EX-99.1 2 cdna-20221103_earningsrele.htm EX-99.1 Document
Exhibit 99.1
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CareDx Reports Third Quarter 2022 Results
BRISBANE, Calif., November 3, 2022 -- CareDx, Inc. (Nasdaq: CDNA) — The Transplant Company™ focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers -- today reported financial results for the third quarter ended September 30, 2022.

Recent Highlights:

•On track to achieve profitable growth with positive adjusted EBITDA by first half of 2023
•Delivered 46,500 patient test results, representing growth of 15% compared to third quarter of 2021
•Achieved revenue of $79.4 million, increasing 5% year-over-year
•Sustained strong testing services GAAP gross margin of 73% and non-GAAP gross margin of 74%
•Strong balance sheet with $291 million cash, cash equivalents, marketable securities, and no debt
•Served 100,000th transplant patient, representing one out of ten patients transplanted in the U.S.

"We made significant progress during the third quarter as we worked towards delivering on our commitment to be adjusted EBITDA positive by the first half of next year,” said Reg Seeto, President and Chief Executive Officer of CareDx. "Importantly, we have many upcoming revenue growth drivers including commercial, regulatory and coverage catalysts over the next 12-18 months that will create long-term value for our stockholders while improving the lives of transplant patients."

Third Quarter 2022 Financial Results
Revenue for the three months ended September 30, 2022 was $79.4 million, an increase of 5% compared with $75.6 million in the third quarter of 2021. Testing services revenue for the third quarter of 2022 was $64.8 million, compared with $66.5 million in the same period of 2021. Product revenue in the three months ended September 30, 2022 was $7.2 million, compared to $6.5 million in the same period of 2021. Patient and digital solutions revenue for the third quarter of 2022 was $7.4 million, compared to $2.6 million in the same period of 2021.
For the third quarter of 2022, net loss was $16.9 million compared to a net loss of $11.9 million in the same period of 2021. Basic and diluted net loss per share was $0.32 in the third quarter of 2022, compared to basic and diluted net loss per share of $0.23 in the third quarter of 2021.
Non-GAAP net loss was $3.4 million in the third quarter of 2022 compared to a $4.0 million non-GAAP net income in the third quarter of 2021. Diluted non-GAAP net loss per share was $0.06 in the third quarter of 2022, compared to a diluted non-GAAP net income per share of $0.07 in the third quarter of 2021.
Adjusted EBITDA for the third quarter of 2022 was a loss of $2.5 million, compared to an adjusted EBITDA gain of $4.7 million in the third quarter of 2021.
Cash, cash equivalents and marketable securities were $291.3 million as of September 30, 2022.
For additional information regarding non-GAAP financial measures discussed herein, please see “Use of Non-GAAP Financial Measures,” “Reconciliation of GAAP to Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Adjusted EBITDA Financial Measures” below.




2022 Guidance
For the full year 2022, CareDx is revising our revenue expectations to be in the range of $320 million to $325 million due to lower Q3 revenue and a higher than anticipated shift in payer mix to commercial payors.
About CareDx – The Transplant Company
CareDx, Inc., headquartered in Brisbane, California, is a leading precision medicine solutions company focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. CareDx offers testing services, products, patient and digital solutions along the pre- and post-transplant patient journey, and is the leading provider of genomics-based information for transplant patients. For more information, please visit: www.CareDx.com.
Forward Looking Statements
This press release includes forward-looking statements, including expectations regarding CareDx's 2022 revenue and achieving positive adjusted EBITDA by first half of 2023 and the potential for commercial, regulatory and coverage catalysts over the next 12-18 months to create long-term value for CareDx's stockholders. These forward-looking statements are based upon information that is currently available to CareDx and its current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, general economic and market factors, and global economic and marketplace uncertainties related to the COVID-19 pandemic, among others discussed in CareDx’s filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed by CareDx with the SEC on February 24, 2022, and the periodic reports that CareDx has subsequently filed with the SEC. Any of these may cause CareDx’s actual results, performance, or achievements to differ materially and adversely from those anticipated or implied by CareDx’s forward-looking statements. CareDx expressly disclaims any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements.










Use of Non-GAAP Financial Measures
CareDx has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP gross margin, non-GAAP net income/(loss), non-GAAP basic and diluted net income/(loss) per share and adjusted EBITDA. We define non-GAAP net income/(loss) and per share results as the GAAP net income (loss) and per share results excluding the impacts of stock-based compensation; changes in fair value of equity investments, changes in estimated fair value of warrants, derivative liabilities and contingent consideration; acquisition related impairment charges and amortization of intangible assets, purchase accounting adjustments and related tax effects; costs involved with completing an acquisition; amortization of debt discount; and certain other financing charges. We define non-GAAP gross margin as total revenue less non-GAAP cost of revenue over total revenue. Cost of revenue is defined as the sum of cost of testing, cost of product and cost of patient and digital solutions. We define adjusted EBITDA as non-GAAP net income/(loss) before net interest income/(expense), income tax benefit, depreciation and amortization, and other income and expense. 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.
Contacts

Investor Relations
Ian Cooney
415-722-4563
investor@CareDx.com





CareDx, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Revenue:
Testing services revenue$64,751 $66,464 $198,330 $190,635 
Product revenue7,194 6,521 20,696 19,160 
Patient and digital solutions revenue7,414 2,604 20,383 7,382 
Total revenue79,359 75,589 239,409 217,177 
Operating expenses:
Cost of testing services17,771 18,038 53,629 51,756 
Cost of product4,736 4,919 13,022 13,771 
Cost of patient and digital solutions5,794 1,879 16,071 4,861 
Research and development22,306 19,439 66,818 54,479 
Sales and marketing22,261 21,370 72,359 56,421 
General and administrative23,830 18,671 75,621 50,216 
Total operating expenses96,698 84,316 297,520 231,504 
Loss from operations(17,339)(8,727)(58,111)(14,327)
Other income (expense):
Interest income, net1,225 20 1,892 147 
Change in estimated fair value of common stock warrant liability14 88 89 50 
Other expense, net(572)(3,440)(1,948)(906)
Total other income (expense)667 (3,332)33 (709)
Loss before income taxes(16,672)(12,059)(58,078)(15,036)
Income tax (expense) benefit(267)162 (206)525 
Net loss$(16,939)$(11,897)$(58,284)$(14,511)
Net loss per share:
Basic$(0.32)$(0.23)$(1.09)$(0.28)
Diluted$(0.32)$(0.23)$(1.09)$(0.28)
Weighted-average shares used to compute net loss per share:
Basic53,489,418 52,681,451 53,253,210 52,034,450 
Diluted53,489,418 52,681,451 53,253,210 52,034,450 




CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
September 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$82,959 $348,485 
Marketable securities208,317 — 
Accounts receivable70,425 59,761 
Inventory18,086 17,186 
Prepaid and other current assets8,370 7,928 
Total current assets388,157 433,360 
Property and equipment, net34,049 22,044 
Operating leases right-of-use assets35,843 17,993 
Intangible assets, net43,855 50,195 
Goodwill37,523 36,983 
Restricted cash198 211 
Other assets4,886 5,835 
Total assets$544,511 $566,621 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$10,625 $13,337 
Accrued compensation14,312 26,042 
Accrued and other liabilities45,351 37,922 
Total current liabilities70,288 77,301 
Deferred tax liability13 415 
Common stock warrant liability50 139 
Deferred payments for intangible assets2,522 5,041 
Operating lease liability, less current portion34,708 17,394 
Other liabilities251 455 
Total liabilities107,832 100,745 
Commitments and contingencies
Stockholders’ equity:
Common stock
52 52 
Additional paid-in capital886,909 853,683 
Accumulated other comprehensive loss(8,809)(4,670)
Accumulated deficit(441,473)(383,189)
Total stockholders’ equity436,679 465,876 
Total liabilities and stockholders’ equity$544,511 $566,621 




CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Cost of testing services reconciliation:
GAAP cost of testing services$17,771 $18,038 $53,629 $51,756 
Stock-based compensation expense(470)(750)(1,055)(1,715)
Acquisition related-amortization of purchased intangibles(329)(329)(987)(987)
Non-GAAP cost of testing services$16,972 $16,959 $51,587 $49,054 
Cost of product reconciliation:
GAAP cost of product$4,736 $4,919 $13,022 $13,771 
Stock-based compensation expense(321)(156)(851)(446)
Acquisition related-amortization of purchased intangibles(416)(480)(1,305)(1,434)
Non-GAAP cost of product$3,999 $4,283 $10,866 $11,891 
Cost of patient and digital solutions reconciliation:
GAAP cost of patient and digital solutions$5,794 $1,879 $16,071 $4,861 
Stock-based compensation expense(299)(217)(882)(555)
Acquisition related-amortization of purchased intangibles(236)(209)(709)(458)
Non-GAAP cost of patient and digital solutions$5,259 $1,453 $14,480 $3,848 
Research and development expenses reconciliation:
GAAP research and development expenses$22,306 $19,439 $66,818 $54,479 
Stock-based compensation expense(2,058)(1,986)(6,571)(5,284)
Asset impairments and write-downs(340)— (340)— 
Non-GAAP research and development expenses$19,908 $17,453 $59,907 $49,195 
Sales and marketing expenses reconciliation:
GAAP sales and marketing expenses$22,261 $21,370 $72,359 $56,421 
Stock-based compensation expense(2,672)(3,853)(9,702)(8,144)
Acquisition related-amortization of purchased intangibles(553)(502)(1,702)(1,344)
Non-GAAP sales and marketing expenses$19,036 $17,015 $60,955 $46,933 
General and administrative expenses reconciliation:
GAAP general and administrative expenses$23,830 $18,671 $75,621 $50,216 
Stock-based compensation expense(5,380)(3,677)(15,366)(10,439)
Change in estimated fair value of contingent consideration(266)(156)(830)35 
Acquisition related fees and expenses(58)(485)(387)(866)
Non-GAAP general and administrative expenses$18,126 $14,353 $59,038 $38,946 
Total other income (expense) reconciliation:
GAAP other income (expense), net$667 $(3,332)$33 $(709)
Unrealized (gain) loss on long-term marketable equity securities(271)3,257 215 167 
Investment impairment500 — 500 — 
Other charges14 (33)32 149 
Non-GAAP other income (expense), net$910 $(108)$780 $(393)
Income tax benefit reconciliation:
GAAP income tax (expense) benefit $(267)$162 $(206)$525 
Tax effect related to amortization of purchased intangibles(101)(122)(321)(373)
Non-GAAP income tax (expense) benefit$(368)$40 $(527)$152 




CareDx, Inc.
Reconciliation of Testing Services GAAP to Non-GAAP Gross Profit and Gross Margin
(Unaudited)
(In thousands)

Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Testing Services Revenue$64,751 $66,464 $198,330 $190,635 
GAAP cost of testing services(17,771)(18,038)(53,629)(51,756)
GAAP testing services gross profit46,980 48,426 144,701 138,879 
Stock-based compensation expense470 750 1,055 1,715 
Amortization of intangibles329 329 987 987 
Non-GAAP testing services gross profit$47,779 $49,505 $146,743 $141,581 
Non-GAAP testing services gross margin %74 %74 %74 %74 %

CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
GAAP net loss$(16,939)$(11,897)$(58,284)$(14,511)
Stock-based compensation expense11,200 10,639 34,427 26,583 
Asset impairments and write-downs840 — 840 — 
Unrealized (gain) loss on long-term marketable equity securities(271)3,257 215 167 
Acquisition related-amortization of purchased intangibles1,534 1,520 4,702 4,223 
Acquisition related fees and expenses58 485 387 866 
Change in estimated fair value of contingent consideration266 156 830 (35)
Other charges15 (33)32 149 
Tax effect related to amortization of purchased intangibles(101)(122)(321)(373)
Non-GAAP net (loss) income$(3,398)$4,005 $(17,172)$17,069 
GAAP basic and diluted net loss per share$(0.32)$(0.23)$(1.09)$(0.28)
Non-GAAP basic net (loss) income per share$(0.06)$0.08 $(0.32)$0.33 
Non-GAAP diluted net (loss) income per share$(0.06)$0.07 $(0.32)$0.31 
Shares used in computing non-GAAP basic net loss/income per share53,489,418 52,681,451 53,253,210 52,034,450 
Shares used in computing non-GAAP diluted net loss/income per share53,489,418 54,584,822 53,253,210 54,454,433 









CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Non-GAAP net (loss) income$(3,398)$4,005 $(17,172)$17,069 
Interest income(1,225)(20)(1,892)(147)
Income tax benefit (expense)368 (40)527 (152)
Depreciation expense1,465 624 3,567 1,879 
Other expense, net314 128 1,112 540 
Adjusted EBITDA$(2,476)$4,697 $(13,858)$19,189