CareDx Reports Third Quarter 2024 Results and Raises Revenue Guidance
Third Quarter 2024 Financial Highlights
-
Total revenue of
$82.9 million increased 23% year-over-year - Testing Services volume of 44,600 tests increased 16% year-over-year
-
GAAP net loss of
$7.4 million , non-GAAP net income of$8.0 million , and positive adjusted EBITDA of$6.9 million , a significant improvement from the third quarter 2023 -
Cash flow from operations of
$12.5 million . Cash, cash equivalents, and marketable securities of$241 million , with no debt -
Raised annual revenue guidance to
$327 to$331 million and adjusted EBITDA to a gain of$18 to$22 million
Business Highlights
- CMS reaffirmed longstanding Medicare coverage for AlloSure® and AlloMap® Testing
- Surveillance testing mix in kidney began to increase in the second half of September and continued through October
-
Hired industry veterans
Keith Kennedy , Chief Operating Officer;Jessica Meng , Chief Commercial Officer; andJing Huang , PhD, Chief Data and AI Officer - Announced the launch of the next generation of Assign software for AlloSeq™ Tx HLA typing and enhancements to QTYPE® rapid typing solution for deceased donor HLA typing
-
DOJ concluded its investigation into
CareDx with no finding of wrongdoing
"
Third Quarter 2024 Financial Results
Total revenue for the three months ended
For the third quarter of 2024 net loss was
Non-GAAP net income was
Adjusted EBITDA income for the third quarter of 2024 was
2024 Guidance
About
Forward Looking Statements
This press release includes forward-looking statements, including expectations regarding CareDx’s 2024 revenue, and non-GAAP gross margin and adjusted EBITDA. These forward-looking statements are based upon information that is currently available to
Use of Non-GAAP Financial Measures
We define non-GAAP net income (loss) and per share results as the GAAP net loss and per share results excluding the impacts of stock-based compensation; changes in estimated fair value of contingent consideration; acquisition-related impairment charges and amortization of purchased intangible assets and related tax effects; costs involved with completing an acquisition; unrealized loss on investments; restructuring charges and certain other charges.
We define adjusted EBITDA as non-GAAP net income (loss) before interest income, income tax expense (benefit), depreciation and other (income) expense, net. We are presenting these non-GAAP financial measures to assist investors in assessing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods. Management believes this non-GAAP information is useful for investors, when considered in conjunction with CareDx’s GAAP financial statements, because management uses such information internally for its operating, budgeting, and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of CareDx’s operating results as reported under GAAP. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not necessarily comparable to similarly titled measures presented by other companies. A reconciliation between GAAP and non-GAAP financial information is provided immediately following the financial tables.
Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Testing services revenue |
$ |
60,807 |
|
|
$ |
47,784 |
|
|
$ |
185,562 |
|
|
$ |
162,982 |
|
Product revenue |
|
10,212 |
|
|
|
9,536 |
|
|
|
29,416 |
|
|
|
24,273 |
|
Patient and digital solutions revenue |
|
11,864 |
|
|
|
9,872 |
|
|
|
32,228 |
|
|
|
27,500 |
|
Total revenue |
|
82,883 |
|
|
|
67,192 |
|
|
|
247,206 |
|
|
|
214,755 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Cost of testing services |
|
13,447 |
|
|
|
13,217 |
|
|
|
41,387 |
|
|
|
43,837 |
|
Cost of product |
|
6,212 |
|
|
|
4,750 |
|
|
|
17,801 |
|
|
|
12,742 |
|
Cost of patient and digital solutions |
|
7,913 |
|
|
|
6,566 |
|
|
|
22,264 |
|
|
|
19,807 |
|
Research and development |
|
17,486 |
|
|
|
19,000 |
|
|
|
55,875 |
|
|
|
63,590 |
|
Sales and marketing |
|
19,802 |
|
|
|
18,474 |
|
|
|
60,634 |
|
|
|
63,335 |
|
General and administrative |
|
28,515 |
|
|
|
33,968 |
|
|
|
83,104 |
|
|
|
91,327 |
|
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
68 |
|
|
|
848 |
|
Total operating expenses |
|
93,375 |
|
|
|
95,975 |
|
|
|
281,133 |
|
|
|
295,486 |
|
Loss from operations |
|
(10,492 |
) |
|
|
(28,783 |
) |
|
|
(33,927 |
) |
|
|
(80,731 |
) |
Other income: |
|
|
|
|
|
|
|
||||||||
Interest income, net |
|
3,001 |
|
|
|
3,171 |
|
|
|
8,712 |
|
|
|
8,708 |
|
Change in estimated fair value of common stock warrant liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
Other income (expense), net |
|
283 |
|
|
|
2,047 |
|
|
|
(107 |
) |
|
|
(198 |
) |
Total other income |
|
3,284 |
|
|
|
5,218 |
|
|
|
8,605 |
|
|
|
8,520 |
|
Loss before income taxes |
|
(7,208 |
) |
|
|
(23,565 |
) |
|
|
(25,322 |
) |
|
|
(72,211 |
) |
Income tax (expense) benefit |
|
(200 |
) |
|
|
80 |
|
|
|
(139 |
) |
|
|
24 |
|
Net loss |
$ |
(7,408 |
) |
|
$ |
(23,485 |
) |
|
$ |
(25,461 |
) |
|
$ |
(72,187 |
) |
Net loss per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.14 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.34 |
) |
Diluted |
$ |
(0.14 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.34 |
) |
Weighted-average shares used to compute net loss per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
52,903,338 |
|
|
|
54,178,759 |
|
|
|
52,266,106 |
|
|
|
53,891,374 |
|
Diluted |
|
52,903,338 |
|
|
|
54,178,759 |
|
|
|
52,266,106 |
|
|
|
53,891,374 |
|
Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
95,400 |
|
|
$ |
82,197 |
|
Marketable securities |
|
145,453 |
|
|
|
153,221 |
|
Accounts receivable |
|
66,627 |
|
|
|
51,061 |
|
Inventory |
|
19,263 |
|
|
|
19,471 |
|
Prepaid and other current assets |
|
7,344 |
|
|
|
7,763 |
|
Total current assets |
|
334,087 |
|
|
|
313,713 |
|
Property and equipment, net |
|
34,015 |
|
|
|
35,246 |
|
Operating leases right-of-use assets |
|
25,823 |
|
|
|
29,891 |
|
Intangible assets, net |
|
40,361 |
|
|
|
45,701 |
|
|
|
40,336 |
|
|
|
40,336 |
|
Restricted cash |
|
592 |
|
|
|
586 |
|
Other assets |
|
1,771 |
|
|
|
1,353 |
|
Total assets |
$ |
476,985 |
|
|
$ |
466,826 |
|
Liabilities and stockholders’ equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
6,239 |
|
|
$ |
12,872 |
|
Accrued compensation |
|
29,915 |
|
|
|
19,703 |
|
Accrued and other liabilities |
|
45,286 |
|
|
|
45,497 |
|
Total current liabilities |
|
81,440 |
|
|
|
78,072 |
|
Deferred tax liability |
|
202 |
|
|
|
136 |
|
Deferred payments for intangible assets |
|
1,310 |
|
|
|
2,461 |
|
Operating lease liability, less current portion |
|
23,841 |
|
|
|
28,278 |
|
Other liabilities |
|
96,946 |
|
|
|
96,551 |
|
Total liabilities |
|
203,739 |
|
|
|
205,498 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Common stock |
|
50 |
|
|
|
49 |
|
Additional paid-in capital |
|
984,627 |
|
|
|
946,511 |
|
Accumulated other comprehensive loss |
|
(7,179 |
) |
|
|
(6,963 |
) |
Accumulated deficit |
|
(704,252 |
) |
|
|
(678,269 |
) |
Total stockholders’ equity |
|
273,246 |
|
|
|
261,328 |
|
Total liabilities and stockholders’ equity |
$ |
476,985 |
|
|
$ |
466,826 |
|
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (In thousands) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Cost of testing services reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP cost of testing services |
$ |
13,447 |
|
|
$ |
13,217 |
|
|
$ |
41,387 |
|
|
$ |
43,837 |
|
Stock-based compensation expense |
|
(418 |
) |
|
|
(496 |
) |
|
|
(1,232 |
) |
|
|
(1,467 |
) |
Acquisition related-amortization of purchased intangibles |
|
(329 |
) |
|
|
(329 |
) |
|
|
(987 |
) |
|
|
(987 |
) |
Non-GAAP cost of testing services |
$ |
12,700 |
|
|
$ |
12,392 |
|
|
$ |
39,168 |
|
|
$ |
41,383 |
|
Cost of product reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP cost of product |
$ |
6,212 |
|
|
$ |
4,750 |
|
|
$ |
17,854 |
|
|
$ |
12,742 |
|
Stock-based compensation expense |
|
(234 |
) |
|
|
(301 |
) |
|
|
(776 |
) |
|
|
(935 |
) |
Acquisition related-amortization of purchased intangibles |
|
(419 |
) |
|
|
(408 |
) |
|
|
(1,250 |
) |
|
|
(1,242 |
) |
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
(53 |
) |
|
|
— |
|
Non-GAAP cost of product |
$ |
5,559 |
|
|
$ |
4,041 |
|
|
$ |
15,775 |
|
|
$ |
10,565 |
|
Cost of patient and digital solutions reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP cost of patient and digital solutions |
$ |
7,913 |
|
|
$ |
6,566 |
|
|
$ |
22,264 |
|
|
$ |
19,821 |
|
Stock-based compensation expense |
|
(326 |
) |
|
|
(297 |
) |
|
|
(1,048 |
) |
|
|
(1,066 |
) |
Acquisition related-amortization of purchased intangibles |
|
(170 |
) |
|
|
(265 |
) |
|
|
(679 |
) |
|
|
(768 |
) |
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
Other income |
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Non-GAAP cost of patient and digital solutions |
$ |
7,417 |
|
|
$ |
6,004 |
|
|
$ |
20,542 |
|
|
$ |
17,973 |
|
Research and development expenses reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP research and development expenses |
$ |
17,486 |
|
|
$ |
19,000 |
|
|
$ |
55,890 |
|
|
$ |
63,835 |
|
Stock-based compensation expense |
|
(1,775 |
) |
|
|
(1,491 |
) |
|
|
(5,163 |
) |
|
|
(5,157 |
) |
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
(245 |
) |
Other charges |
|
— |
|
|
|
— |
|
|
|
(25 |
) |
|
|
— |
|
Non-GAAP research and development expenses |
$ |
15,711 |
|
|
$ |
17,509 |
|
|
$ |
50,687 |
|
|
$ |
58,433 |
|
Sales and marketing expenses reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP sales and marketing expenses |
$ |
19,802 |
|
|
$ |
18,474 |
|
|
$ |
60,634 |
|
|
$ |
63,883 |
|
Stock-based compensation expense |
|
(2,786 |
) |
|
|
(3,041 |
) |
|
|
(8,757 |
) |
|
|
(9,557 |
) |
Acquisition related-amortization of purchased intangibles |
|
(634 |
) |
|
|
(616 |
) |
|
|
(1,895 |
) |
|
|
(1,817 |
) |
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(548 |
) |
Other charges |
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
Non-GAAP sales and marketing expenses |
$ |
16,382 |
|
|
$ |
14,817 |
|
|
$ |
49,974 |
|
|
$ |
51,961 |
|
General and administrative expenses reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP general and administrative expenses |
$ |
28,515 |
|
|
$ |
33,968 |
|
|
$ |
83,104 |
|
|
$ |
91,368 |
|
Stock-based compensation expense |
|
(8,155 |
) |
|
|
(7,045 |
) |
|
|
(23,232 |
) |
|
|
(20,943 |
) |
Change in estimated fair value of contingent consideration |
|
(232 |
) |
|
|
(1,243 |
) |
|
|
(761 |
) |
|
|
(1,731 |
) |
Acquisition related fees and expenses |
|
— |
|
|
|
(253 |
) |
|
|
(40 |
) |
|
|
(537 |
) |
Restructuring costs and charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(41 |
) |
Other (charges) income |
|
— |
|
|
|
(6 |
) |
|
|
22 |
|
|
|
(64 |
) |
Non-GAAP general and administrative expenses |
$ |
20,128 |
|
|
$ |
25,421 |
|
|
$ |
59,093 |
|
|
$ |
68,052 |
|
Total other income (expense) reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP other income, net |
$ |
3,284 |
|
|
$ |
5,218 |
|
|
$ |
8,605 |
|
|
$ |
8,520 |
|
Unrealized gain on long-term marketable equity securities |
|
— |
|
|
|
333 |
|
|
|
— |
|
|
|
1,190 |
|
Asset impairments and write-downs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
Other charges |
|
— |
|
|
|
(2,109 |
) |
|
|
— |
|
|
|
(2,081 |
) |
Non-GAAP other income, net |
$ |
3,284 |
|
|
$ |
3,442 |
|
|
$ |
8,605 |
|
|
$ |
8,629 |
|
Income tax (expense) benefit reconciliation: |
|
|
|
|
|
|
|
||||||||
GAAP income tax (expense) benefit |
$ |
(200 |
) |
|
$ |
80 |
|
|
$ |
(139 |
) |
|
$ |
24 |
|
Tax effect related to amortization of purchased intangibles |
|
(102 |
) |
|
|
(98 |
) |
|
|
(302 |
) |
|
|
(299 |
) |
Non-GAAP income tax expense |
$ |
(302 |
) |
|
$ |
(18 |
) |
|
$ |
(441 |
) |
|
$ |
(275 |
) |
GAAP and Non-GAAP Operating Expenses (Unaudited) (In thousands) |
|||||||||||
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
GAAP operating expenses: |
|
|
|
|
|
|
|
||||
Research and development |
$ |
17,486 |
|
$ |
19,000 |
|
$ |
55,890 |
|
$ |
63,835 |
Sales and marketing |
|
19,802 |
|
|
18,474 |
|
|
60,634 |
|
|
63,883 |
General and administrative |
|
28,515 |
|
|
33,968 |
|
|
83,104 |
|
|
91,368 |
Total GAAP operating expenses |
$ |
65,803 |
|
$ |
71,442 |
|
$ |
199,628 |
|
$ |
219,086 |
|
|
|
|
|
|
|
|
||||
Non-GAAP operating expenses: |
|
|
|
|
|
|
|
||||
Research and development |
$ |
15,711 |
|
$ |
17,509 |
|
$ |
50,687 |
|
$ |
58,433 |
Sales and marketing |
|
16,382 |
|
|
14,817 |
|
|
49,974 |
|
|
51,961 |
General and administrative |
|
20,128 |
|
|
25,421 |
|
|
59,093 |
|
|
68,052 |
Total Non-GAAP operating expenses |
$ |
52,221 |
|
$ |
57,747 |
|
$ |
159,754 |
|
$ |
178,446 |
Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin (Unaudited) (In thousands, except percentages) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Total revenue |
$ |
82,883 |
|
|
$ |
67,192 |
|
|
$ |
247,206 |
|
|
$ |
214,755 |
|
GAAP cost of sales |
|
27,572 |
|
|
|
24,533 |
|
|
|
81,505 |
|
|
|
76,400 |
|
GAAP gross profit |
|
55,311 |
|
|
|
42,659 |
|
|
|
165,701 |
|
|
|
138,355 |
|
Stock-based compensation expense |
|
978 |
|
|
|
1,094 |
|
|
|
3,056 |
|
|
|
3,468 |
|
Other income |
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
Restructuring costs |
|
— |
|
|
|
— |
|
|
|
53 |
|
|
|
14 |
|
Acquisition related-amortization of purchased intangibles |
|
918 |
|
|
|
1,002 |
|
|
|
2,916 |
|
|
|
2,997 |
|
Non-GAAP gross profit |
$ |
57,207 |
|
|
$ |
44,755 |
|
|
$ |
171,721 |
|
|
$ |
144,834 |
|
Non-GAAP gross margin % |
|
69 |
% |
|
|
67 |
% |
|
|
69 |
% |
|
|
67 |
% |
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
GAAP net loss |
$ |
(7,408 |
) |
|
$ |
(23,485 |
) |
|
$ |
(25,461 |
) |
|
$ |
(72,187 |
) |
Stock-based compensation expense |
|
13,694 |
|
|
|
12,671 |
|
|
|
40,208 |
|
|
|
39,125 |
|
Acquisition related-amortization of purchased intangibles |
|
1,552 |
|
|
|
1,618 |
|
|
|
4,811 |
|
|
|
4,814 |
|
Change in estimated fair value of contingent consideration |
|
232 |
|
|
|
1,243 |
|
|
|
761 |
|
|
|
1,731 |
|
Acquisition related fees and expenses |
|
— |
|
|
|
253 |
|
|
|
40 |
|
|
|
537 |
|
Other (gains) charges |
|
— |
|
|
|
(2,109 |
) |
|
|
6 |
|
|
|
(2,081 |
) |
Restructuring costs and charges |
|
— |
|
|
|
6 |
|
|
|
68 |
|
|
|
912 |
|
Tax effect related to amortization of purchased intangibles |
|
(102 |
) |
|
|
(98 |
) |
|
|
(302 |
) |
|
|
(299 |
) |
Asset impairments and write-downs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
Unrealized loss on long-term marketable equity securities |
|
— |
|
|
|
333 |
|
|
|
— |
|
|
|
1,190 |
|
Non-GAAP net income (loss) |
$ |
7,968 |
|
|
$ |
(9,568 |
) |
|
$ |
20,131 |
|
|
$ |
(25,258 |
) |
|
|
|
|
|
|
|
|
||||||||
GAAP basic and diluted net loss per share |
$ |
(0.14 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.34 |
) |
|
|
|
|
|
|
|
|
||||||||
Non-GAAP basic net income (loss) per share |
$ |
0.15 |
|
|
$ |
(0.18 |
) |
|
$ |
0.39 |
|
|
$ |
(0.47 |
) |
Non-GAAP diluted net income (loss) per share |
$ |
0.14 |
|
|
$ |
(0.18 |
) |
|
$ |
0.36 |
|
|
$ |
(0.47 |
) |
|
|
|
|
|
|
|
|
||||||||
Shares used in computing non-GAAP basic net income (loss) per share |
|
52,903,338 |
|
|
|
54,178,759 |
|
|
|
52,266,106 |
|
|
|
53,891,374 |
|
Shares used in computing non-GAAP diluted net income (loss) per share |
|
57,699,624 |
|
|
|
54,178,759 |
|
|
|
55,609,263 |
|
|
|
53,891,374 |
|
Reconciliation of Non-GAAP to Adjusted EBITDA (Unaudited) (In thousands) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Non-GAAP net income (loss) |
$ |
7,968 |
|
|
$ |
(9,568 |
) |
|
$ |
20,131 |
|
|
$ |
(25,258 |
) |
Interest income |
|
(3,001 |
) |
|
|
(3,171 |
) |
|
|
(8,712 |
) |
|
|
(8,708 |
) |
Income tax expense (benefit) |
|
302 |
|
|
|
(214 |
) |
|
|
441 |
|
|
|
275 |
|
Depreciation expense |
|
1,919 |
|
|
|
2,044 |
|
|
|
6,024 |
|
|
|
5,904 |
|
Other (income) expense, net |
|
(283 |
) |
|
|
(40 |
) |
|
|
107 |
|
|
|
79 |
|
Adjusted EBITDA |
$ |
6,905 |
|
|
$ |
(10,949 |
) |
|
$ |
17,991 |
|
|
$ |
(27,708 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241104115097/en/
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