CareDx, Inc (NASDAQ:CDNA) Q1 2026 Earnings Call Transcript

CareDx, Inc (NASDAQ:CDNA) Q1 2026 Earnings Call Transcript April 28, 2026

CareDx, Inc beats earnings expectations. Reported EPS is $0.34, expectations were $0.11.

Operator: Hello, everyone. Thank you for joining us, and welcome to CareDx, Inc Q1 2026 financial results 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 1 on your keypad to raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to Caroline Corner, Investor Relations. Caroline, please go ahead.

Caroline Corner: Thank you, operator. Good afternoon. Thank you for joining us today. Earlier today, CareDx, Inc released financial results for the first quarter 2026 ending 03/31/2026. The results are currently available on the company’s website at caredx.com. Joining me on today’s call are John Hanna, President and Chief Executive Officer; Keith S. Kennedy, Chief Operating Officer and Chief Financial Officer; and Doctor Jeffrey Titterberg, Chief Medical 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. 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, 04/28/2026. 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 a discussion of certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from GAAP measures. Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures may be found in today’s earnings release, which is posted on our website. With that, I will now turn the call over to John.

John Hanna: Thank you, Caroline. Good afternoon, and thank you all for joining today’s call. Since I joined CareDx, Inc in 2024, I have been singularly focused on transforming this company into a precision diagnostics market leader. Today, I am going to highlight two portfolio actions we have taken to accelerate our growth strategy, including the divestiture of our Lab Products business we announced on April 15 and the acquisition of Navaris announced today. In my prepared remarks, I am going to briefly review our strategy in solid organ transplant that is propelling the growth in our core business. I will then cover the two portfolio actions in more detail. After that, Keith will walk through the financials and our updated outlook for 2026.

At CareDx, Inc, our growth strategy is focused on extending our leadership in precision medicine testing and patient and digital solutions by addressing markets where our core competencies give us the right to win. We are addressing clinical markets where we hold a clear number one position. These markets are characterized by patients with a high cost and burden of disease that warrants repeat molecular testing to inform clinical management. These patients are managed by a concentrated group of subspecialty providers, and we service them through our solution selling approach that integrates digital solutions and pharmacy to support clinical workflows and patient engagement and adherence to our testing services. Our organic growth strategy is anchored on three connected drivers.

First is our pipeline programs. Innovation is central to how we maintain leadership and extend our model into new markets and grow our TAM. Q1 marked continued progress across our pipeline, with advancement in both new clinical programs and platform capabilities that extend our core monitoring model over time. In 2026, we are advancing three key pipeline initiatives. First, during the quarter, we advanced our lead cell therapy program, Alaheme, with clinical data from the ACROBAT study. The ACROBAT data have now been presented at both Tandem and EBMT; we anticipate publication submission in the second quarter. In solid organ transplant, we are progressing our program to expand AlloSure into liver transplantation. Liver transplantation is unique in its biology and clinical management, and in our MAPLE trial, we are gathering follow-up data for patients enrolled in the study to validate our solution for this important indication.

Strategically, AlloSure liver would extend our core monitoring model into a new organ system, enabling total addressable market expansion while remaining tightly aligned with the same workflow-driven, repeat testing, solutions-based approach that underpins our core business. Additionally, late last year, we announced the launch of HistoMap kidney, which extends molecular insights to the moment of biopsy and complements our existing blood-based kidney monitoring. For example, when a kidney transplant patient undergoes a biopsy, clinicians typically rely only on histology, looking at tissue under a microscope, to assess what may be happening in the graft. HistoMap kidney adds a molecular layer, providing additional biological context that can be evaluated alongside traditional pathology.

During the quarter, we continued to make progress toward the planned HistoMap kidney launch, including submission of our second clinical validation manuscript and advancing our CLIA readiness. Together, Alaheme, AlloSure liver, and HistoMap demonstrate how we are innovating on our core platform to extend our leadership into new clinical markets. Second, our go-to-market strategy is focused on building belief in molecular testing as the standard of care in solid organ transplant and simplifying the workflow for health systems to drive operational efficiencies in their practice and adherence to testing protocols, while improving the quality and consistency of how customers experience working with CareDx, Inc. We are executing this through two primary go-to-market initiatives.

First is emphasizing the clinical differentiation of our solutions, where we lead with indication-specific strategies tailored to how transplant clinicians make decisions. With HeartCare, our focus is on informing prognosis and treatment decisions, leveraging our SHORE data. In kidney, we are expanding the context of use for AlloSure beyond surveillance with a focus on for-cause testing indications, which currently account for 50% of our kidney testing volume. In lung, we continue to build adoption by promoting early findings from our ALAMO registry. This approach allows us to drive relevance within each indication rather than relying on a single commercial message across markets. The second initiative is driving workflow improvements and ease of use, which is increasingly critical to scale.

We are embedding our solutions more deeply into clinical workflows through a combination of center-based software, Epic Aura integrations, and Epic Enterprise LIMS infrastructure. Together, these capabilities are designed to support more consistent ordering, reporting, and cash collection by reducing friction within transplant center workflows. As we look ahead, we are targeting approximately 50% of testing volume through Epic-integrated sites by year end, reflecting our belief that workflow integration is central to sustained adoption. We made continued progress on this strategy during the quarter, with nine centers live and 16 additional integrations underway. While still early, these integrations are showing signs that they reduce friction for care teams and enable increased adherence to center-specific testing protocols.

These initiatives are supported by continued investment in sales, medical education, and patient engagement through our CareDx Cares team with a clear emphasis on improving the customer experience. We are deploying resources to accelerate growth, and today, we have over 120 field support team members that assist transplant centers with their workflow and assist patients with blood collection. Overall, our go-to-market approach reflects a clear strategic intent to establish molecular testing as the standard of care by combining clinical differentiation, workflow simplicity, and scalable execution. Our evidence generation strategy is intentionally designed to support how we scale the business and extend our leadership position. The objective is to advance the clinical utility of our on-market products, inform how clinicians use molecular testing over time, and support expansion into new indications in a disciplined way.

In solid organ transplant, studies such as ALAMO and HARBOR focus on demonstrating longitudinal utility and monitoring relevance. MERIT is a meaningful step beyond that. MERIT is an interventional study which evaluates how molecular insights can actively inform therapeutic decision-making. Strategically, this is important because it makes molecular testing integral to clinical action, reinforcing its role within routine care pathways. In cell therapy and hem-oncology, we are advancing our Transplant+ strategy starting with ACROBAT, which serves as the foundation for the clinical validation of Alaheme and our entrance into AML and MDS markets. We are also extending that same molecular monitoring model into DLBCL and multiple myeloma in our ACROSS study evaluating CAR T persistence.

This work focuses on understanding expansion and persistence kinetics in real-world CAR T care. Strategically, this study helps define where molecular monitoring can add value in a rapidly evolving market, which may become an important part of our future pipeline. We announced in March the launch of Vantics, our AI-enabled clinical insights platform, which adds an intelligence layer to clinical decision-making. In practical terms, consider a kidney transplant patient who is undergoing routine molecular testing as a part of follow-up care. Over time those results, such as serial AlloSure measurements, are generated alongside clinical data already captured in the care workflow. With Vantics, centers can securely aggregate and analyze center-specific molecular and clinical data across cohorts, enabling more consistent interpretation of trends over time.

The supporting algorithms are informed by CareDx, Inc’s large clinical study databases, including SHORE and KOAR, helping translate real-world longitudinal data into scalable program-level insights. Together, these efforts reflect a consistent strategy to extend molecular monitoring in adjacent clinical settings in a disciplined way, prioritizing evidence, clinical relevance, and timing. Last week, CareDx, Inc’s precision medicine testing services were featured in more than 50 abstracts, including 16 oral presentations, at the International Society for Heart and Lung Transplantation’s Annual Meeting, drawing on data generated from across approximately 95 transplant centers. This breadth reflects one of the largest coordinated bodies of real-world longitudinal molecular monitoring data presented at a national transplant meeting.

The data spanned both heart and lung transplantation and included findings from large prospective registries such as SHORE and ALAMO, as well as early interventional work supporting MERIT. Across these studies, and key features of the highlighted abstracts on this slide, the consistent theme was the clinical relevance of longitudinal molecular signals over time, supporting risk stratification, earlier signal detection, and more informed post-transplant management. The scientific momentum we highlighted at ISHLT reinforces our broader strategy and the growth drivers we have discussed, demonstrating how molecular monitoring is becoming increasingly embedded in clinical practice. Next, I would like to briefly turn to the divestiture of our Lab Products business, an important step in our recent portfolio actions.

This transaction simplifies the company to what we do best: precision medicine testing services and digital and patient solutions. The Lab Products business includes manufacturing, regulatory, and commercial operations that are distinct from our U.S.-based testing services platform. By separating these activities, we are streamlining our operating model and allowing each business to move forward with greater focus and alignment. Strategically, this reinforces our testing services and patient and digital solutions core business, which are driving growth. In the first quarter, they delivered 48% and 33% revenue growth, respectively. Financially, the transaction provides upfront cash consideration of $170 million at closing, improving our financial flexibility and supporting our capital allocation strategy.

At the same time, the transaction positions the Lab Products business for continued success under Eurobio Scientific, a longstanding partner and global IVD manufacturer with scale and distribution capabilities. Keith will walk through the pro forma financial impacts of the transaction in more detail in his remarks. Now on to the big news. We announced today an agreement to acquire Navaris. This is a thoughtful and deliberate step in our growth strategy. Along with our Alaheme and CAR T organic pipeline in oncology, we are taking a very selective and differentiated approach to solid tumor MRD with a category-defining and indication-leading platform with Navaris. Importantly, this is not a move to broadly pursue MRD as a category. Rather, it is a targeted addition in a specific viral-mediated cancer space where longitudinal molecular monitoring is already reimbursed, embedded in specialty workflows, and aligned with how we operate our core business today.

Navaris’ platform is built around a tumor-naive blood test used across the care continuum from diagnosis through MRD surveillance. First, I would like to share a little bit about the business at a high level. To date, the company has performed more than 130,000 commercial tests, has approximately 2,000 active ordering physicians, and is operated by a strong U.S.-based team of approximately 100 employees. The testing is currently covered for approximately 100 million lives, including Medicare, and has Advanced Diagnostic Laboratory Test, or ADLT, designation with a $1,800 reimbursement per test. For 2025, the estimated unaudited revenue is $34 million, and we expect it will grow by 30% to 40% or greater over the next three years. The Navaris testing platform uses a proprietary and differentiated tumor tissue-modified viral DNA, or TTMV, approach to detecting tumor-derived viral DNA in a blood sample.

The liquid biopsy platform is tumor-naive by design, meaning it does not require access to tumor tissue. As a result, testing can be performed through a simple blood draw, while also differentiating malignant signal from transient or benign HPV infection without reliance on having a tissue sample. The platform is built on an ultra-sensitive digital PCR technology combined with proprietary analytical methods, supporting both strong clinical performance and scalable operations. Multiple indications for Navaris testing are supported by a large and growing body of evidence that now totals 56 peer-reviewed publications. In a large multicenter real-world observational study of 543 cancer patients reflecting use in routine clinical practice, the Navaris test demonstrated strong performance with a negative predictive value of 98% and a positive predictive value of 95% during post-treatment MRD surveillance.

As shown in the Kaplan-Meier curve on the right, patients with persistent negative TTMV DNA results during surveillance experienced improved recurrence-free and overall survival compared with those with one or more positive tests, and the median lead time to identify recurrence was four months ahead of standard-of-care methods. Based on these findings, the study authors recommended post-treatment monitoring and guideline-specified routine surveillance intervals. Viral-driven cancers represent a growing specialty oncology market, with HPV playing a central role across multiple solid tumors. According to U.S. population-level data from the CDC, HPV is associated with the majority of cases of several of these tumor types, reaching approximately 80% of head and neck cancers and close to 90% of anal cancers, Navaris’ two lead indications.

Importantly, the incidence of HPV-associated cancers continues to increase, demonstrated here by the growth in head and neck cancer on the right. The Navaris platform is validated across multiple viral-mediated cancer indications. In aid to diagnosis, Navaris is validated in head and neck, and planned validation in anal cancers. In MRD surveillance, Navaris is clinically validated and Medicare covered in head and neck and anal cancers and has planned validation in gynecologic cancers. And now, I would like to ask our Chief Medical Officer, Doctor Jeffrey Titterberg, to walk us through the patient journey for head and neck cancer diagnosis and molecular MRD monitoring.

Doctor Jeffrey Titterberg: Thank you, John. I am excited to join the call and share what we see to be a significant opportunity for a differentiated solution to address an unmet medical need in viral-mediated cancers. Today I am going to focus my comments on head and neck cancer for the Navaris adoption of the greatest and illustrate how Navaris fits into the workflow and management of these patients. Patients with head and neck cancer typically start their journey after being referred to an ENT surgeon, with symptoms that may include chronic sore throat, pain or difficulty swallowing, or a neck mass. The ENT surgeon will first examine the patient, perform laryngoscopy and imaging, and then obtain tissue via biopsy or fine needle aspiration.

Importantly, these methods can be inconclusive, and an HPV diagnosis can be missed if tissue samples are inadequate or nondiagnostic. Peer-reviewed evidence has shown that Navaris is highly accurate, aiding in the diagnosis of HPV-positive head and neck cancer. When utilized in conjunction with traditional approaches, more patients are correctly classified as HPV positive, which is important because making an accurate diagnosis of HPV positivity is critical to downstream therapeutic decision-making. HPV-positive patients almost always undergo surgical resection, followed by chemotherapy, radiation, or both, under the care of a multidisciplinary team. Navaris testing may be utilized to inform treatment response through its unique quantitative tumor tissue-modified viral DNA score, which correlates with tumor burden.

The TTMV DNA score has the potential to inform both the duration and intensity of therapy, for which studies are ongoing. Following definitive treatment, Navaris molecular testing is positioned as a monitoring tool in this context; serial blood-based monitoring is used to complement routine follow-up, enabling a repeat assessment of the molecular signal over time as part of standard surveillance workflows. The MRD surveillance protocol for Navaris testing aligns with guideline-recommended physician follow-up time points, including quarterly for years one and two, and semiannually for years three, four, and five, for a total of 14 tests per patient over the first five years post treatment, followed by annual testing thereafter. Currently, Navaris is the only Medicare-covered assay for HPV-positive head and neck and anal cancer MRD.

Care is delivered by specialists at accredited centers consistent with NCCN- and CAP-aligned practices, where patients are followed closely for multiple years due to risk of recurrence.

John Hanna: Thank you, Jeff. With that context on the technology, patient journey, and the reimbursement framework already in place, I want to step back and talk about the size and quality of the opportunity in front of us. HPV-driven solid tumors are a large and growing portion of the overall specialty oncology testing market. Today, we estimate the U.S. total addressable market to be approximately $4.5 billion, split across two distinct clinical applications. The first is molecular residual disease surveillance, which represents roughly $1.5 billion of TAM. This is where Navaris is focused today with clinical validation and Medicare coverage and in the early stages of clinical adoption. The second is aid to diagnosis, representing an additional $3 billion opportunity that has yet to be tapped.

In totality, at CareDx, Inc, we are building a differentiated multi-indication precision medicine portfolio to drive growth. In solid organ transplant, we have established leadership across heart, kidney, and lung, with liver progressing from development into validation. In specialty oncology, we are applying our core competencies in high-value indications. That includes viral-mediated cancers and hematologic malignancies like AML and MDS. Importantly, this diversified portfolio approach allows us to continue on our strong growth trajectory by extending our precision medicine testing services and patient and digital solutions into new indications. When taken together, we estimate the total addressable market for solid organ transplant and specialty oncology now exceeds $12 billion.

The result is a diversified growth profile across specialty markets. Navaris extends our platform into a large specialty oncology market where our model already applies and where we can lead. It allows us to stay disciplined about where we compete, focusing on indications where molecular monitoring is differentiated and scalable. As we evaluated this opportunity, we were particularly focused on the long-term impact on our growth and returns to shareholders, and we have strong conviction that this investment can deliver both within the framework of our existing operating model. This brings us to the core takeaway: CareDx, Inc is the right company to scale Navaris. We have the proven platform, the operational discipline, and the specialty focus that can turn this expanded portfolio opportunity into durable growth and profitability.

I will now turn the call over to Keith to review our Q1 financials and 2026 guidance.

Caroline Corner: Keith?

Keith S. Kennedy: Thank you, John. I plan to cover our first quarter 2026 financial results and our updated 2026 guidance. You may access our earnings presentation at caredx.com by clicking through to our Investor page. Turning to the financial highlights section of our earnings presentation, for the first quarter 2026, and our year-over-year results: Total revenue increased 39% to $118 million. Testing volume increased 17% to 54,900 tests. Testing services revenue increased 48% to $91 million, or $16.60 per test. Patient and digital solutions revenue increased 33% to $16 million. Lab products revenue declined 4% to $10 million. Our non-GAAP gross margins increased to 73%. Non-GAAP operating expenses of $69 million, or 59% of revenue, included approximately $2 million incremental bonus accrual for performance above plan.

Our GAAP net income was $3 million, GAAP net income per basic and diluted share was $0.05, and adjusted EBITDA of $19 million increased 300%+. Cash collections increased 52% to $121 million. Cash flow from operations was $4 million this quarter and $72 million over the last four quarters. We ended the quarter with $198 million in cash and cash equivalents and no debt. In the first quarter, we collected $14 million in excess of December 31 receivables. This out-of-period revenue contributed $260 per reported test. Excluding this revenue, our revenue per test was $14.[inaudible]. Turning to guidance. We are raising 2026 revenue guidance to $447 million to $465 million, representing a 20% increase year over year at the $456 million midpoint of the range, and adjusted EBITDA of $43 million to $57 million, a 58% increase year over year at the $50 million midpoint of the range.

Our full-year guidance covers the business in our hands today, including our products business. After I cover our annual guidance, I will provide details for our products business embedded in our annual guidance, which we hope will provide our preliminary insights into the financial carve-out. We applied the following assumptions in modeling our full-year guidance, consistent with non-GAAP measures. We believe testing volume will range between 224,000 and 229,000 tests for the year, representing a 13% increase year over year at the 226,500 midpoint of the range. Based on our experience and seasonality in our business, we expect to see a step up in volume of approximately 1,700 tests from Q1 to Q2, flat from Q2 to Q3, and another step up in volume of 1,800 tests from Q3 to Q4.

Our guidance assumes revenue for each line of business calculated on a year-over-year basis at the midpoint of the following ranges: Testing services revenue of $337 million to $351 million, a 25% increase at the $344 million midpoint. Patient and digital revenue of $63 million to $66 million, a 13% increase at the $65 million midpoint. Product revenue of $45 million to $50 million, flat at the $48 million midpoint. For testing services, we included a slide on revenue per test in our earnings presentation. We expect our revenue per test to increase 10% year over year to the midpoint of our guide—7% due to an increase in our average accrual rate and 3% due to the combination of cash collections in excess of receivables offset by our estimate of the LCD price impact.

In modeling to the midpoint of our guide, we assume average accrual rate per test to increase from $14.[inaudible] per test in Q1 to $14.60 by year end, out-of-period revenue of $7.5 million in Q2, $5 million in Q3, and none in Q4, and the LCD to negatively impact revenue, not volume, by $7.5 million in 2026. Per quarter, we modeled gross margins in the range of 68% to 71% and operating expenses of $68 million to $70 million, including higher bonus accrual of approximately $2 million per quarter, and we anticipate depreciation recorded in operating expenses to be approximately $9 million for the full year. As mentioned in our April press release, the Board of Directors authorized a common stock repurchase program of up to $100 million of shares over a period of up to 24 months.

Turning to our Lab Products divestiture, as John mentioned, we signed a definitive agreement to divest this business, which we expect to close by the end of the third quarter and net approximately $160 million in cash, equal to the $170 million sales price net of $10 million in estimated transaction expenses. As I said earlier, our full-year guidance covers the business in our hands today, including our products business. In 2026, our Products business generated approximately $10 million in revenue and less than $1 million in adjusted EBITDA. To provide context on the carve-out of our Products business, the following slide in our earnings presentation illustrates the following. On the left, we prepared a chart showing our revenue mix by service line for 2025 and the full-year guidance at the midpoint of the range.

Our 2026 guidance includes $48 million in lab products revenue, or flat year over year, and $[inaudible] in core business revenue, including testing, patient, and digital services, or 23% growth year over year. The table to the right of this slide provides assumptions built into our 2026 guide for our products business, which is our best estimate at this time, but we expect to vary depending on when the transaction closes, transition services we provide to the buyer, etc. In a perfect world, both parties would like to achieve a clean close at quarter end, or June 30, but we are allowing for slippage into Q3. Our 2026 guidance assumes lab products generates $45 million to $50 million in annual revenue, $26 million to $30 million in gross profit, $21 million to $24 million in operating expenses, approximately $5 million in depreciation, and contributes $3 million to $9 million in EBITDA.

We are reviewing our post-close expense structure and will have more to say on the carve-out after we close. For modeling purposes, we provided the quarterly ranges underlying our 2026 guide, which we will update post close. For example, we modeled $5 million to $6 million in quarterly operating expenses for the lab products business. Hopefully, this is helpful detail. I will now turn the call back over to John.

John Hanna: Thank you, Keith. In summary, I want to thank all the team here at CareDx, Inc and Navaris and look forward to the path forward. We think these actions, taken together, are advancing our growth strategy as a company, optimizing our portfolio, and extending our leadership in precision medicine diagnostics. Thank you, and I will now turn the call back over to the operator.

Q&A Session

Operator: Thank you. 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 1 on your keypad to raise your hand. To withdraw your question, press 1 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. Tycho, your line is open. Please go ahead.

Tycho W. Peterson: Hey, team. This is Lauren on for Tycho. Quick ones for me. First, on the $4.5 billion TAM for MRD, how much of this market right now is immediately accessible to you guys through your existing infrastructure, and what new clinical channels must be established for the 30% to 40% projected annual growth? And then second, on the digital solutions business, as you guys are growing this out in the solution selling strategy, what is the attach rate for digital solutions among your high-volume transplant center customers? Thanks.

John Hanna: Yeah. Thanks so much for the question, Lauren. As we outlined in the prepared remarks, $1.5 billion of the TAM is currently in the MRD space and covered in head and neck and anal cancers. From a channel access perspective, the Navaris team has done a great job building a channel into the specialty providers that diagnose and monitor those patients, including ENTs—predominantly in head and neck—and then medical oncologists that they work with. We do not anticipate having to build a net-new channel; Navaris has already built that channel. With CareDx, Inc capabilities in driving repeat testing and building workflow optimization, including Epic integration, we think we can accelerate that revenue and volume growth rate.

Your second question on the attachment rate of digital solutions: we said previously that 70% of transplant centers across the U.S. use at least one of the CareDx, Inc patient or digital solutions, and that continues to be true today. As we have shared previously, the more solutions a transplant center has, the more embedded we become into their workflow and, therefore, the more testing we see and revenue generated from those centers.

Tycho W. Peterson: Perfect. Thanks so much.

John Hanna: Thank you.

Operator: Our next question comes from the line of Brandon Couillard from Wells Fargo. Brandon, your line is open. Please go ahead.

Brandon Couillard: Hey. Good afternoon. Thanks for the time. John, on Navaris, just curious how long these assets have been on your radar screen. It looks like they also operate two labs, one in Massachusetts, one in North Carolina. Would it be your expectation to keep both? And R&D spend must be pretty lean here. Would this be a type of situation where maybe you could spend an extra $10 million or $20 million and get a lot of juice out of that, be it commercially or with the R&D pipeline? Or would you expect to keep operating this business near breakeven to slightly profitable?

John Hanna: On the labs, they operate and have CLIA licenses in both their labs. It is not really that material at this point, and they are in the middle of automating some of their workflows, so we will be spending a lot of time really helping them on their cost per test, continuing to drive that as well as the revenue cycle management over time. We will evaluate the lab strategy. And I think, Brandon, on the R&D spend, the company operates incredibly efficiently. There are a high number of active clinical trials in addition to the 56 publications that have already been published on the products. Right now, there is a focus on the aid-to-diagnosis indication both in head and neck and anal cancer to unlock that larger portion of the TAM, and then development work really around the 14 time points of testing over the first five years post definitive treatment for those patients.

That is what we are going to be focused on. That is really the core competency that makes this deal work and why Navaris selected, quite frankly, CareDx, Inc as their partner going forward.

Brandon Couillard: Super. And then, John, it would be great to get your macro view on the transplant procedure environment right now. Volume growth is still pretty sluggish here. Curious how much longer you can keep growing your own testing volumes at double digits if this type of environment persists, and to what degree at all does your guidance assume that procedure volumes pick up as we move through the year?

John Hanna: Yeah, it is hard to predict, as you know, Brandon. It seems like in the transplant market, the procedure volumes accelerate and then fall back and accelerate and fall back. We saw some acceleration at the end of the first quarter, particularly in kidney. We are monitoring that closely. As you are aware, we are coming toward the end of the first reporting period in the IOTA program, and we keep hearing chatter in the market about a focus on increasing transplant volumes as a result of that program, but we are not seeing it nationwide in terms of total volume growth—that is in select centers. So we are very focused on supporting those centers that are in the IOTA program around hitting their goals as they move into this first reporting cycle.

Keith S. Kennedy: As we test patients, our population of unique patients we are testing is growing year over year. Once you get a transplant, you are followed for years in getting testing. So even if the underlying transplant volume is flat, growth rate is going to be significantly higher in surveillance testing.

Operator: Thank you. Our next question comes from Mark Massaro at BTIG. Mark, your line is open. Please go ahead.

Mark Anthony Massaro: Hey, guys. Congrats on the acquisition of Navaris. I wanted to ask a couple on that deal. So the first one is where is the GYN cancer indication in terms of development, and how quickly do you think that could launch? The second one is, I understand there are 100 employees at the company. How many are in commercial, and did I hear you right that you do not expect to expand their commercial? And then the third one is on the reimbursement. I think the reimbursement rate is $1,800 per test under an ADLT. When do you think that might reset, if ever, and is that locked through the end of this year? How are you thinking about that going forward?

John Hanna: Hey, Mark. Thanks for the questions. The GYN indication is still in development. There is greater heterogeneity of HPV-driven proteins in GYN than in the other indications, so that is a development program within the company that will continue, and we do not have a specific timeline around it today. From a commercial channel perspective, what I was saying in response to Lauren’s question is that the channel exists today. We certainly anticipate supporting and expanding that channel. Driving growth requires more reach and frequency with providers and building belief, and so we will do that, but that is part of our model here, and we think it is very doable to maintain the financial profile that we anticipate with the asset. The $1,800 ADLT—as you know, with ADLT status, you report data every year—and that reimbursement rate has been consistent for the company, so we are not expecting any change in that rate.

Mark Anthony Massaro: Yep. Understood. And then I figured I would ask an unrelated question to the Navaris acquisition. What is your latest thinking around the timing of the LCD for transplant from the MolDX group? Is that perhaps mid-26? Or I know we are approaching mid-26. So how are you thinking about that?

John Hanna: Yeah. It still continues to be mid-26, given that the draft issuance date was July 15, and CMS generally holds themselves to publishing a final or retiring the draft within one year of the draft issuance. So we still anticipate we could see the LCD here sometime at the end of the second quarter or early third quarter.

Mark Anthony Massaro: Sounds good. I will keep the questions there. Thanks, guys.

John Hanna: Cool. Thanks, Mark.

Operator: Our next question comes from the line of Andrew Brackmann from William Blair. Andrew, your line is open. Please go ahead.

Andrew Brackmann: Hey, guys. Good afternoon. Thanks for taking the question. I also wanted to ask on Navaris. It certainly checks a lot of the boxes that you outlined with respect to specialty markets that you are concentrating on, both organically and with potential M&A. Can you maybe just unpack the operational learnings from the transplant business that you can apply here? You talked about driving the repeat ordering and the Epic integration. What specifically are the operational learnings that you have found over the last few years here that you can apply to this business? Thanks.

John Hanna: Yes. Thanks for the question, Andrew, and I will ask Jeff to jump in here as well. It is not just operational. It is also around provider education and awareness of the data and the use of the products. Do you want to share a little bit?

Doctor Jeffrey Titterberg: Yeah. I mean, as people get more familiar and more comfortable with using these noninvasive tests rather than their typical invasive tests or even radiographic tests, they see the utility of this. A lot of times, patients go to physicians and it is hard to diagnose these recurrences by physical exam, and the radiology can be equivocal, particularly right after treatment, when you have things like PET-CT scans lighting up because there is so much metabolic activity from a recent surgery. So there are lots of really good uses for this test. I think people, as they start to use it, will start to see more and more utility.

Keith S. Kennedy: Operationally, they are not at scale, so their ability to buy things at scale the way we are able to do that, to deploy automation, have engineers, and things like that—we do believe there is potentially up to a third reduction in the cost per test you can achieve by automation and just price negotiations. We have line of sight that we looked at during the diligence. And then on Epic, obviously, this is too small of a company on their own to invest in something like that, but adding them to our Epic instance and turbocharger is something that we can do quite easily without incremental cost. We are excited about that opportunity, supported by the commercial initiatives and go-to-market strategy.

John Hanna: Yeah. And I talked a little bit about our customer service team and the CareDx Cares team and really supporting workflow within a specialty practice or subspecialty practice. Oftentimes, these practices are rate limited by the amount of labor that they have—the amount of support staff—and it becomes overwhelming. Ordering a diagnostic test is not top of mind because they have a slew of patients waiting in the waiting room to get in and see the clinician. Ensuring that there is a very streamlined workflow, that we are supporting them, and that we are engaging patients after the order has been set and pulling through access to the blood is really critical. These are things that we have built expertise on at CareDx, Inc, and we think we can port over to the Navaris business.

Andrew Brackmann: Perfect. Appreciate all that color. And then if I could just follow up, obviously I am sure you did a lot of diligence around the competitive environment for this asset. Can you maybe talk about how you are viewing the specific indications that they are in right now, any potential emergence that you have on your radar, and bigger picture, how do you maintain the niche that they have established? Thanks.

John Hanna: Yeah. Thanks, Andrew. Certainly, we did diligence on the competitive environment, and we operate in competitive markets today. But Navaris has a differentiated technology, and that technology makes it a preferential tool in the monitoring and diagnosis of these patients with HPV-driven cancers. That made us very comfortable with the transaction, and we think we can sustain that competitive advantage and market-leading position that the company has today.

Andrew Brackmann: Great. Thanks, guys.

Operator: Our next question comes from the line of Mason Carrico from Stephens Incorporated. Mason, your line is open. Please go ahead.

Mason Carrico: Hey, guys. Thanks for taking the questions here. Could you provide a bit more detail on the financials of Navaris—what was the 2025 growth rate off of 2024, maybe how it ramped throughout the year? And then on that 30% to 40% growth rate going forward, how much of that is volume driven versus ASP?

Keith S. Kennedy: I am going back to 2024. I have the 2025 in front of me. Of course you guys have 2024. Sorry about that, Mason. Go ahead to John, and I will come back to you on that one.

John Hanna: Yeah. I think, Mason, obviously there is a mix of ASP and volume growth, but volume has been the key driver here for the company given that it is relatively early in the adoption cycle in the market. I would say that we feel very comfortable with the 30% to 40% growth rate going forward, and that is why we provided commentary that we anticipate that to persist over the next three years.

Keith S. Kennedy: Mason, the growth from 2024 to 2025 was 75% top-line growth.

Mason Carrico: Got it. Okay. Yeah. Thanks, Keith. And, John, could you just update us on maybe where you think market penetration stands today for cell-free DNA testing in transplant—maybe your estimate across organ types—and how much growth runway remains ahead of you here?

John Hanna: I think that the growth runway remains significant. There are still, as with many of these markets, factions that do not use molecular tests at all. As an organization, dating back to mid-2024, we started to focus on reinstituting surveillance testing in kidney. Over the past several quarters, we have also been focused on for-cause indications in kidney because there are many, and as I shared in my prepared remarks, we are now seeing roughly 50% of that volume be for-cause today. We still think there is substantial runway in kidney. We continue to see growth in HeartCare and, in particular, AlloMap as a product growing sequentially quarter over quarter even after being on the market for over 20 years now, which is incredibly impressive and indicative of the strength of the evidence, data, and utility of the product.

In lung, we feel like we are still early days in adoption, and we are eager to see data from ALAMO published such that we can continue to drive adoption even in its limited levels that we see in lung transplant centers today and have that grow into sustained utilization. We have got a lot of work still to do in this space, and we think there is a lot of runway still to go in solid organ transplant.

Mason Carrico: Got it. Thanks, guys.

John Hanna: Thanks, Mason.

Operator: Your next question comes from the line of John Wilkin with Craig Hallum. John, your line is open. Please go ahead.

John Wilkin: Hi, guys. Thanks for taking the questions. Just one bigger picture one on Navaris. As you think about any potential needs of a broader portfolio as you go into that channel—do you believe that you need to have that, and if so, how do you get there?

John Hanna: Thanks, John. That is a great question. I think today we feel really confident in the portfolio that the company has, and it is the market leader in both head and neck and anal cancers. Certainly, you could foresee having a service that augments it for non-viral-driven cancers, but that is not our focus today. As we go through the close process, integrate the business, and continue to execute on the large opportunity ahead of the company, we will come back and update you if we have different thinking around broadening the portfolio.

John Wilkin: Great. And then am I correct in assuming that there is no contribution from Navaris currently included in revenue guidance for the year?

John Hanna: Correct.

John Wilkin: Okay. Great. Thank you, guys.

John Hanna: Thank you.

Operator: Our next question comes from the line of Tom DeBorsi with Nephron Research. Tom, your line is open. Please go ahead.

Tom DeBorsi: Thanks for taking the questions. I wanted to focus on transplant—specifically the ASP improvements that you are clearly seeing. Keith, you mentioned ASPs moving towards $14.60 by the end of this year. I wanted to understand how much of that is driven by better claims submissions or less rejections versus the push towards getting 50% of volume through Epic Aura.

Keith S. Kennedy: Yeah. We do not have any Epic Aura uplift built into our guide, and our cash collections per test are exceeding our revenue per test. As we laid out in July, we started transitioning to shrinking the look-back period in our revenue recognition policies. As we were improving automation and workflows and revenue cycle management—obviously that is driving significant cash, which quarterly is exceeding our expectations. We are really excited about that, but you are going to see that flow into revenue per test as the year goes on. You will see out-of-period revenue, or revenue that comes in reflective of exceeding our AR at the beginning of that quarter, and you will see that start to flow into revenue recognition and AR so that levels out.

That is why I am giving you out-of-period revenue forward-looking view so that you know how I am transitioning that. Obviously, that is up higher than it was last quarter because our out-of-period revenue was so high this quarter, and it continues in April.

Tom DeBorsi: Understood. And then just as a follow-up question, on hematological malignancies or blood cancer MRD—with Alaheme and potentially AlloSure—I think the existing plan had been to leverage existing transplant center relationships given stem cell transplants and others. Is that still the current plan, or does the addition of Navaris change that sales rep strategy? Thanks.

John Hanna: Yeah. Thanks for the question, Tom. The acquisition of Navaris does not change that strategy. We have a very focused strategy around Alaheme, given that it is not yet Medicare covered. 2026 is going to be very focused on clinical education around the product and early adoption and building toward Medicare coverage for the product, and then we will think longer term around what the channel looks like.

Operator: Thank you.

Caroline Corner: Thank you. Our next question comes from the line of Yi Chen from H. C. Wainwright.

Operator: Yi, your line is open. Please go ahead. A reminder to unmute on your device locally.

Caroline Corner: He took a break.

Operator: We have reached the end of our Q&A session. This concludes today’s call. Thank you for attending. You may now disconnect.