CareDx, Inc (NASDAQ:CDNA) Q4 2022 Earnings Call Transcript

So that’s how I’d bifurcate it. I think the first one is probably more readily sort of on a cadence perspective to capture. And I think the other one is now based on now initiating those discussions. But certainly, from a company perspective, happy to have had that come through.

Andrew Cooper: Got it. Thanks for that Reg. And then just Abishek, just a little more details on that additional disclosure in the 10-K and the material weaknesses. Is there sort of a time line for remediation that we should be thinking about? And is there going to be any additional costs incurred as a result of maybe further investment in technology stack or other types of costs that would be involved in the remediation efforts?

Abhishek Jain: Yes, Matt. So we basically recently identified this. And then — it does not have any impact on the financial statements. I just wanted to call that out very specifically here. And the second piece is that you need to actually remediate these weaknesses over a period of time and then you need to test and prove it out before you can actually fully call it out remediated. So it will take a few quarters before we are able to kind of fully remediate and then also disclose at that base. That’s the first part. And the second part to your point is that I think we as a company has grown quite rapidly in the last few years, and then we are trying to catch up on our infrastructure in some of our infrastructural areas. And this is a piece where we some investments, but we are already having those things in our plan.

Andrew Cooper: Got it. Thank you.

Operator: Our next question is from Mason Carrico with Stephens. Please proceed.

Mason Carrico: Hey guys. Maybe a couple here on the adjusted EBITDA goal. Sorry if I missed this, but do you anticipate maintaining positive adjusted EBITDA going forward once you achieve that milestone in the first half?

Reginald Seeto: Yes, I’ll take that question. And yes, absolutely. That is what the goal is, Mason. And I’m hoping that we will be using our operating leverage after the Q2 to be able to kind of stay positive. But at the same time, I just want to also make a mention that we will be evaluating our investment opportunities as they come up in the second half and going forward. And we will let you guys know if something were to happen there.

Mason Carrico: Okay. Got it. And then two other quick ones here. One, I guess, if we were to take a step back and say, look how level, what do you view, I guess, is the biggest risk to either not being able to achieve that net positive adjusted EBITDA in the first half or maybe it flipping back negative? What’s the biggest risk there? And then the second part of the question is, what are you expecting stock comp to be in the upcoming year?

Abhishek Jain: So on the adjusted EBITDA; I think the biggest risk that I foresee is around the market volume growth. So if something were to go wrong there, that probably is the only thing that I can think of. We are trying to do as a company, a lot of stuff to manage our expenses and stay prudent there. So that is the risk that I foresee to hit our goal there. And the second question — second part of your question was around — what was the second question, Mason, can you say that once again.

Mason Carrico: Stock comp, how we should be thinking about stock comp in the upcoming year?

Abhishek Jain: Yes. I would basically assume a very similar trajectory of the stock comp going forward as well. I wouldn’t be thinking of too many changes there.