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CareDx, Inc. (CDNA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $84.7M (+18% YoY) with non-GAAP diluted EPS of $0.09 and adjusted EBITDA of $4.6M; management reaffirmed FY25 revenue guidance of $365–$375M and adjusted EBITDA of $29–$33M .
  • Testing Services drove growth: $61.9M (+15% YoY) on ~47,100 tests (+12% YoY), marking the seventh straight quarter of sequential volume gains; Patient & Digital Solutions (+24% YoY) and Products (+26% YoY) also grew .
  • Company ended Q1 with $231M cash and no debt; non-GAAP gross margin expanded to 68.5% (+150 bps YoY) on pricing/operational leverage .
  • Key catalysts: new PLA/CPT code for AlloSure enabling in-network conversions and ASP uplift; Epic Aura integration targeting frictionless ordering by year-end; ongoing payer coverage and protocol re-adoption expected to accelerate volumes through 2025 .
  • Wall Street context: Revenue slightly above consensus ($84.7M vs $84.5M*) and EPS beat ($0.09–$0.10 vs $0.068*), supporting a constructive near-term narrative on execution and margin trajectory. Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Volume and revenue growth across all organs; Testing Services volumes ~47,100 (+12% YoY) and adjusted Testing Services revenue $63.0M (+26% YoY comparable) despite AR clean-up, with non-GAAP gross margin at 68.5% (+150 bps YoY) .
  • Strategic initiatives: new AlloSure indications (pediatric heart; SPK kidney), strong evidence momentum (SHORE, KOAR), and expanded covered lives; management: “We had another strong quarter… continued progress in surveillance testing protocol adoption…” .
  • Operational leverage: positive adjusted EBITDA ($4.6M) vs loss last year; disciplined OpEx, with revamped revenue cycle management driving ASP and collections; ASP expansion cited in Testing Services margin gains .

What Went Wrong

  • GAAP net loss of $10.4M (–$0.19 diluted EPS) given litigation settlement expense ($5.36M) and seasonality/comp resets; cash from ops negative in Q1 due to annual bonus timing though FY cash generation expected .
  • Weather impacts reduced Q1 Testing Services volumes by ~500–600 tests (~1pt of growth); aged receivables write-off of $1.1M reduced Testing Services GAAP revenue .
  • Macro/tariffs: April 2 tariff actions expected to have < $1M annual COGS impact in Lab Products; minor but a headwind to product gross margin .

Financial Results

Core P&L and Margins vs Prior Quarters and Consensus

MetricQ3 2024Q4 2024Q1 2025Notes
Revenue ($USD Millions)$82.9 $86.6 $84.7 Slightly above Q1 consensus $84.5M*
GAAP Diluted EPS ($)$(0.20)*$1.51 $(0.19) Seasonality and settlement drove GAAP loss
Non-GAAP Diluted EPS ($)—$0.18 $0.09 Above Q1 consensus $0.068*
Non-GAAP Gross Margin (%)69.0 69.0 68.5 +150 bps YoY in Q1
Adjusted EBITDA ($USD Millions)$6.9 $9.8 $4.6 Positive YoY inflection maintained

Values marked with * retrieved from S&P Global.

Segment Revenue Breakdown

Segment ($USD Millions)Q3 2024Q4 2024Q1 2025
Testing Services$60.8 $63.8 $61.9 (adj. $63.0)
Patient & Digital Solutions$11.9 $11.4 $12.0
Product$10.2 $11.4 $10.8
Total Revenue$82.9 $86.6 $84.7

KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
Testing Services Volume (tests)~44,600 ~45,500 ~47,100
Cash, Cash Equivalents & Marketable Securities ($M)$241 $261 $231
Net DebtNone None None

Actual vs Wall Street Consensus (Q1 2025)

MetricActualConsensusSurprise
Revenue ($USD Millions)$84.7 $84.5*Beat (small)
Primary EPS (Non-GAAP) ($)$0.09 (diluted) ; $0.10 (basic) $0.068*Beat (meaningful)
EBITDA ($USD Millions)Adjusted EBITDA $4.6 EBITDA $2.67*Beat; note definitional difference (Adjusted vs EBITDA)*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$365–$375 $365–$375 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$29–$33 $29–$33 Maintained
Testing Volumes (Sequential Growth)Q2/Q3/Q4 2025Indicated at Q4 call: +5–6%, +2–3%, +5–6% Reiterated Q1 call Maintained
Blended ASP ($/test)FY 2025~$1,360 ~$1,360 Maintained
Non-GAAP Gross Margin (%)FY 2025~70% ~70% Maintained
Operating Expenses ($USD Millions)FY 2025~$235 ~$235 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Surveillance Protocols (Kidney)Re-adoption expected over 2–3 quarters; modest mix shift in Sep–Oct; 10 centers initiated protocols Continued progress; surveillance volumes expected to impact Q2; muted Q1 due to weather/fires Positive momentum building
Market Access & Coverage+31M covered lives; Highmark coverage; ASP expansion expected New PLA/CPT code active Apr 1; converted 6 contracts; in-network with large BCBS plan (~3M lives); +15.5M AlloSure and +3.5M AlloMap covered lives added in Q1 Strengthening; supports ASP
Epic Aura IntegrationStrategic 2025 goal Environment taken early Apr; pilots from July; broad launch Q4; ~$5M annual cost; per-click fee Accelerating
Tariffs/MacroHurricane Milton (1% volume impact) April 2 tariffs: < $1M annual COGS impact; primarily EU-manufactured product imports Minor headwind
Litigation/LegalDOJ closed probe; patent verdict reversed; share buyback program Securities class action settlement in principle $20.25M, ~$14.9M insurer coverage, ~$5.4M out-of-pocket; aiming to close De-risking; manageable cash impact
R&D Execution (AlloHeme)Interim data; pipeline advancing Interim 1-year readout shows earlier relapse detection vs SOC; foundation for Medicare coverage post-2026 Advancing
Lung Evidence (AlloSure Lung)—New ISHLT ALAMO data: dd-cfDNA prognostic of CLAD; surveillance detects rejection and monitors treatment response Strong evidence tailwind
AI/Tech (AlloView; Quality Reporting)XynQAPI for IOTA; AlloView risk model; Assign 2.0/Score 7 plans XynQAPI timed for IOTA July start; Epic Aura integration; depositions indicate customer enthusiasm Building ecosystem synergies

Management Commentary

  • “We had another strong quarter marked by growth across all organs, led by kidney surveillance testing… we saw continued progress in surveillance testing protocol adoption that we anticipate will have an impact in Q2.” — John Hanna, CEO .
  • “Our non-GAAP Testing Services gross margin was 76.7%… improvement… primarily driven by ASP expansion.” — Abhishek Jain, CFO .
  • “We believe the combination of additional published evidence, coverage gains and in-network contracts will lead to ASP gains in future quarters.” — John Hanna .
  • “We will have [Epic Aura] fully launched… deploy with customers by end of Q2, pilot launches July 1, broad launch starting in Q4.” — Keith Kennedy, COO .

Q&A Highlights

  • Surveillance trajectory: No pull-forward; Q2 impact expected as protocols re-initiate; centers ramp new patients first-year post-transplant .
  • OpEx composition: Non-GAAP OpEx +6% YoY vs +18% revenue; higher S&M investments to accelerate growth; R&D roughly flat; G&A down YoY .
  • Epic integration economics: ~$5M annual cost plus per-click fees; expected to pay for itself over time; aggressive launch timeline .
  • PLA/CPT code impact: Enables in-network contracting and first-pass claims; expected ASP improvement via fewer denials/appeals .
  • Weather/AR clean-up: 500–600 tests (~1pt growth) lost; $1.1M aged receivables write-off across 3–4 quarters of revenue .
  • Class action settlement: $20.25M total; ~$14.9M insurer coverage; ~$5.4M out-of-pocket; final terms pending court approval .

Estimates Context

  • Revenue beat: Actual $84.7M vs consensus $84.5M* .
  • EPS beat: Non-GAAP diluted $0.09 (basic $0.10) vs consensus $0.068* .
  • EBITDA context: Reported adjusted EBITDA $4.6M vs consensus EBITDA $2.67M*; not strictly comparable due to adjusted definition.
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Execution remains solid across organs, with kidney surveillance poised to accelerate in Q2/Q3 as protocols re-adopt; volume guidance supports mid-teens Testing Services growth .
  • Pricing/ASP tailwinds from PLA/CPT code conversions and revenue cycle rebuild should sustain margin expansion; management explicitly targeting ASP uplift .
  • Epic Aura integration and XynQAPI for IOTA should reduce ordering friction and deepen center engagement, supporting multi-solution cross-sell and Testing Services growth .
  • Litigation overhangs continue to fade (class action largely insured; prior patent reversal), preserving cash to fund growth and potential buybacks per authorization .
  • Evidence momentum (SHORE, KOAR, ALAMO) strengthens payer coverage narrative; incremental coverage and in-network status likely to lift ASP and volumes in 2H25/2026 .
  • Near-term trading: Positive setup on EPS/revenue beats and guidance reaffirmation; watch Q2 volume inflection, Epic pilot updates, additional coverage wins as catalysts .
  • Medium-term thesis: Ecosystem strategy (Testing, Digital, Products) and operational excellence support 2027 targets ($500M revenue, 20% adjusted EBITDA), with upside from surveillance normalization and ASP improvements .