Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CareDx Inc (CDNA, Financial) reported a 31% year-over-year increase in total revenue for the second quarter, reaching $92.3 million.
- The company achieved a significant milestone by becoming adjusted EBITDA positive this quarter, with a gain of $12.9 million compared to a loss in the same quarter last year.
- CareDx Inc (CDNA) raised its full-year 2024 revenue guidance to $320 million to $328 million, reflecting a growth rate of 15% year-over-year at the midpoint.
- The company's testing services business saw a 33% year-over-year revenue increase, with 43,700 tests delivered, marking the fourth consecutive quarter of sequential growth.
- CareDx Inc (CDNA) achieved over $10 million in revenue from both its patient and digital solutions and lab products businesses, with year-over-year growth rates of 19% and 35%, respectively.
Negative Points
- The company's non-GAAP gross margin for products decreased to 47% from 59% in the same quarter last year.
- Despite the positive adjusted EBITDA, the company remains cautious about future collections from prior periods, indicating a shrinking pool of such opportunities.
- The company faces uncertainties regarding the finalization of the draft Medicare local coverage determination, which could impact future revenue.
- CareDx Inc (CDNA) did not provide specific volume growth data at the organ level, which may limit detailed analysis of growth drivers.
- The company acknowledged that the overall pool of opportunities for improved collections from prior periods is decreasing, potentially impacting future revenue growth.
Q & A Highlights
Q: On the prior period collections, you had $13 million this quarter. How should we think about this on a go-forward basis? Is there more opportunity to collect on prior period billing?
A: Abhishek Jain, Chief Financial Officer: We recognized $13 million for prior periods, and some improved collections are included in the high end of our guidance. The overall pool of such opportunities is decreasing, which is why we included some wins in our guidance.
Q: What are you seeing in terms of surveillance testing in kidney? Are physicians still behaving as though the draft LCD is the policy?
A: John Hanna, President and CEO: Clinicians continue to use the test and are comfortable with the scenarios in which it can be used for cause. They have not changed their behavior relative to surveillance testing in anticipation of the draft LCD finalization.
Q: Regarding the IOTA program, what changes could we see in reimbursement, and when?
A: Alexander Johnson, President, Patient & Testing Services: The IOTA program is long-term, and the penalties and rewards are still in discussion. Changes will be specific to centers in the program, and we are well-positioned to help them.
Q: Can you quantify the market for multimodality testing and how much share you have captured?
A: John Hanna, President and CEO: We have strong evidence supporting multimodal testing in heart transplantation. Adoption is high, with upwards of 90% of patients undergoing testing from CareDx for heart transplant receiving HeartCare.
Q: How has the SHORE data impacted adoption trends?
A: Alexander Johnson, President, Patient & Testing Services: The SHORE study has been a big topic for clinicians, and we are in the early days of seeing its impact. The study will continue to generate data, and we expect its influence to grow over time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
