CareDx, Inc.

Please stand by. Your program is about to begin. If you should require operator assistance during your conference today, please press star zero. Good day, everyone, and welcome to today's CARE DX second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask a question during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star and 2. Please note this call is being recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Caroline Corner, Investor Relations.

Thank you, Operator. Good afternoon. Thank you for joining us today. Earlier today, CareDX released financial results for the second quarter 2025 ending June 30, 2025. The release is currently available on the company's website at www.caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, and Abhishek Jain, Chief Financial 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 within the meaning of the federal security laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, our examination of historical operating trends, expectations regarding coverage decisions, pricing and enrollment matters, and our financial expectations and results 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. For a list and descriptions of the risks and uncertainties associated with our business, please see our filings with the Security and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, August 6, 2025. CARE DX disclaims 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 financial measures that are not calculated in accordance with generally accepted accounting principles. Reconciliation of the most directly comparable GAAP financial measure may be found in today's earnings release filed with the SEC. I will now turn the call over to John.

Thank you, Caroline, and welcome to everyone joining today's call. This week concluded the World Transplant Congress, or WTC, the largest global transplant event of 2025 held here in San Francisco, California. At the event, we unveiled our evolved brand identity with a fresh new look that embodies the notion that we are together in transplant with the clinicians and patients we serve. At the WTC, there were more than 40 abstracts and 16 oral presentations with scientific data on kidney, heart, lung, and liver demonstrating CARDI-X's advances in AI predictive diagnostics, transplant access, and organ-specific innovation. These studies reflect the strength of our scientific collaborations and the growing body of evidence supporting CARE-DX solutions. We view this breadth of scientific data as a leading indicator of future peer-reviewed publications and clinical adoption. On our WTC microsite at caredx.com slash WTC, You can see our new branding, view the full list of CARITYX abstracts presented this week, and sign up to participate in our post-conference webinar highlighting the data presented on CARITYX products. Now on to the quarter. Throughout my prepared remarks, I will be referencing our presentation posted on the investor relations section of our website. We made good progress against our growth drivers and financial KPIs in the second quarter, as outlined on slides three and four of our presentation. Adjusted revenue, which excludes revenue associated with tests performed in prior periods, was $90.5 million, up 14% year-over-year. Excluding the prior period tests, adjusted EBITDA was $9.1 million compared to an adjusted loss of $300,000 last year. With half of the year completed, we are reaffirming the midpoint of our 2025 revenue guidance and narrowing the range to $367,000 to $373 million. We continue to expect adjusted EBITDA of $29 to $33 million. Abhishek will provide additional detail on our guidance in his prepared remarks. In testing services, adjusted testing services revenue was $66 million for the second quarter, up 14% year-over-year, as shown on slide 5. We delivered approximately 49,500 tests in the second quarter, up 13% from the prior year as shown on slide six. It was our eighth consecutive quarter of sequential testing volume growth, with growth across all three organs, heart, kidney, and lung. In kidney, we have made significant progress expanding surveillance testing protocols. On the third quarter 2024 call, we said it would take two to three quarters to turn surveillance protocols back on. I'm pleased to share that in the second quarter, we surpassed 60 surveillance protocols nationally and kidney testing volume grew nearly 20% year over year. Our growth strategy is working. To further differentiate our solution in kidney transplant monitoring, we launched Allishore Plus at this week's World Transplant Congress. AlloSure Plus is an AI-driven diagnostic that integrates AlloSure results and standard of care measures such as serum creatinine and protein urea to deliver a personalized risk score of rejection. We plan for AlloSure Plus to be seamlessly reported with every AlloSure result via our Epic integrations as we roll out Epic connectivity in the second half of the year. Multiple abstracts at WTC underscore the clinical utility of AlloSure Plus, including an abstract by Dr. Romain Brosseau of the Paris Transplant Group, who presented data highlighted on slide six from over 3,000 patients and 4,000 biopsies across 20 global centers, validating the performance of AlloSure Plus risk rejection score and demonstrated that it accurately identifies both subclinical and acute rejection, supporting earlier and more precise clinical decision making. There were over 30 abstracts on Allosure Kidney at the WTC, including an oral abstract highlighted on slide seven of our presentation with new data from the K-OR study presented by Dr. David Wojciechowski at the UT Southwestern Medical School that showed early elevations in Allishore post-transplant are prognostic for graft loss at three years, laying the foundation for earlier intervention and immune modulation strategies. This data reinforces the value of Allishore kidney in early risk stratification and long-term management. We also had a strong representation in heart transplantation at WTC, with nine abstracts highlighting CARDI-X products, including five from the SURE registry, presented by leading institutions such as NYU, University of Washington, Cedars-Sinai, University of Chicago, and UCLA. These studies reinforced the clinical value of heart care. For example, an analysis of 2,200 patients in the SURE study presented by Dr. Jeff Teutoburg of Stanford University on slide 8 of our presentation, shows that in patients with persistently elevated dual positive heart care, we're 90% more likely to experience adverse outcomes post-heart transplant regardless of biopsy results. These findings support the use of heart care to reduce reliance on biopsies through multimodal surveillance, combining AlloMap Heart and AlloSure Heart to provide a more comprehensive and predictive view of allograft health. Commercially, reception has been strong for our expanded indication for AlloSure Heart for pediatric patients. There's a movement towards standardized protocol development at a number of pediatric heart transplant centers who recognize the need for non-invasive testing in this population due to the risks and challenges of biopsy under general anesthesia for pediatrics. Recently, a youth patient and his mother spoke to our company at a town hall and shared their near-death experience with a surveillance biopsy under general anesthesia. It is stories like theirs that embolden us to deliver on our mission to create life-changing solutions that enable patients to thrive. Turning to lung, at WTC, Dr. Sam Waite of the UCLA Lung Transplant Program presented data on slide 9 of our presentation showing the power of precision monitoring with Allosure Lung. The study showed that tracking relative changes in Allosure Lung improved detection of subclinical lung allograft injury and infection. This approach demonstrated higher sensitivity and specificity, especially in single lung recipients. reinforcing the clinical value of Alisher Lung in guiding earlier interventions. In evidence generation, we made big strides this quarter, executing against our market access strategy for publishing evidence, expanding medical policy coverage, and getting into payer networks. Today, we announced a significant milestone. The first manuscript of the Kaor study was published in the American Journal of Transplantation. The study highlighted on slide 10 of our presentation is the largest prospective study of its kind and with 56 participating centers that enrolled over 1,700 kidney transplant patients who received over 18,000 Allishore tests in the study. The study followed the DART protocol, which prescribed seven tests in year one and four annually in years two and three. The manuscript findings confirm that Allishore Kidney is a clinically actionable tool that enhances rejection management by showing that Allishore Kidney levels correlate with rejection severity, higher levels associated with ABMR and mixed rejection, and lower levels linked to borderline or TCMR1A. This stratification capability positions AlloShore Kidney as a critical tool for tailoring immunosuppression and biopsy decisions based on individualized patient risk. In the second quarter, we added 4.2 million new covered lives for Allomap Heart and became an in-network provider with a large commercial health plan in the Northeast covering 1.2 million lives. Importantly, our Allishore CPT code went live in April, and in July at the Clinical Lab fee schedule meeting, the CLFS advisory panel voted to crosswalk the code to a similar testing code. We anticipate the agency will release preliminary pricing recommendations in September and provide the opportunity for public comment. I would like to spend a few minutes now on the draft LCD policy, for molecular testing for solid organ allograft rejection published on July 17th. We view the draft policy as a significant step forward. The policy affirms coverage for surveillance testing without a tie to protocol biopsy, which has been the primary focus of our advocacy efforts. As a reminder, the draft LCD public comment period lasts for 45 days after publication, Medicare rules generally require draft policies to be finalized within one year as outlined on slide 11 of our presentation. We are currently in the public comment period until August 31st and intend to comment on several aspects of the draft LCD, including allowing clinicians to determine the cadence of surveillance testing based upon established practices and the patient's pretest risk of rejection. the extensive evidence supporting allomap heart and heart care as a multimodal method that identifies rejection with greater accuracy than cell-free DNA or gene expression testing alone, and the newly proposed concept of bundled payments for surveillance testing. We plan to publish our letter on our website following the close of the comment period. Today, I would like to provide a framework for how we are thinking about the potential impact of the draft policy. I'll describe two separate potential scenarios that we have modeled. In the first scenario, assuming the draft policy is implemented as written with bundled payments for surveillance testing, we estimate the impact of surveillance testing frequency limits to be an approximate $15 million headwind on a full year basis. With commercial focus on driving adherence to testing protocols, we estimate over time the proportion of patients that receive more tests than the frequency limits will exceed the proportion receiving fewer tests. Half of this impact comes from kidney surveillance testing in year one that exceeds the proposed frequency limit and the other half from heart surveillance testing in years two and three that exceed the proposed frequency limit. In the second scenario, if the draft policy were to be finalized without bundled payments for surveillance testing and without frequency limits, and the proposed policy to pay for only one molecular test per date of service is maintained, such that Allomap Heart is effectively no longer reimbursed as a part of heart care, we estimate the impact to be an approximate 30 million headwind on a full year basis. Importantly, We continue to drive protocol adoption and adherence, which has been demonstrated to improve patient outcomes and have not changed how we engage and support our customers in response to the draft policy. Once the draft is finalized and we have a clear estimate, we will update our long range financial expectations. Moving on to our operational excellence initiatives, We are continuing to improve our enterprise infrastructure and business processes to operate more efficiently, such that revenue growth outpaces operating expenses as we scale. We made progress with the launch of our EPIC instance, which we believe will be a key differentiator, making it easier for healthcare providers to order AlloSure and Allomap testing and receive test results. We anticipate going live with three pilot sites through Epic Aura in the third quarter and plan to make a broader push for Epic integrations starting in the fourth quarter. In the second quarter, we continue to make progress with revenue cycle management, driving confidence in future testing ASP growth. As illustrated on slide 12 of our presentation, we have now implemented 100% of RCM workflows, and are performing 100% of patient insurance eligibility verifications. As a result of these and other changes to our processes, we have driven improvements across various RCM KPIs, including a 60% reduction in claim submission time, a 45% increase in prior authorization success rate, an 800 basis point reduction in claims rejection rate, and a 160% improvement in total appeals volume since last December. These behind-the-scenes wins are key leading indicators for longer-term ASP growth and are beginning to be reflected financially. Cash collections in the second quarter accelerated to 105% of adjusted testing services revenue and payment per test is increasing across all tests and all payer classes. I'll now turn to patient and digital solutions, which includes our transplant pharmacy, software tools, and remote patient monitoring services. In the second quarter, we reported revenue of approximately $12.8 million, representing 19% growth compared to last year, as highlighted on slide 13 of our presentation. our go-to-market strategy of solution selling is working, and we continue to see our patient and digital solutions helping to unlock growth opportunities for testing services. In the quarter, we released an update to our quality reporting software, ZynQuopy, that now includes an IOTA program performance composite score calculation that accounts for growth in transplant volume, organ utilization rates, and patient outcomes. We have received very positive feedback on the tool with more than 70 transplant programs participating in our educational webinar. And although a center's year one performance will not be calculated until July 2026, our quality reporting tool enables them to monitor performance in real time throughout the year. Turning now to lab products, which includes PCR kits for rapid deceased donor HLA typing, NGS kits for transplant recipient HLA typing globally, and IVD monitoring assays for solid organ and stem cell transplant recipients outside of the U.S., revenue of $11.8 million was up 12% year-over-year, driven by sales of our Alloseq TX, our next-generation sequencing HLA typing kits for organ recipients. In summary, we had a strong second quarter executing across all of our key drivers, including our go-to-market strategy, evidence generation, and operational excellence. Now, I'll turn the call over to Abhishek to share more details on our second quarter financial results.