart, and lung transplants, and reinforces the role of AlloSure and AlloMap in post-transplant patient management.

John Hanna: The policy affirms coverage for surveillance testing across kidney, heart, and lung transplant and reinforces the role of AlloSure and AlloMap in post-transplant patient management. What we find encouraging is that the foundational policy extends beyond existing coverage. It establishes a pathway for HistoMap coverage for molecular assessment in situations where conventional biopsy findings may be indeterminate or discrepant with clinical presentation, which is supported by the HistoMap data published this quarter.

Speaker #3: In addition, what we find encouraging is that the foundational policy extends beyond existing coverage. It establishes a pathway for histomap coverage for molecular assessment in situations where conventional biopsy findings may be indeterminate or discrepant with clinical presentation.

Speaker #3: Which is supported by the Histomap data published this quarter. The policy also establishes a framework that can support future innovation in additional organs, such as liver transplant.

John Hanna: The policy also establishes a framework that can support future innovation in additional organs such as liver transplant. As a reminder, today, nearly 500,000 Americans are on kidney dialysis. Approximately 100,000 Americans are on a transplant wait list. Improving access to transplantation will require the field to make greater use of available donor organs, manage increasingly high-risk recipients, and ultimately support emerging transplant solutions such as gene-edited organs and xenotransplantation. As transplant medicine evolves, tools that can assess immunological activity, detect injury earlier, and support clinical decision-making become increasingly important. We believe the final policy acknowledges that molecular diagnostics are an integral part of transplant management, not only for today's standard of care surveillance with AlloSure and AlloMap, but also for the next generation of transplant innovation.

Speaker #3: As a reminder, today nearly 500,000 Americans are on kidney dialysis, and approximately 100,000 Americans are on a transplant waitlist. Improving access to transplantation will require the field to make greater use of available donor organs.

Speaker #3: Managing increasingly high-risk recipients, and ultimately supporting emerging transplant solutions such as gene-edited organs and xenotransplantation. As transplant medicine evolves, tools that can assess immunological activity, detect injury earlier, and support clinical decision-making become increasingly important.

John Hanna: As transplant medicine evolves, tools that can assess immunological activity, detect injury earlier, and support clinical decision-making become increasingly important. We believe the final policy acknowledges that molecular diagnostics are an integral part of transplant management, not only for today's standard of care surveillance with AlloSure and AlloMap, but also for the next generation of transplant innovation.

Speaker #3: We believe the final policy acknowledges that molecular diagnostics are an integral part of transplant management, not only for today's standard of care surveillance with AlloSure and AlloMap, but also for the next generation of transplant innovation.

Speaker #3: With that, I'd like to turn the call over to Keith to review our financial results and outlook for the remainder of the year. Keith?

John Hanna: With that, I'd like to turn the call over to Keith to review our financial results and outlook for the remainder of the year. Keith?

Speaker #1: Thank you, John. I'm planning to cover our second quarter 2026 financial results and our updated 2026 guidance. Turning to the financial highlights section of our earnings presentation, for the second quarter 2026 and our year-over-year results.

Keith Kennedy: Thank you, John. I plan to cover our Q2 2026 financial results and our updated 2026 guidance. Turning to the financial highlights section of our earnings presentation for the Q2 2026 and our year-over-year results. Total revenue increased 52% to $132 million. Testing services revenue increased 61% to $100 million or $1,720 per test. Testing volume increased 17% to 58,000 tests. Non-GAAP gross margins increased to 74%. Adjusted EBITDA increased $19 million to $25 million or 19% of revenue. We repurchased 570,000 shares for $12.2 million or $21.50 per share. We ended the quarter with $374 million in cash and cash equivalents and no debt. We closed the sale of the lab products business on 30 June, recognizing a gain on the sale of $113 million, which is included in GAAP operating income, but excluded from operating income for non-GAAP reporting.

Speaker #1: Total revenue increased 52% to $132 million. Testing services revenue increased 61% to $100 million, or $1,720 per test. Testing volume increased 17% to 58,000 tests.

Speaker #1: Non-GAAP gross margins increased to $74%, adjusted EBITDA increased $19 million to $25 million, or $19% of revenue. We repurchased $570,000 shares for $12.2 million or $21.50 per share.

Keith Kennedy: We repurchased 570,000 shares for $12.2 million or $21.50 per share. We ended the quarter with $374 million in cash and cash equivalents and no debt. We closed the sale of the lab products business on 30 June, recognizing a gain on the sale of $113 million, which is included in GAAP operating income, but excluded from operating income for non-GAAP reporting.

Speaker #1: We ended the quarter with $374 million in cash and cash equivalents, and no debt. And we closed the sale of the lab products business on June 30th, recognizing a gain on the sale of $113 million which is included in GAAP operating income but excluded from operating income for non-GAAP reporting.

Speaker #1: Turning to slide 13 and our Q2 revenue performance, total revenue increased 52% to $132 million. Testing services revenue increased 61% to $100 million, including $15.6 million in out-of-period revenue.

Keith Kennedy: Turning to slide 13 and our Q2 revenue performance. Total revenue increased 52% to $132 million. Testing services revenue increased 61% to $100 million, including $15.6 million in out-of-period revenue. Patient and digital solutions revenue increased 50% to $19 million, driven principally by our pharmacy. Lab products revenue increased 8% to $13 million. Turning to the next slide, non-GAAP gross margins increased to 74%. Non-GAAP gross profit of $98 million increased 63%. Non-GAAP operating expenses of $75 million or 57% of revenue, including approximately $7 million of incremental transaction-related payments and bonus accrual for performance above plan. Adjusted EBITDA increased to $25 million or 19% of revenue. Our GAAP operating income includes $113 million gain from the sale of our lab products business. GAAP net income of $111 million, or $2.15 per basic share or $2.07 per diluted share.

Speaker #1: Patient and digital solutions revenue increased 50% to $19 million, driven principally by our pharmacy lab products revenue increased 8% to $13 million. Turning to the next slide, non-GAAP gross margins increased to $74%.

Keith Kennedy: Turning to the next slide, non-GAAP gross margins increased to 74%. Non-GAAP gross profit of $98 million increased 63%. Non-GAAP operating expenses of $75 million or 57% of revenue, including approximately $7 million of incremental transaction-related payments and bonus accrual for performance above plan. Adjusted EBITDA increased to $25 million or 19% of revenue. Our GAAP operating income includes $113 million gain from the sale of our lab products business. GAAP net income of $111 million, or $2.15 per basic share or $2.07 per diluted share.

Speaker #1: Non-GAAP gross profit of $98 million increased 63%. Non-GAAP operating expenses were $75 million, or 57% of revenue, including approximately $7 million of incremental transaction-related payments and bonus accrual for performance above plan.

Speaker #1: Adjusted EBITDA increased to $25 million, or 19% of revenue. Our GAAP operating income includes a $113 million gain from the sale of our Lab Products business.

Speaker #1: GAAP net income of $111 million, or $2.15 per basic share, or $2.07 per diluted share. We are now connected electronically with approximately 90% of our transplant customers by test volume, with 50% of test volume from integrated EMRs and 40% through our Care Portal.

Keith Kennedy: We are now connected electronically with approximately 90% of our transplant customers by test volume, with 50% of test volume from integrated EMRs and 40% through our care portal. We are live today with 17 transplant centers using Epic Aura, and we expect to be live with 30 to 40 centers by the end of the year. Turning to the next slide, cash collections increased 49% to $136 million. We generated cash flow from operations of $31 million this quarter and $94 million over the last four quarters. We ended the quarter with $374 million in cash and cash equivalents and no debt.

Speaker #1: We are live today with 17 transplant centers using Epicora. And we expect to be live with 30 to 40 centers. By the end of the year.

Speaker #1: Turning to the next slide, cash collections increased 49% to $136 million. We generated cash flow from operations of $31 million this quarter, and $94 million over the last four quarters.

Speaker #1: And we ended the quarter with $374 million in cash and cash equivalents and no debt. Turning to guidance, starting on slide 16, we are raising 2026 revenue guidance to $490 million to $500 million.

Keith Kennedy: Turning to guidance, starting on slide 16, we are raising 2026 revenue guidance to $490 to $500 million, representing a 30% increase year over year at the $495 million midpoint of the range, and adjusted EBITDA from $66 to $78 million, or 15% of revenue at the $72 million midpoint of the range. Our guidance includes the addition of specialty oncology in H2 2026 in testing services. We applied the following assumptions or estimates in modeling our full year guidance consistent with non-GAAP measures. Testing volume between 258,000 and 266,000, representing a 31% increase year over year at the 262,000 midpoint of the range. The midpoint of our guidance assumes Q3 testing volume of 72,600 tests, with transplant volumes of 58,000 and specialty oncology volume of 14,600.

Speaker #1: Representing a 30% increase year-over-year at the $495 million midpoint of the range and adjusted EBITDA from $66 to $78 million or $15% of revenue at the $72 million midpoint of the range.

Speaker #1: Our guidance includes the addition of specialty oncology in the second half of 2026 and testing services. We applied the following assumptions or estimates and modeling our full-year guidance consistent with non-GAAP measures.

Keith Kennedy: We applied the following assumptions or estimates in modeling our full year guidance consistent with non-GAAP measures. Testing volume between 258,000 and 266,000, representing a 31% increase year over year at the 262,000 midpoint of the range. The midpoint of our guidance assumes Q3 testing volume of 72,600 tests, with transplant volumes of 58,000 and specialty oncology volume of 14,600.

Speaker #1: Testing volume between 258,000 and 266,000, representing a 31% increase year-over-year at the $262,000 midpoint of the range. The midpoint of our guidance assumes Q3 testing volume of 72,600, up from 58,000, and specialty oncology volume of 14,600.

Speaker #1: For Q4, the midpoint of our guidance assumes testing volume will increase sequentially by 5% to 76,300 tests, with transplant volumes of 60,000 and specialty oncology volumes of 16,300 tests.

Keith Kennedy: For Q4, the midpoint of our guidance assumes testing volume increase sequentially 5% to 76,300 tests, with transplant volumes of 60,000 and specialty oncology volumes of 16,300 tests. Our Q3 and Q4 specialty oncology volumes reflect a 30% increase over the prior year. We removed the $7.5 million LCD impact embedded in our prior guidance. Our non-GAAP gross margin range in the guidance is 71% to 73%. The non-GAAP operating expenses of $293 to $297 million, or approximately 60% of revenue, and our 2026 depreciation expense of approximately $10 million ± $1 million. Our full year guidance assumes revenue for each service, calculated at the midpoint of the range, includes testing services revenue of $400 million, inclusive of $24 million in specialty oncology revenue, patient and digital revenue of $72 million, and product revenue of $23 million.

Speaker #1: And our Q3 and Q4 specialty oncology volumes reflect a 30% increase over the prior year. We removed the $7.5 million LCD impact embedded in our prior guidance.

Speaker #1: Our non-GAAP gross margin range in the guidance is 71% to 73%. The non-GAAP operating expenses of $293 million are approximately 60% of revenue.

Keith Kennedy: Our non-GAAP gross margin range in the guidance is 71% to 73%. The non-GAAP operating expenses of $293 to $297 million, or approximately 60% of revenue, and our 2026 depreciation expense of approximately $10 million ± $1 million. Our full year guidance assumes revenue for each service, calculated at the midpoint of the range, includes testing services revenue of $400 million, inclusive of $24 million in specialty oncology revenue, patient and digital revenue of $72 million, and product revenue of $23 million.

Speaker #1: And to pre and our 2026 depreciation expense of approximately $10 million plus or minus $1 million. Our full-year guidance assumes revenue for each service calculated at the midpoint of the range includes testing services revenue of $400 million inclusive of $24 million and specialty oncology revenue patient and digital revenue of $72 million and product revenue of $23 million.

Speaker #1: Our guidance excludes the cost or expense to complete the sale of our Products business and the acquisition of Novaris. Turning to slide 17, our guidance includes $23 million of Lab Products revenue in the first half of '26 and Specialty Oncology revenue of $24 million in the second half of '26.

Keith Kennedy: Our guidance excludes the cost or expense to complete the sale of our products business and the acquisition of Naveris. Turning to slide 17, our guidance includes $23 million of lab products revenue in H1 2026, and specialty oncology revenue of $24 million in H2 2026. As I stated earlier, we completed the divestiture of our lab products business, generating $172 million in consideration and a $113 million gain on the sale. The gain is included in GAAP results and excluded from non-GAAP results. Turning to slide 18, this slide illustrates the blended ASP and revenue per test for testing services, including transplant and specialty oncology. In modeling to the midpoint of our guide range, the chart on the left shows the blended ASP and revenue per test for transplant only and shows that we are on or ahead of plan in transplant.

Speaker #1: As I stated earlier, we completed the divestiture of our lab products business generating $172 million in consideration and $113 million gain on the sale.

Speaker #1: The gain is included in GAAP results and excluded from non-GAAP results. Turning to slide 18, this slide illustrates the blended ASP and revenue per test for testing services.

Keith Kennedy: The gain is included in GAAP results and excluded from non-GAAP results. Turning to slide 18, this slide illustrates the blended ASP and revenue per test for testing services, including transplant and specialty oncology. In modeling to the midpoint of our guide range, the chart on the left shows the blended ASP and revenue per test for transplant only and shows that we are on or ahead of plan in transplant.

Speaker #1: Including specialty oncology. In modeling to the midpoint of our guide range, the chart on the left shows the blended ASP and revenue per test for transplant only.

Speaker #1: And it shows that we are on or ahead of plan in transplant. The chart on the right shows the blended ASP and revenue per test for testing services.

Keith Kennedy: The chart on the right shows the blended ASP and revenue per test for testing services. We expect revenue per test of $1,527, including $1,367 for ASP and $160 for out-of-period revenue. In modeling to the midpoint of our guide, we assume transplant average ASP per test of $1,455 in Q3 and $1,465 in Q4 at the midpoint of our guidance, and specialty oncology average ASP per test of $770 in Q3 and $795 in Q4, also at the midpoint of our guidance, and out-of-period revenue of $8 million in Q3 and $4 million in Q4. Hopefully, this is helpful detail. I'll now turn the call back over to John.

Speaker #1: We expect revenue per test of $1,527, including $1,367 for ASP and $160 for out-of-period revenue. In modeling to the midpoint of our guide, we assume transplant average ASP per test of $1,455 in Q3 and $1,465 in Q4 at the midpoint of our guidance.

Speaker #1: And specialty oncology average ASP per test of $770 in Q3 and $795 in Q4 also at the midpoint of our guidance. And out-of-period revenue of $8 million in Q3 and $4 million in Q4.

Speaker #1: Hopefully, this is helpful detail. I'll now turn the call back over to John.

Speaker #2: Thank you, Keith. We have transformed CareDx into a differentiated, precision molecular diagnostics company with a unique set of core competencies that position us for continued profitable growth.

John Hanna: Thank you, Keith. We have transformed CareDx into a differentiated precision molecular diagnostics company with a unique set of core competencies that position us for continued profitable growth. Our performance reflects that our strategy is working, and we look forward to building on our momentum as we integrate NavDx and launch into cell therapy. Before closing, I'd like to briefly again welcome the entire NavDx team to CareDx. The work they do is incredibly meaningful for patients all across the country. I'd now like to ask the operator to open the queue for Q&A. Operator?

Speaker #2: Our performance reflects that our strategy is working, and we look forward to building on our momentum as we integrate NavDx and launch into cell therapy.

Speaker #2: Before closing, I'd like to briefly again welcome the entire NavDx team to CareDx. The work they do is incredibly meaningful for patients all across the country.

Speaker #2: I'd now like to ask the operator to open the queue for Q&A. Operator?

Speaker #3: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand.

Operator 2: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. 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 the line of Tycho Peterson with Jefferies. Your line is open. Please go ahead.

Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. 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 the line of Tycho Peterson with Jefferies. Your line is open. Please go ahead.

Speaker #3: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question. To allow for optimum sound quality.

Speaker #3: 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 the line of Taiko Peterson with Jefferies.

Speaker #3: Your line is open. Please go ahead.

Speaker #4: Thanks. This is Matt on for Taiko. Maybe just to start, given the updated CMS policy that was finalized a couple of weeks ago for AlloSure and AlloMap, John, would love to just get any updated color.

[Analyst] (Jefferies): Thanks. This is Matt on for Tycho. Maybe just to start, given the updated CMS policy was finalized a couple of weeks ago for AlloSure and AlloMap, John, would love to just get any updated color. I know it's only been a short period of time here, but feedback from the field, either docs or the commercial team, any kind of early trends post the finalization of that update where it's calling out. Good to see the removal of the headwind in the back half of the year. How do we think about this going forward? Could there potentially actually be some tailwinds now that this final is finalized? I think you talked about a pathway for HistoMap coverage over time, would love just your updated thoughts post finalization here. Thanks.

Speaker #4: I know it's only been a short period of time here, but feedback from the field, either docs or the commercial team, any kind of early trends post the finalization of that update worth calling out.

Speaker #4: And then good to see the removal of the headwind in the back half of the year. I mean, how do we think about this going forward?

[Analyst] (Jefferies): Good to see the removal of the headwind in the back half of the year. How do we think about this going forward? Could there potentially actually be some tailwinds now that this final is finalized? I think you talked about a pathway for HistoMap coverage over time, would love just your updated thoughts post finalization here. Thanks.

Speaker #4: Could there potentially actually be some tailwinds now that this final is finalized? I think you talked about a pathway for HistoMap coverage over time, but would love just kind of your updated thoughts post-finalization here.

Speaker #4: Thanks.

Speaker #2: Hey, Matt. Thanks so much for joining the call. Yeah, we believe that the policy ultimately reflects the reality of the evidence supporting these products.

John Hanna: Hey, Matt. Thanks so much for joining the call. Yeah, we believe that the policy ultimately reflects the reality of the evidence supporting these products and the evidence supporting surveillance testing in kidney. We were pleased that the agency affirmed coverage for surveillance testing. We don't have any kind of feedback from the field. As I've shared before, this is really a payment policy. It's not anything that we talk with clinicians about in the field, other than instructions on how to order and how to submit their requisition forms. We didn't anticipate that it would have an impact on volume. Certainly, the positive outcome here, both for the existing products, also for the future. As we mature our HistoMap program, we publish additional evidence and prepare for CLIA launch, we'll be in position to submit that dossier for coverage of the product.

Speaker #2: And the evidence supporting surveillance testing in kidney, so we were pleased that the agency affirmed coverage for surveillance testing. We don't have any kind of feedback from the field, as I've shared before.

John Hanna: As I've shared before, this is really a payment policy. It's not anything that we talk with clinicians about in the field, other than instructions on how to order and how to submit their requisition forms. We didn't anticipate that it would have an impact on volume. Certainly, the positive outcome here, both for the existing products, also for the future. As we mature our HistoMap program, we publish additional evidence and prepare for CLIA launch, we'll be in position to submit that dossier for coverage of the product.

Speaker #2: This is really a payment policy. It's not anything that we talk with clinicians about in the field, other than kind of instructions on how to order and how to submit their requisition forms.

Speaker #2: And we didn't anticipate that it would have an impact on volume. Certainly, the positive outcome here is both for the existing products, but also for the future, right?

Speaker #2: As we mature our Histomat program, we publish additional evidence and prepare for the Clio launch, we will be in a position to submit that dossier for coverage of the product.

Speaker #4: All right, great. And then I appreciate all the color on the moving pieces related to the guide. Maybe just on the specialty oncology piece, I think the back half guide assumes volume up kind of 30% year over year.

[Analyst] (Jefferies): Appreciate all the color on the moving pieces related to the guide. On the specialty oncology piece, I think the back half guide assumes volumes are up kind of that 30% year over year. I think at the time of the deal, you said 30% to 40% the next few years. Is that just conservative starting point? I think Q1 was up low 40s for them. Any color on what volumes did there in Q2? On ASPs, I think the back half blended ASPs $780 for specialty oncology. How do we think about scope to drive that higher here into 2027? Refresh us in on some of the levers you have at your disposal to move ASPs up higher into next year as well. Thank you.

Speaker #4: I think at the time of the deal you said 30, 40% the next few years. So is that just conservative starting point? I think one Q was up low 40s for them.

Speaker #4: Any color on what volumes did there in two Q? And then just on ASPs, I think the back half blended ASPs 780 for specialty oncology.

Speaker #4: How do we think about scope to drive that higher here into 27 and maybe just refresh us on some of the levers you have at your disposal to move ASPs up higher into next year as well?

Speaker #4: Thank you.

Speaker #5: Matt, great question. The guide is, as Caroline likes to tell me, prudent. We do still believe this is a 30% to 40% growth. We'd like to, obviously by the end of the year, show that we're doing better than where I am in the guide right here.

Keith Kennedy: Matt, great question. The guide is, as Caroline likes to tell me, prudent. We do still believe this a 30% to 40% growth. We'd like to, obviously by the end of the year, show that we're doing better than where I am in the guide right here. We are just taking over the business at this point, and we are intending and in a process right now to move them to our billing system. We are trying to do that in Q4. That is a big undertaking to do that. We think we have a lot of workflows that we spent a lot of time on that are working very well. We think moving them to our claims processing, they outsource their claims processing. They have people internally, but they mostly rely on an external firm to do that.

Speaker #5: But we are just taking over the business at this point. And we are intending in a process right now to move them to our billing system.

Speaker #5: And so we are trying to do that in the fourth quarter. And so that is a big undertaking to do that. But we think we have a lot of workflows that we spent a lot of time on that are working very, very well.

Keith Kennedy: That is a big undertaking to do that. We think we have a lot of workflows that we spent a lot of time on that are working very well. We think moving them to our claims processing, they outsource their claims processing. They have people internally, but they mostly rely on an external firm to do that.

Speaker #5: So we think moving them to our claims processing they outsource their claims processing. And so they have people internally, but they mostly rely on an external firm to do that.

Speaker #5: And I need to get some time some reps with doing the billing before I feel confident in moving that number up. So I am trying to be prudent.

Keith Kennedy: I need to get some time, some reps with doing the billing before I feel confident in moving that number up. I am trying to be prudent. I do believe that number should move up to $1,000 to $1,100. They get $1,800 from Medicare, and I think as we publish more and more evidence and we continue to bill and collect under our system, I do think that will move up, and I'll have more to talk about when we do the Q4 guide as well and in the October call, hopefully. Is that helpful?

Speaker #5: I do believe that number should move up to 1,000 to 1,100 dollars. They get 1,800 dollars from Medicare. And I think as we publish more and more evidence and we continue to bill and collect under our system, I do think that will move up.

Speaker #5: And I'll have more to talk about when we do the Q4 guide as well. And in the October call, hopefully. Is that helpful?

Speaker #3: Your next question. Comes from the line of Mason Carico with Stevens, Inc. Your line is open. You may now go ahead.

Operator 2: Your next question comes from the line of Mason Carrico with Stephens, Inc. Your line is open. You may now go ahead.

Operator: Your next question comes from the line of Mason Carrico with Stephens, Inc. Your line is open. You may now go ahead.

Speaker #6: Hey, guys. Thank you for taking the questions. First, it looks like another solid quarter for the transplant business. Could you just talk about some of the factors that have driven, and I guess continue to drive, the acceleration in volume growth there?

Mason Carrico: Hey, guys. Thank you for taking the questions. First, looks like another solid quarter for the transplant business. Could you just talk about some of the factors that have driven and I guess continue to drive the acceleration in volume growth there? How's surveillance testing trending? Have for-cause volumes continued to ramp? Any additional insight into those drivers would be great.

Speaker #6: How's surveillance testing trending? Have poor cause volumes continued to ramp? Any additional insight into those drivers would be great.

Speaker #2: Hey, thanks so much for joining, Mason. Yes. Surveillance testing continues to gain ground as does for cause. We have done a really nice job helping with improved workflow in the practices which is growing the average number of surveillance tests per patient.

John Hanna: Hey, thanks so much for joining, Mason. Yes, surveillance testing continues to gain ground, as does for-cause. We have done a really nice job helping with improved workflow in the practices, which is growing the average number of surveillance tests per patient in the first year and first three years post-transplantation. Our clinical liaison team, our patient liaison team that are out there supporting the blood draw process and ensuring that the orders are submitted and the results are reviewed in the practices, have really done a remarkable job at that, and we're seeing that factor into the growth. As I described in the prepared remarks, using the testing in new contexts of use in the for-cause setting continues to expand such that we're seeing both for-cause and surveillance testing grow year over year and sequentially.

Speaker #2: In the first year, and first three years post transplantation. So our clinical liaison team our patient liaison team that are out there supporting the blood draw process and ensuring that the orders are submitted and the results are reviewed in the practices have really done a remarkable job at that.

John Hanna: Our clinical liaison team, our patient liaison team that are out there supporting the blood draw process and ensuring that the orders are submitted and the results are reviewed in the practices, have really done a remarkable job at that, and we're seeing that factor into the growth. As I described in the prepared remarks, using the testing in new contexts of use in the for-cause setting continues to expand such that we're seeing both for-cause and surveillance testing grow year over year and sequentially.

Speaker #2: And we're seeing that factor into the growth. And then, as I described in the prepared remarks, using the testing in new contexts of use, in the for-cause setting, continues to expand, such that we're seeing both for-cause and surveillance testing grow year over year and sequentially.

Speaker #5: And we remain at 50 we remain a little over 50%, Mason, on for cause on kidney.

Keith Kennedy: We remain-

Mason Carrico: Got it. Thank you

Keith Kennedy: a little over 50%, Mason, on for-cause on kidney.

Speaker #2: Perfect. Okay. Thank you. And then a higher level question. As we kind of think about the new go forward business, the growth outlook there obviously looks positive.

Mason Carrico: Perfect. Okay. Thank you. A higher level question. As we think about the new go forward business, the growth outlook there obviously looks positive. You've raised your adjusted EBITDA margin guidance for the year, but I'm just curious how you're thinking about the ability to continue expanding EBITDA margin in 2027, or maybe how you're prioritizing continuing to ramp profitability from 2026 levels and balancing that against any required investments in Naveris.

Speaker #2: And you've raised your adjusted EBITDA margin, guidance for the year. But I'm just curious how you're thinking about the ability to continue expanding EBITDA margin in 2027 or maybe how your prioritizing continuing to ramp profitability from 2026 levels and balancing that against any required investments in the various.

Speaker #5: Yeah. They're currently representing around 10% of our revenue. And we do envision investing behind the company and continuing to scale. We have a project ongoing to integrate them into Epic and Epic is going really well for us.

Keith Kennedy: Yeah. They currently represent around 10% of our revenue, we do envision investing behind the company and continuing to scale. We have a project ongoing to integrate them into Epic is going really well for us. We do think that that long term will have further support for them. We will evaluate it, but we do believe we should be running at 20% EBITDA margins long term. We do believe that. There isn't a discussion we have in the business where we don't talk about profitability as well as revenue and how to balance that. Could there be a need to put $5 to $10 million into something and that would potentially impact our margins for a year or something like that as we were ramping ASP?

Speaker #5: So we do think that, long term, we will have further support for them. We will evaluate it, but we do believe we should be running at 20% EBITDA margins long term.

Speaker #5: We do believe that. And that is there isn't a discussion we have in the business where we don't talk about profitability. As well as revenue and how to balance that.

Keith Kennedy: There isn't a discussion we have in the business where we don't talk about profitability as well as revenue and how to balance that. Could there be a need to put $5 to $10 million into something and that would potentially impact our margins for a year or something like that as we were ramping ASP?

Speaker #5: But could there be a need to put $5 to $10 million into something, and would that potentially impact our margins for a year or something like that, as we were ramping ASP?

Speaker #5: That could happen. But we're going to evaluate that in our annual operating planning, which we've already started. We'll have more to talk about, if not on the Q3 call, then on the Q4 call.

Keith Kennedy: That could happen, but we're going to evaluate that in our annual operating planning, which we've already started, and we'll have more to talk about, if not on the Q3 call, on the Q4 call.

Speaker #3: Your next question comes from the line of Bill Benello with Craig Hullum. Your line is open. You may go ahead.

Operator 2: Your next question comes from the line of Bill Bonello with Craig Hallum. Your line is open.

Operator: Your next question comes from the line of Bill Bonello with Craig Hallum. Your line is open.

Bill Bonello: Hey, guys.

Operator 2: You may go ahead.

Operator: You may go ahead.

Bill Bonello: Oh. Hey, guys.

Speaker #4: Hey, guys. Thank you for providing the color, particularly the bridge with all the moving parts. I just want to see if I have my math right here.

Keith Kennedy: Hey, Bill.

Bill Bonello: Providing the color, particularly the bridge with all the moving parts. I just want to see if I have my math right here, and I hope you can follow me. If I add and subtract all the moving parts, it looks to me like the non-acquisition raise for H2 of the year is about $17 to $18 million. If we take out the LCD impact, it's maybe about $10 million. If we take out the raise in Patient Digital, it looks like you're keeping the guidance for transplant testing roughly flat in H2 of the year. Do I have my math about right there?

Speaker #4: And I hope you can follow me. But if I'm sort of add and subtract all the moving parts, it looks to me like the non-acquisition raise for the second half of the year is about 17 to 18 million.

Speaker #4: If we take out the LCD impact, it's maybe about 10 million. If we take out the raise in patient and digital, it looks like you're keeping the guidance for transplant testing roughly flat in the back half of the year too.

Speaker #4: Do I have my math about right there?

Speaker #5: I don't think so. Let me walk through some numbers and see if you have those right. We had $23 million in product, and we have $24 million in specialty oncology.

Keith Kennedy: I don't think so. Let me walk through some numbers and see if you have those right. We had $23 million in Product, and we have $24 million in Specialty Oncology. That should have been right in line with where we talked on the last quarter. We said $45 to $50 million. That should add up to $47 million. Right. The out-of-period number is all on our Testing Services. We had seven and a half. Our guide last quarter on out-of-period in Q2 was $7.5 million, and we had $15.5 million. We had an $8 million beat in this quarter. I increased, I think, our cash collections versus our AR. I think we're going to have $8 million in Q3 and $4 million in Q4.

Speaker #5: So that should have been right in line with where we talked on the last quarter. We said 45 to 50 million. So that should add up to 47 million.

Speaker #5: Right. And then the out-of-period number is all on our testing services. So we had 7 and a half our guide last quarter on out-of-period in Q2 was 7 and a half million.

Speaker #5: And we had 15 and a half million. So we had an 8 million dollar beat in this quarter. And then I increased I think the I think our cash collections verse our AR.

Speaker #5: I think we're going to have 8 million in Q3 and 4 million in Q4. And then our testing number for our transplant business at the midpoint of the guide is 376 million.

Keith Kennedy: Our testing number for our transplant business at the midpoint of the guide is $376 million. The $376 plus the $24 in Specialty Oncology is what gets you to $400 on Testing Services. We'll have $72 million on Patient Digital and $23 million on Products, and that gets you to $495.

Speaker #5: So the 376 plus the 24 in specialty oncology is what gets you to 400 on testing services. And then we'll have 72 million on patient digital and 23 million on products.

Speaker #5: And that gets you to 495.

Speaker #4: Yep. Okay. That's helpful. I think the difference might be I was backing out quarter. But anyway, we can follow up. I guess more importantly, can you give us any color on similar color as you did on sort of the moving parts that impacted your adjusted EBITDA guide and maybe how we should be thinking about gross margin?

Bill Bonello: Yep. Okay. That is helpful.

Keith Kennedy: Okay.

Bill Bonello: I think the difference might be I was backing out the beat from this quarter. Anyway, we can follow up. I guess more importantly, can you give us any similar color as you did on sort of the moving parts that impacted your adjusted EBITDA guide and maybe how we should be thinking about gross margin?

Speaker #5: So our gross margin without out-of-period is around 70, 71 percent. And so the difference between that and 74 percent what we reported is due to the out-of-period.

Keith Kennedy: Our gross margin without out-of-period is around 70% and 71%. The difference between that and 74%, what we reported, is due to the out-of-period. We continue to do very well on the margin, so I think we are pretty comfortable in that, I would say 69% to 71% range, excluding out-of-period. Our margins on our testing business alone is in the high, almost 80%. We are at 79% margins, and that is what I have in the guide. The margins on specialty oncology, I am guiding at 63%. We are in the middle of putting them on our system. They generally can get to 65% margin right now. I have a little bit of prudency as the key word is on the margins there. Is that helpful? Then the margins on patient digital, I have at 26% at the midpoint.

Speaker #5: We continue to do very well on the margin, so I think we're pretty comfortable with that. I always say 69 to 71 percent range, excluding out-of-period.

Speaker #5: But our margins on our testing business alone is in the almost 80 percent. So we're at 79 percent margins. And that's what I have in that's what I have in the guide.

Keith Kennedy: We are at 79% margins, and that is what I have in the guide. The margins on specialty oncology, I am guiding at 63%. We are in the middle of putting them on our system. They generally can get to 65% margin right now. I have a little bit of prudency as the key word is on the margins there. Is that helpful? Then the margins on patient digital, I have at 26% at the midpoint.

Speaker #5: The margins on specialty oncology I'm guiding at 63 percent. We're in the middle of putting them on our system, and so they generally can get to 65 percent margin right now.

Speaker #5: So, I have a little bit of prudency. So, the key word is on the margins there. Is that helpful? And then the margins on Patient Digital, I have at 26 percent at the midpoint.

Speaker #4: Yep. And it seems like, from an EBITDA standpoint, based on the guide, you’ve probably been able to effectively get rid of—or you're not stuck with—a bunch of overhead that was being covered by the products business.

Bill Bonello: Yep. It seems like from an EBITDA standpoint, based on the guide, you probably have been effectively able to get rid of. You are not stuck with a bunch of overhead that was being covered by the products business.

Speaker #5: Yeah. The sale of the products business if you can we have someone on our board who loves this stuff. But we talk about the cash cycle.

Keith Kennedy: Yeah. The sale of the products business, we have someone on our board who loves this stuff, but we talk about the cash cycle. We had a 70-day improvement in our cash cycle moving to just CLIA only, because that business had high inventory and things like that you would have in a kit business.

Speaker #5: We had like a 70-day improvement in our cash cycle moving to just Kalia only. Because that business had and things like that that you would have in a kit business.

Bill Bonello: Yep.

Speaker #5: And so there's just a lot of overhead. For example, my regulatory team took three times the number of people to do the same amount of work on the kit business that we do on the Kalia business.

Keith Kennedy: There's just a lot of overhead. My regulatory team, it took 3x the number of people to do the same amount of work on the kit business that we do on the CLIA business, due to the high regulatory burden on an IVD kit business. Almost no matter what you do, you need 15 to 20 people in a kit business just on the regulatory and quality side.

Speaker #5: Due to the high regulatory burden on an IVD kit business, almost no matter what you do, you need 15 to 20 people in a kit business just on the regulatory and quality side.

Speaker #4: Perfect. All right. Thank you. That was really helpful.

Bill Bonello: Perfect. All right. Thank you. That was really helpful.

Speaker #5: Okay. Thank you, Bill.

Keith Kennedy: Okay. Thank you, Bill.

Speaker #3: Just a reminder. If you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Yi Chen with HC Wainwright & Co.

Operator 2: Just a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Yi Chen with H.C. Wainwright & Co. Your line is open. Please go ahead.

Operator: Just a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Yi Chen with H.C. Wainwright & Co. Your line is open. Please go ahead.

Speaker #3: Your line is open. Please go ahead.

Speaker #5: Thank you for taking my questions. So for the second quarter, you reported 16 million in prior period revenue. So can you talk about what are your expectations regarding prior period recognized revenue in the second half, particularly considering the final LCD will be effective on August the 30th?

Yi Chen: Thank you for taking my questions. For Q2, you reported $16 million in prior period revenue. Can you talk about what are your expectations regarding prior period recognized revenue in H2, particularly considering the final LCD will be effective on 30 August. Also, the 58,000 volume of tests in Q2, are they generally all covered under the new final LCD? Thank you.

Speaker #5: And also, the 58,000 volume of tests in the second quarter, are they generally all covered under the new final LCD? Thank you. Yeah. So I don't—the LCD goes into effect at the end of August.

Keith Kennedy: Yeah. The LCD goes into effect at the end of August. I think our tests are covered for five years. Any impact the LCD, we feel we have covered in our guide. I'm not worried there. On the out-of-period, Q3 and Q4, which I stated in my prepared remarks, I have out-of-period revenue in Q3 I'm guiding to $8 million. In Q4, $4 million. Does that answer your question, Yi?

Speaker #5: And so I'm not and I think our tests are covered for five years. And any impact the LCD, we we feel we have covered in our guide.

Speaker #5: So I'm not worried there. On the out-of-period, the Q3 and Q4, which I stated in my prepared remarks, I have out-of-period revenue in Q3.

Speaker #5: I'm guiding to $8 million. And in Q4, $4 million. Does that answer your question, Yi?

Speaker #2: Yes. Thank you.

Yi Chen: Yes. Thank you.

Speaker #5: Okay. But we did in terms of the 58,000. I think the more important question there is when we raise the 58, the guide does have 58 in Q3.

Keith Kennedy: Okay. We did, in terms of the 58,000, I think the more important question there is when we raised the 58, the guide does have 58 in Q3, so we lifted the guide from the prior quarter of 56.6 in Q3. We lifted that from 56.6 to 58 on the testing side on transplant.

Speaker #5: So, we lifted the guide from the prior quarter of 56,600 in Q3. We lifted that from 56,600 to 58,000 on the testing side in transplant.

Speaker #2: Got it. Just a follow-up on the various.

Yi Chen: Got it. Just a follow-up on Naveris. Once you've fully incorporated the operations of Naveris, would you have a dedicated sales team just focused on NavDx products?

Speaker #5: So, once you fully incorporated the operations of the various, would you have a dedicated sales team just focused on those Dx products?

Speaker #4: Yeah. Thanks, Yi Chen. There is a dedicated sales team focused just on the NavDX products today. And we talked about as a part of be expanding that team.

Keith Kennedy: Yeah. Thanks, Yi Chen. There is a dedicated sales team focused just on the NavDx products today. We talked about, as a part of the acquisition announcement, that we would be expanding that team, to really ensure that we were reaching all of the providers that could potentially order the test and driving up the utilization of the product on a per-patient basis.

Speaker #4: To really ensure that we were reaching all of the providers that could potentially order the test and driving up the utilization of the product on a per-patient basis.

Speaker #5: Okay. Thank you.

Yi Chen: Okay. Thank you.

Speaker #4: Great. Thank you.

Keith Kennedy: Great. Thank you.

Speaker #3: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Operator 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.

Operator 1: This event has now concluded. Thank you for joining CareDx Q2 2026 Earnings Call. The line will disconnect automatically.

Q2 2026 CareDx Inc Earnings Call

Request DemoDemo

CareDx

Earnings