CareDx Q1 Earnings Call Highlights

Key Points

• CareDx reported Q1 revenue up 39% YoY to $118 million, driven by a 48% rise in testing services and a 33% increase in patient/digital solutions; GAAP net income was $3 million and adjusted EBITDA was $19 million (up "300%+"), with testing volume of 54,900.
• The company is divesting its lab products business for $170 million upfront (≈$160M net after ~$10M expenses), expected to close by end of Q3, and has embedded $45–50M of product revenue and $3–9M of EBITDA in 2026 guidance assumptions.
• CareDx agreed to acquire Naveris to enter viral‑mediated cancers; Naveris’ TTMV assay has ADLT Medicare coverage with ~$1,800 reimbursement, ~130,000 commercial tests and estimated 2025 revenue of $34M, but its results are not included in 2026 guidance.

CareDx NASDAQ: CDNA reported first-quarter 2026 results showing faster growth in its core testing and patient services businesses, while outlining two major portfolio moves: the pending divestiture of its lab products business and an agreement announced on the call date to acquire Naveris.

Total revenue grew 39% year over year to $118 million, driven by a 48% increase in testing services revenue and 33% growth in patient and digital solutions, according to Chief Operating Officer and Chief Financial Officer Keith Kennedy. Testing volume rose 17% to 54,900 tests. The company also posted GAAP net income of $3 million, or $0.05 per diluted share, and adjusted EBITDA of $19 million, which Kennedy said was up “300%+.”

Q1 results and operating metrics

Kennedy said testing services revenue increased to $91 million in the quarter, or $1,660 per test as reported. He also highlighted that results included “out-of-period revenue” from collections on prior receivables. CareDx collected $14 million in excess of December 31 receivables, which Kennedy said contributed $260 per reported test; excluding that, revenue per test was $1,405.

Non-GAAP gross margin improved to 73% in the quarter, while non-GAAP operating expenses were $69 million, or 59% of revenue, including about $2 million of incremental bonus accrual tied to performance “above plan,” Kennedy said. The company ended the quarter with $198 million in cash and cash equivalents and no debt.

Cash collections increased 52% year over year to $121 million, and Kennedy said cash flow from operations was $4 million for the quarter and $72 million over the last four quarters.

Updated 2026 guidance and pricing dynamics

CareDx raised its 2026 revenue outlook to $447 million to $465 million and forecast adjusted EBITDA of $43 million to $57 million. At the midpoint, Kennedy said the updated ranges imply 20% revenue growth and a 58% increase in adjusted EBITDA year over year.

For the full year, the company expects testing volume of 224,000 to 229,000 tests. Kennedy described expected seasonality, modeling an increase of about 1,700 tests from Q1 to Q2, flat volumes from Q2 to Q3, and another step-up of about 1,800 tests from Q3 to Q4.

At the midpoint of guidance, CareDx expects:

• Testing services revenue: $337 million to $351 million (25% growth at the midpoint)
• Patient digital revenue: $63 million to $66 million (13% growth at the midpoint)
• Product revenue: $45 million to $50 million (flat at the midpoint)

Kennedy said CareDx expects revenue per test to increase 10% year over year to the midpoint of its guide, driven primarily by a higher average accrual rate. He also modeled out-of-period revenue of $7.5 million in Q2, $5 million in Q3, and none in Q4. The company also incorporated an expected Local Coverage Determination (LCD) impact: Kennedy said it is modeled as a negative to revenue—“not volume”—of $7.5 million in the second half of 2026.

In Q&A, Chief Executive Officer John Hanna said the company continued to expect the MolDX-related LCD timing to be “mid-2026,” adding that based on the July 15 draft issuance date, CareDx anticipated it could arrive “sometime at the end of the second quarter or early third quarter.”

Divestiture of lab products business

Hanna said CareDx’s planned divestiture of its lab products business “simplifies the company” and sharpens focus on “precision medicine testing services and digital and patient solutions.” He noted the lab products unit includes manufacturing, regulatory, and commercial operations distinct from its U.S.-based testing services platform.

Financially, Hanna said the transaction provides $170 million of upfront cash consideration at closing. Kennedy added that CareDx expects to net about $160 million after an estimated $10 million in transaction expenses, and the company expects the deal to close by the end of the third quarter.

Kennedy also provided carve-out assumptions embedded in full-year guidance, noting that in Q1 the products business generated about $10 million of revenue and less than $1 million of adjusted EBITDA. For 2026 guidance purposes, CareDx assumes the products business generates $45 million to $50 million in revenue and contributes $3 million to $9 million in EBITDA, though he cautioned that results may vary based on the closing date and transition services.

Naveris acquisition expands into viral-mediated cancers

CareDx also announced an agreement to acquire Naveris, which Hanna described as a targeted expansion into viral-mediated cancers rather than “a move to broadly pursue MRD as a category.” Hanna said the addition is focused on a space where “longitudinal molecular monitoring is already reimbursed, embedded in specialty workflows, and aligned with how we operate our core business today.”

Hanna said Naveris has performed more than 130,000 commercial tests, has roughly 2,000 active ordering physicians, and employs about 100 people. The test is covered for about 100 million lives, including Medicare, and has ADLT designation with “an $1,800 Medicare reimbursement per test,” he said. Naveris’ estimated unaudited 2025 revenue was $34 million, and Hanna said CareDx expects it to grow “by 30%-40% or greater over the next 3 years.” In Q&A, Kennedy added that Naveris’ revenue grew 75% from 2024 to 2025.

Hanna said Naveris’ platform uses a “tumor tissue modified viral DNA, or TTMV,” approach and is “tumor-naive by design,” which means it does not require tumor tissue. He also cited a body of evidence including 56 peer-reviewed publications, and referenced a multicenter real-world observational study of 543 patients where the Naveris test showed a negative predictive value of 98% and a positive predictive value of 95% during post-treatment MRD surveillance. Hanna said the median lead time to identify recurrence was four months ahead of standard of care methods.

Chief Medical Officer Dr. Jeffrey Teuteberg described how the test can fit into head and neck cancer workflows, including aiding diagnosis when biopsies are inconclusive and enabling longitudinal post-treatment monitoring aligned with guideline-recommended follow-up intervals. Teuteberg said the surveillance protocol includes quarterly testing in years one and two and semi-annual testing in years three through five—“a total of 14 tests per patient over the first 5 years post-treatment,” followed by annual testing thereafter. He added that Naveris is currently “the only Medicare-covered assay for HPV-positive head, neck, and anal cancer MRD.”

On commercial execution, Hanna told analysts that Naveris already has an established channel into specialty providers, particularly ENTs and medical oncologists, and he said CareDx does not expect to build “a net new channel.” He said CareDx believes it can accelerate growth through repeat-testing expertise, workflow optimization, and Epic integration capabilities. He also said 70% of U.S. transplant centers use at least one CareDx patient or digital solution, and that broader solution adoption tends to embed CareDx into workflows and increase testing and revenue at those centers.

CareDx did not include any Naveris contribution in its 2026 revenue guidance, Hanna confirmed in Q&A.

About CareDx NASDAQ: CDNA

CareDx, Inc NASDAQ: CDNA is a precision diagnostics company focused on the care of transplant patients. The firm develops and commercializes non‐invasive tests designed to detect organ transplant rejection and infection risk, helping physicians make informed management decisions throughout the post‐transplant journey.

The company's core product portfolio includes AlloMap®, a gene expression profiling test for heart transplant recipients, and AlloSure®, a donor‐derived cell‐free DNA assay used primarily in kidney transplant monitoring.

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