CareDx, Inc.

Hello everyone. Thank you for joining us and welcome to the CARE DX Q4 2025 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 star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Caroline Corner, Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon. Thank you for joining us today. Earlier today, CareDX released financial results for the fourth quarter and full year 2025, ending December 31, 2025. These results are 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, Keith Kennedy, Chief Operating Officer, and Nathan Smith, 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. 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 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 under 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, February 24, 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 or an 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.

Thank you, Caroline, and welcome to everyone joining today's call. 2025 was a transformative year for CareDx. We advanced our market leadership across heart, lung, and kidney transplantation with an expanded commercial footprint, including a broader sales and medical presence to execute our solution selling strategy that drove growth across all business segments. We launched new products to further differentiate our offerings, such as Alisher Heart for Pediatrics to service the entire heart transplant market, Alisher Plus, our AI-derived model for kidney transplant risk assessment, and Histomap Kidney, our first tissue-based gene expression classifier for identifying rejection subtypes. We generated meaningful evidence to further build clinical belief in our molecular testing solutions, including multiple published manuscripts from the large prospective SHORE and KOR registries in heart and kidney transplantation respectively. At the same time, we invested in critical infrastructure, including significantly advancing our revenue cycle management function through automation and AI deployment and launching Epic Aura, designed to improve our customers' experience with test ordering and reporting by reducing sample holds and supporting faster, more reliable test processing. Our innovation strategy and disciplined execution have set us on a path to achieve the long-range plan we laid out in October 2024. I believe CARE-DX is well positioned for our next phase of innovation, scale, and sustained growth as a leading precision diagnostics company. In my prepared remarks today, I'm going to highlight some of our accomplishments from the fourth quarter and then detail our key growth drivers for 2026. Then I'll turn it over to Nathan to review the quarter and full year 2025 financial highlights and our full year 2026 financial guidance. Briefly, our fourth quarter financial performance was strong. We delivered revenue of $108 million, representing 25% year-over-year growth. Testing volume accelerated to 17% growth year-over-year. We maintained a 69% non-GAAP gross margin and generated positive adjusted EBITDA of $7 million in the quarter. We continue to be disciplined in our capital allocation and maintain a strong balance sheet. In the first quarter, we returned capital to shareholders through an additional 12 million of share repurchases. In total, in 2025, we have repurchased approximately 9% of our outstanding shares. We ended the quarter with approximately 200 million in cash, cash equivalents and marketable securities, and no debt, providing significant financial flexibility. Overall, I believe our results reflect discipline execution, improving cash generation, and a solid foundation as we continue to execute our growth strategy. Now on to the business highlights. Testing services growth was strong across all three organs, heart, lung, and kidney. Revenue was 78 million for the fourth quarter, an increase of 23% year over year. We delivered approximately 53,000 tests in the fourth quarter, up 17% from the prior year. Kidney testing continued to lead our growth, supported by both increased surveillance protocol adoption and expanded for-cause use of Allishore kidney at transplant centers. Generally, when a center initiates a surveillance testing protocol, they will start newly transplanted patients on that testing schedule. As centers restarted their surveillance protocols throughout the year, it had a gradual layering effect of increasing test volumes, leading to a strong fourth quarter. Although the number of kidney transplants was relatively flat year over year in 2025, we are encouraged by the year two IOTA proposed rule, which reinforces the need to increase kidney transplants. including through the use of expanded organs that are considered medically complex. Based on CMS's forecasted growth rates, IOTA may be an additional tailwind for our testing services business, where our growth rate is already outpacing the market. We believe the proposed framework aligns well with our portfolio and positions testing services to benefit as IOTA progresses into its second year. In heart transplantation, during the fourth quarter, we announced the publication of the third manuscript of the Surveillance Heart Care Outcomes Registry, or SURE, in the Journal of Heart and Lung Transplantation. This large multi-center study analysis included 1,934 heart transplant recipients across 59 centers and demonstrated that heart care's combined molecular testing provides independent prognostic information beyond biopsy alone. Patients with an abnormal heart care result at any time from two months to five years post-transplant were associated with approximately three-fold increase in the 30-day risk of graft dysfunction and cardiovascular death. even when there was no biopsy evidence of rejection. These findings reinforce the clinical value of heart care in identifying higher risk patients who may benefit from closer monitoring and more personalized post-transplant management, further strengthening the scientific foundation of our heart transplant franchise. Over the course of 2025, we progressed from stabilizing our revenue cycle management function to demonstrating clear RCM strength. After installing our new team in the first half of 25, collections improved consistently in the third quarter and accelerated in the fourth quarter. For the year, reimbursement improved materially. with claim rejection rates declined by more than 60% over the course of 2025 through September, and overall zero pay claims improved by approximately 10% through the same period. These improvements were supported by increased automation, streamlined workflows, and more effective appeals execution, driving what we expect to be more predictable and durable revenue capture. Just as important, we improve the patient experience. We are more proactively managing prior authorizations, timely claims submission, and appeals to help patients receive their insurance benefits and diminish uncertainty. We believe this disciplined execution strengthens provider and patient confidence in CARE-DX as their laboratory of choice. Across 25, we delivered meaningful improvements in cash conversion and reimbursement, reflecting stronger execution across billing, collections, and appeals. I'll turn now to patient and digital solutions, which includes our transplant pharmacy, software tools, and remote patient monitoring services. Our solution selling strategy is working. We delivered a strong fourth quarter with revenue of $17 million, up 47% year over year. Our integrated patient and digital offerings continue to meaningfully deepen customer relationships. As we continue to engage our customers with these solutions, we're seeing the benefits of tighter integration across the transplant journey, improving the experience for patients and care teams while reinforcing the value of our overall precision medicine platform. Turning to lab products business, we delivered solid performance in the fourth quarter, with revenue of $13 million, up 17% year over year, reflecting continued demand across both domestic and international markets. Growth was supported by ongoing adoption of our HLA typing and analysis solutions, as well as stronger customer engagement at key scientific forums. During the quarter, we continued to advance our product portfolio, including launching ALICEQ TX11 and SCORE7, which are designed to improve workflow efficiency, scalability, and regulatory alignment for transplant laboratories. ALICEQ TX11 is our next-generation HLA typing solution, featuring enhanced Class II loci coverage to improve donor-to-recipient matching in both solid organ and stem cell transplantation. We also achieved important regulatory milestones, including IVDR certification for ALICEQ-TX and Q-type in Europe, positioning the lab products business for sustained growth and broader global adoption going forward. Looking ahead to 2026, I want to lay out our key growth drivers for the year that will allow us to sustain a high level of product innovation and extend our leadership position in existing markets through our solution selling strategy. These initiatives span our pipeline advancement, go-to-market strategy, and evidence generation, and together they reinforce our ability to rapidly launch, iterate, and scale products across the platform. Importantly, this is a connected operating model designed to fuel growth and extend our leadership over time. These drivers are not just about scaling what we do today. They're about applying our platform to new high-impact markets. This year, I'm placing a significant emphasis on advancing our cell therapy pipeline, which we have referred to as Transplant Plus. On our February 12th investor call, we announced pivotal clinical validation results for Allogene, our first AI-powered NGS surveillance solution designed to predict relapse in patients with AML and MDS following allogeneic cell transplantation. Allogene represents an important milestone in our Transplant Plus strategy. positioning cardiacs to expand beyond solid organ transplant and into cell therapy, hematology, and oncology, areas where there remains a significant unmet need for sensitive, non-invasive relapse detection. The data were generated from the ACROBAT study, a prospective multicenter trial conducted across 11 U.S. transplant centers and demonstrating strong clinical performance recently presented at the Tandem 2026 Annual Meeting. In this analysis, alaheim identified relapse a median of 41 days earlier than clinical detection with 85% sensitivity and 92% specificity, and patients with a positive alaheim result at six months post-transplant showed a 12-fold higher risk of relapse compared to patients with negative results. These findings underscore the potential of a universal blood-based surveillance approach to provide earlier risk insight than traditional bone marrow-based or marker-specific methods. Strategically, we expect AllerHeim to broaden the long-term growth opportunity for CARE-DX by extending our molecular surveillance expertise into a large and growing cell therapy market. In the call, I laid out our anticipated pathway to commercialization, starting with publishing the results of the Acrobat trial, clear readiness in 2026, followed by commercial introduction in early 2027, and anticipated payer coverage in 2028. While still early, we believe Alekheme has the potential to become a foundational component of a broader molecular monitoring platform for cell therapy and hematologic malignancies, consistent with our disciplined, data-driven approach to innovation and portfolio expansion. Advancing our cell therapy pipeline is a top priority for 2026, and I plan to share more updates on this work throughout the year. Turning to go to market, I view our operational excellence initiatives and placing the customer experience at the center of everything we do as a key part of our go-to-market strategy. That message has resonated across the country with the more than 50 transplant centers I visited with personally over the last year. In 2026, we are placing a significant focus on epic integrations to make the customer experience simple and streamlined. Our pipeline of customers willing to integrate is significant, and we believe these integrations will drive further volume growth. As of today, seven transplant centers are fully live on our Epic Aura instance, making us one of the fastest implementers to date, according to Epic's team. An additional 14 transplant centers are in active implementation, with several more expected to formally kick off in the near term including large multi-site systems. Our pipeline for 2026 implementations is strong. Importantly, we're beginning to see early operational and commercial benefits from these integrations. As anticipated, Epic Aura implementations are improving the quality of electronic order data, and early indications show roughly 40% reduction in login-related issues which meaningfully improves the experience for clinicians. We're also encouraged by early signs of growth at initial live sites, where active levels have increased following go live. While it is still early, these signals reinforce our confidence that Epic integrations can support improved adoption, operational efficiency, and long-term growth as implementation continues to scale. In addition, in 2026, we are migrating our LIMS infrastructure to Epic Enterprise Solutions. This is a strategic infrastructure decision that allows us to establish a platform for lab test workflow and reporting that has two key advantages. First, the flexible infrastructure allows us to more rapidly launch new products in our lab, such as our cell therapy products, which I view as key to future growth. Second, we are able to exchange data with Epic centers more seamlessly for patient treatment purposes, even if we're not an Epic or integrated with the center. For example, if we need medical records to verify a patient's date of birth, today we have to call the center and ask for that information. With Epic Enterprise, we can reach into the EMR and pull the data seamlessly without to help eliminate interruptions in the timeline of patient test results or claim billing. Turning to clinical evidence, evidence is the foundation for building clinical belief in our testing solutions as the standard of care in solid organ transplantation. We think about evidence generation in 2026 across three dimensions. First is translational research. under the umbrella of our ImmuneScape program. This January, we announced our strategic collaboration with 10X Genomics to launch ImmuneScape, a multiomics research platform that we believe represents a significant advancement in our precision transplant medicine innovation pipeline. This initiative leverages 10X's cutting-edge single-cell and spatial biology technologies to decode the complex immune mechanisms underlying transplant rejection, particularly antibody-mediated rejection and microvascular inflammation. ImmuneScape builds on our existing diagnostic portfolio, including our recently launched histoMAP kidney platform and is designed to generate high-resolution biological insights that may inform our future clinical diagnostic development pipeline. By mapping immune cell populations and pathways, At higher resolution, this collaboration positions us to drive the discovery of next generation diagnostic solutions that can better predict therapeutic response and improve treatment selection while reinforcing our commitment to advancing personalized transplant care. Second, observational studies are a core pillar of our 2026 strategy. because they demonstrate the real-world utility of our testing services and their impact on physician behavior. We expect continued publications across kidney, heart, and lung that are critical to building belief, reinforcing adoption, and supporting market access. Large registries such as Kaor, Shure, and Alamo allow us to show longitudinal clinical utility across diverse populations and care settings. Importantly, this real-world evidence also fuels innovation by informing new algorithms, refined thresholds, and expanded clinical contexts of use, creating a durable engine designed to promote product differentiation and long-term growth. And lastly, As the use of our products matures and new insights are generated around the impact they may have on guiding interventions in clinical practice, we are launching interventional trials in heart and kidney designed to demonstrate how molecular insights actively can inform treatment decisions and improve patient management. Trials like HARBOR and MERIT are designed to show that our testing is not just informative but actionable within clinical workflows. We believe this level of evidence strengthens differentiation, supports guideline inclusion and reimbursement, and creates a foundation for new contexts of use. Together, these interventional efforts have the potential to help establish as the standard of care and support durable, scalable growth across our platform. And now, I'd like to hand it off to Nathan, to cover our Q4 and 2025 financial highlights and our 2026 guidance. Nathan?