CareDx Reports Second Quarter 2022 Results

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 second quarter ended June 30, 2022.

Recent Highlights:

  • Delivered 45,000 patient test results, representing growth of 21% compared to second quarter of 2021
  • Achieved revenue of $80.6 million, increasing 9% year-over-year
  • Sustained strong overall GAAP gross margin of 66%
  • Project to achieve profitable growth with positive adjusted EBITDA by first half of 2023
  • Strong capital position with $306M cash, cash equivalents, marketable securities, and no debt
  • Revised 2022 revenue expectations to the range of $325 million to $335 million due to higher than expected mix of commercial patients from the success of new launches and market expansion

"We ended the first half of 2022 in an excellent financial position and are pleased to see the momentum in our testing volume and growth in the patient digital solutions," said Reg Seeto, President and Chief Executive Officer of CareDx. "We will build on this momentum to achieve positive adjusted EBITDA in the first half of 2023 and extend our leadership in the transplant ecosystem."

Second Quarter 2022 Financial Results

Revenue for the three months ended June 30, 2022 was $80.6 million, an increase of 9% compared with $74.2 million in the second quarter of 2021. Testing services revenue for the second quarter of 2022 was $67.1 million, compared with $64.9 million in the same period of 2021. Product revenue in the three months ended June 30, 2022 was $6.7 million, compared to $6.9 million in the same period of 2021. Patient and digital solutions revenue for the second quarter of 2022 was $6.8 million, compared to $2.4 million in the same period of 2021.

For the second quarter of 2022, net loss was $21.7 million compared to a net loss of $1.9 million in the same period of 2021. Basic and diluted net loss per share was $0.41 in the second quarter of 2022, compared to basic and diluted net loss per share of $0.04 in the second quarter of 2021.

Non-GAAP net loss was $7.0 million in the second quarter of 2022 compared to a $5.9 million non-GAAP net income in the second quarter of 2021. Diluted non-GAAP net loss per share was $0.13 in the second quarter of 2022, compared to a diluted non-GAAP net income per share of $0.11 in the second quarter of 2021.

Adjusted EBITDA for the second quarter of 2022 was a loss of $5.7 million, compared to an adjusted EBITDA gain of $6.8 million in the second quarter of 2021.

Cash, cash equivalents and marketable securities were $306.2 million as of June 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 $325 million to $335 million due to higher than expected mix of commercial patients from the success of new launches and market expansion.

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. 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 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 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.

CareDx, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

Testing services revenue

$

67,135

 

 

$

64,890

 

 

$

133,579

 

 

$

124,171

 

Product revenue

 

6,714

 

 

 

6,861

 

 

 

13,502

 

 

 

12,639

 

Patient and digital solutions revenue

 

6,785

 

 

 

2,437

 

 

 

12,969

 

 

 

4,778

 

Total revenue

 

80,634

 

 

 

74,188

 

 

 

160,050

 

 

 

141,588

 

Operating expenses:

 

 

 

 

 

 

 

Cost of testing services

 

18,230

 

 

 

17,235

 

 

 

35,858

 

 

 

33,718

 

Cost of product

 

3,887

 

 

 

5,205

 

 

 

8,286

 

 

 

8,852

 

Cost of patient and digital solutions

 

5,422

 

 

 

1,533

 

 

 

10,277

 

 

 

2,982

 

Research and development

 

22,632

 

 

 

19,036

 

 

 

44,512

 

 

 

35,040

 

Sales and marketing

 

26,950

 

 

 

19,599

 

 

 

50,098

 

 

 

35,051

 

General and administrative

 

25,232

 

 

 

16,322

 

 

 

51,791

 

 

 

31,545

 

Total operating expenses

 

102,353

 

 

 

78,930

 

 

 

200,822

 

 

 

147,188

 

Loss from operations

 

(21,719

)

 

 

(4,742

)

 

 

(40,772

)

 

 

(5,600

)

Other (expense) income:

 

 

 

 

 

 

 

Interest income, net

 

478

 

 

 

1

 

 

 

667

 

 

 

127

 

Change in estimated fair value of common stock warrant liability

 

48

 

 

 

(65

)

 

 

75

 

 

 

(38

)

Other (expense) income, net

 

(553

)

 

 

2,779

 

 

 

(1,376

)

 

 

2,534

 

Total other (expense) income

 

(27

)

 

 

2,715

 

 

 

(634

)

 

 

2,623

 

Loss before income taxes

 

(21,746

)

 

 

(2,027

)

 

 

(41,406

)

 

 

(2,977

)

Income tax benefit

 

49

 

 

 

100

 

 

 

61

 

 

 

363

 

Net loss

$

(21,697

)

 

$

(1,927

)

 

$

(41,345

)

 

$

(2,614

)

Net loss per share:

 

 

 

 

 

 

 

Basic

$

(0.41

)

 

$

(0.04

)

 

$

(0.78

)

 

$

(0.05

)

Diluted

$

(0.41

)

 

$

(0.04

)

 

$

(0.78

)

 

$

(0.05

)

Weighted-average shares used to compute net loss per share:

 

 

 

 

 

 

 

Basic

 

53,249,545

 

 

 

52,224,300

 

 

 

53,133,149

 

 

 

51,705,587

 

Diluted

 

53,249,545

 

 

 

52,224,300

 

 

 

53,133,149

 

 

 

51,705,587

 

CareDx, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands) 

 

June 30, 2022

 

December 31, 2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

166,832

 

 

$

348,485

 

Marketable securities

 

139,388

 

 

 

 

Accounts receivable

 

70,142

 

 

 

59,761

 

Inventory

 

18,861

 

 

 

17,186

 

Prepaid and other current assets

 

8,657

 

 

 

7,928

 

Total current assets

 

403,880

 

 

 

433,360

 

Property and equipment, net

 

32,904

 

 

 

22,044

 

Operating leases right-of-use assets

 

15,841

 

 

 

17,993

 

Intangible assets, net

 

46,318

 

 

 

50,195

 

Goodwill

 

37,084

 

 

 

36,983

 

Restricted cash

 

204

 

 

 

211

 

Other assets

 

5,057

 

 

 

5,835

 

Total assets

$

541,288

 

 

$

566,621

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

16,892

 

 

$

13,337

 

Accrued compensation

 

14,631

 

 

 

26,042

 

Accrued and other liabilities

 

46,933

 

 

 

37,922

 

Total current liabilities

 

78,456

 

 

 

77,301

 

Deferred tax liability

 

25

 

 

 

415

 

Common stock warrant liability

 

64

 

 

 

139

 

Deferred payments for intangible assets

 

2,877

 

 

 

5,041

 

Operating lease liability, less current portion

 

16,065

 

 

 

17,394

 

Other liabilities

 

252

 

 

 

455

 

Total liabilities

 

97,739

 

 

 

100,745

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Common stock

 

52

 

 

 

52

 

Additional paid-in capital

 

875,213

 

 

 

853,683

 

Accumulated other comprehensive loss

 

(7,182

)

 

 

(4,670

)

Accumulated deficit

 

(424,534

)

 

 

(383,189

)

Total stockholders’ equity

 

443,549

 

 

 

465,876

 

Total liabilities and stockholders’ equity

$

541,288

 

 

$

566,621

 

CareDx, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(In thousands)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Cost of testing services reconciliation:

 

 

 

 

 

 

 

GAAP cost of testing services

$

18,230

 

 

$

17,235

 

 

$

35,858

 

 

$

33,718

 

Stock-based compensation expense

 

(566

)

 

 

(570

)

 

 

(585

)

 

 

(965

)

Acquisition related-amortization of purchased intangibles

 

(329

)

 

 

(329

)

 

 

(658

)

 

 

(658

)

Non-GAAP cost of testing services

$

17,335

 

 

$

16,336

 

 

$

34,615

 

 

$

32,095

 

Cost of product reconciliation:

 

 

 

 

 

 

 

GAAP cost of product

$

3,887

 

 

$

5,205

 

 

$

8,286

 

 

$

8,852

 

Stock-based compensation expense

 

(402

)

 

 

(214

)

 

 

(530

)

 

 

(289

)

Acquisition related-amortization of purchased intangibles

 

(437

)

 

 

(489

)

 

 

(890

)

 

 

(954

)

Non-GAAP cost of product

$

3,048

 

 

$

4,502

 

 

$

6,866

 

 

$

7,609

 

Cost of patient and digital solutions reconciliation:

 

 

 

 

 

 

 

GAAP cost of patient and digital solutions

$

5,422

 

 

$

1,533

 

 

$

10,277

 

 

$

2,982

 

Stock-based compensation expense

 

(391

)

 

 

(230

)

 

 

(583

)

 

 

(338

)

Acquisition related-amortization of purchased intangibles

 

(236

)

 

 

(141

)

 

 

(472

)

 

 

(249

)

Non-GAAP cost of patient and digital solutions

$

4,795

 

 

$

1,162

 

 

$

9,222

 

 

$

2,395

 

Research and development expenses reconciliation:

 

 

 

 

 

 

 

GAAP research and development expenses

$

22,632

 

 

$

19,036

 

 

$

44,512

 

 

$

35,040

 

Stock-based compensation expense

 

(2,323

)

 

 

(1,940

)

 

 

(4,513

)

 

 

(3,298

)

Non-GAAP research and development expenses

$

20,309

 

 

$

17,096

 

 

$

39,999

 

 

$

31,742

 

Sales and marketing expenses reconciliation:

 

 

 

 

 

 

 

GAAP sales and marketing expenses

$

26,950

 

 

$

19,599

 

 

$

50,098

 

 

$

35,051

 

Stock-based compensation expense

 

(3,907

)

 

 

(2,632

)

 

 

(7,030

)

 

 

(4,292

)

Acquisition related-amortization of purchased intangibles

 

(543

)

 

 

(461

)

 

 

(1,148

)

 

 

(842

)

Non-GAAP sales and marketing expenses

$

22,500

 

 

$

16,506

 

 

$

41,920

 

 

$

29,917

 

General and administrative expenses reconciliation:

 

 

 

 

 

 

 

GAAP general and administrative expenses

$

25,232

 

 

$

16,322

 

 

$

51,791

 

 

$

31,545

 

Stock-based compensation expense

 

(5,004

)

 

 

(3,811

)

 

 

(9,986

)

 

 

(6,763

)

Change in estimated fair value of contingent consideration

 

(500

)

 

 

147

 

 

 

(564

)

 

 

191

 

Acquisition related fees and expenses

 

(186

)

 

 

(210

)

 

 

(329

)

 

 

(381

)

Non-GAAP general and administrative expenses

$

19,542

 

 

$

12,448

 

 

$

40,912

 

 

$

24,592

 

Total other income (expense) reconciliation:

 

 

 

 

 

 

 

GAAP other (expense) income, net

$

(27

)

 

$

2,715

 

 

$

(634

)

 

$

2,623

 

Unrealized (gain) loss on long-term marketable equity securities

 

(21

)

 

 

(3,090

)

 

 

486

 

 

 

(3,090

)

Change in estimated fair value of common stock warrant liability

 

(48

)

 

 

65

 

 

 

(75

)

 

 

38

 

Accretion of liability

 

37

 

 

 

64

 

 

 

92

 

 

 

144

 

Non-GAAP other expense, net

$

(59

)

 

$

(246

)

 

$

(131

)

 

$

(285

)

Income tax benefit reconciliation:

 

 

 

 

 

 

 

GAAP income tax benefit

$

49

 

 

$

100

 

 

$

61

 

 

$

363

 

Tax effect related to amortization of purchased intangibles

 

(107

)

 

 

(117

)

 

 

(220

)

 

 

(251

)

Non-GAAP income tax (loss) benefit

$

(58

)

 

$

(17

)

 

$

(159

)

 

$

112

 

CareDx, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(In thousands, except share and per share data) 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

GAAP net loss

$

(21,697

)

 

$

(1,927

)

 

$

(41,345

)

 

$

(2,614

)

Stock-based compensation expense

 

12,593

 

 

 

9,397

 

 

 

23,227

 

 

 

15,945

 

Unrealized (gain) loss on long-term marketable equity securities

 

(21

)

 

 

(3,090

)

 

 

486

 

 

 

(3,090

)

Acquisition related-amortization of purchased intangibles

 

1,545

 

 

 

1,420

 

 

 

3,168

 

 

 

2,703

 

Acquisition related fees and expenses

 

186

 

 

 

210

 

 

 

329

 

 

 

381

 

Change in estimated fair value of contingent consideration

 

500

 

 

 

(147

)

 

 

564

 

 

 

(191

)

Change in estimated fair value of common stock warrant liability

 

(48

)

 

 

65

 

 

 

(75

)

 

 

38

 

Accretion of liability

 

37

 

 

 

64

 

 

 

92

 

 

 

144

 

Tax effect related to amortization of purchased intangibles

 

(107

)

 

 

(117

)

 

 

(220

)

 

 

(251

)

Non-GAAP net (loss) income

$

(7,012

)

 

$

5,875

 

 

$

(13,774

)

 

$

13,065

 

 

 

 

 

 

 

 

 

GAAP basic and diluted net loss per share

$

(0.41

)

 

$

(0.04

)

 

$

(0.78

)

 

$

(0.05

)

 

 

 

 

 

 

 

 

Non-GAAP basic net (loss) income per share

$

(0.13

)

 

$

0.11

 

 

$

(0.26

)

 

$

0.25

 

Non-GAAP diluted net (loss) income per share

$

(0.13

)

 

$

0.11

 

 

$

(0.26

)

 

$

0.24

 

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP basic net loss/income per share

 

53,249,545

 

 

 

52,224,300

 

 

 

53,133,149

 

 

 

51,705,587

 

Shares used in computing non-GAAP diluted net loss/income per share

 

53,249,545

 

 

 

54,722,122

 

 

 

53,133,149

 

 

 

54,311,138

 

CareDx, Inc.

Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures

(Unaudited)

(In thousands) 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Non-GAAP net (loss) income

$

(7,012

)

 

$

5,875

 

 

$

(13,774

)

 

$

13,065

 

Interest income

 

(478

)

 

 

(1

)

 

 

(667

)

 

 

(127

)

Income tax benefit (expense)

 

58

 

 

 

17

 

 

 

159

 

 

 

(112

)

Depreciation expense

 

1,162

 

 

 

668

 

 

 

2,102

 

 

 

1,255

 

Other expense, net

 

537

 

 

 

247

 

 

 

798

 

 

 

412

 

Adjusted EBITDA

$

(5,733

)

 

$

6,806

 

 

$

(11,382

)

 

$

14,493

 

 

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