CareDx, Inc.

Hello, everyone. Thank you for joining us and welcome to the CareDx Q2 2026 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 one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Nina Deca. CareDx, Head of Investor Relations. Nina, please go ahead.

Thank you, operator. Good afternoon. Thank you for joining us today. Earlier today, CareDx released financial results for the second quarter 2026 ending June 30th, 2026. The results and our earnings presentation are available on the company's website at caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, and Keith Kennedy, Chief Operating Officer and 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 facts 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 undue 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 filing with the Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, July 30, 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 discussion of certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute or in isolation from GAAP measures. Reconciliations of our non-GAAP financial measures to the most directly compatible 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, Nina. Good afternoon, and thank you for joining us today. Two years ago, we set out to transform CareDx into a leading precision medicine diagnostics company. Today, that transformation is largely complete. We deepened our leadership in transplantation. We sharpened the portfolio, exiting non-core businesses to focus on our highest value opportunities. And we extended that same solutions approach into specialty oncology and cell therapy, new markets with the same proven model. The CARDI-X model is built on longitudinal molecular testing that informs clinical decision making, supported by robust clinical evidence, integrated workflows, and patient engagement. It's repeatable and differentiated, and it connects everything we do across transplant, specialty oncology, and cell therapy. Our growth strategy is working. We are pursuing markets where our core competencies give us the right to win, where we can hold a clear number one position and where patients face a high cost and burden of disease warranting repeat molecular testing to inform clinical decision making. In these markets, our solution selling model creates value and stickiness with clinicians and patients. Today in my prepared remarks, I'm going to share an update on progress with our pipeline, the integration of our strategic acquisition of NavDx and our execution on the quarter in solid organ transplantation. Innovation remains central to how we plan to maintain our leadership position, extend our model into new markets, and grow our TAM. We continue to advance ALAHEME, our recurrence monitoring test for patients undergoing cell therapy to treat AML and MDS hematologic malignancies. During the second quarter, investigators from the ACROBAT trial submitted the Allaheim clinical validation manuscript to a peer-reviewed journal. One of the most compelling findings from the ACROBAT study was Allaheim's ability to predict relapse ahead of standard of care. Allaheim predicted relapse a median of 41 days before clinical relapse was diagnosed. This lead time may provide an opportunity for earlier clinical intervention. potentially enabling clinicians to take action before overt relapse occurs. These data support the potential role of Alekheme as a blood-based surveillance tool for risk stratification and earlier detection. Publication of these results is an important milestone in our evidence generation strategy, helping to build clinical confidence in Alekheme and support future adoption. We believe the publication represents a key step toward our reimbursement objectives, including future coverage submissions to both private and Medicare payers. We remain on track to complete CLIA readiness activities before year end, positioning Alaheim for a planned 2027 commercial launch. Alaheim represents the organic expansion of the CareDx model into cell therapy. a market where we believe we have a first mover advantage and are positioned to win by creating meaningful value for patients and providers. Histomap kidney also continues to advance toward launch. Histomap adds a molecular layer to tissue biopsy assessment to complement Allisher kidney blood-based monitoring. Last week, investigators from the University of Wisconsin published new data in the journal Transplantation Evaluating Histomap Kidney in 138 Kidney Transplant Biopsy Specimens, including 42 patients with microvascular inflammation that is donor-specific antibody negative and CD4 negative. DSA negative and CD4 negative MVI was recognized in the 2022 BAMF classification as a distinct rejection phenotype that can appear low risk by conventional biopsy assessment, yet may progress to rejection and graft loss. In the study, histamap kidney distinguished patients with MVI pathology with markedly different outcomes, with more than three times the rate of graft loss at six years in the histamap high-risk group compared with the low-risk group. supporting the potential of histamap kidney to provide clinically meaningful information beyond conventional biopsy assessment. Histamap is an example of how we are establishing clinical differentiation and providing molecular solutions to our customers from non-invasive blood-based monitoring to prognostic tissue analysis of high-risk patients undergoing biopsy. We intend to launch histamap kidney in a clinical study this year and make it available more broadly commercially in 2027. In addition to our pipeline programs, we have significantly expanded our TAM with the recent NavDx acquisition in specialty oncology. NavDx adds a clinically differentiated solid tumor MRD platform to the CareDx portfolio. We are already seeing encouraging momentum as we integrate the business. Since closing the acquisition on July 1st, we've made meaningful progress executing the integration priorities that support the strategic rationale for the transaction. Our focus has been on three areas where we believe CareDx's core competencies can drive growth and create value. First, leveraging our commercial capabilities in evidence generation, building belief in molecular testing as a standard of care, and patient support infrastructure to expand adoption of NavDx. Second, applying our workflow expertise, including epic integration and connectivity capabilities to simplify the customer experience and support incorporation into routine clinical practice. And third, integrating revenue cycle management and reimbursement capabilities to create a scalable operational foundation and support broader market access. Together, these initiatives reflect the core value creation opportunity behind the acquisition, combining NavDx's differentiated technology with CareDx's commercial reach, workflow expertise and operational scale. In July, I had the fortune to attend the 2026 American Head and Neck Society Annual Meeting in Boston. and meet with head and neck surgeons, radiation oncologists and medical oncologists from over 60 institutions across the US. Their conviction for using NavDx in their practice is strong and they were enthusiastic about how our solutions address their key challenges with broader adoption. At the event, over 30 presentations and sessions focused on circulating tumor HPV DNA or other biomarker related topics. New data were presented from a nationwide cohort of approximately 40,000 patients with HPV-driven cancers. The study focused on patients whose NavDx tests became positive during surveillance monitoring, indicating molecular recurrence of disease. The authors evaluated the clinical significance of the NavDx quantitative score, a differentiating feature of the test, in predicting response to treatment, otherwise known as salvage therapy. The data demonstrated that lower NavDx scores at the time of molecular recurrence were associated with higher rates of ctDNA clearance and faster clearance to undetectable levels, supporting the role of NavDx in predicting response to salvage therapy. These findings suggest the test kinetics may provide prognostic information helping clinicians better understand how patients respond to treatment in the recurrent setting. Also at AH&S, we hosted a symposia featuring leading clinicians of the Californian Head and Neck Cancer Consortia who recently published consensus recommendations on the use of circulating tumor HPV DNA in head and neck cancer. The session drew strong engagement from the head and neck oncology community. 33 experts across 15 institutions reached a strong consensus that circulating tumor HPV DNA is a valuable tool for diagnosis and surveillance and that serial testing should be performed throughout the years following definitive treatment. This is an important milestone. When leading clinicians converge on consensus recommendations for how a technology should be used, It signals that molecular testing is becoming an established part of how these patients are managed in clinical practice. Moving on to solid organ transplant, we continue to see molecular testing increasingly integrated in the clinical decision-making across transplant care. As the evidence base grows, clinicians are using molecular insights not only to detect rejection, but also to assess rejection risk evaluate treatment response, and support longitudinal patient management. At the American Transplant Congress, the largest transplant meeting of the year, we continued to build belief in molecular testing as a standard of care by advancing our evidence generation strategy with new data that support both adoption of Alloshore surveillance testing and the expansion of its use into new for-cause contexts of use. At ATC, CARE-Dx data were featured in more than 30 abstracts and nine oral presentations spanning kidney, heart, lung, and multi-organ transplantation, with findings generated from studies conducted across more than 110 transplant centers in the United States. One of the clearest themes at ATC was the continued evolution of Alloshore kidney beyond surveillance, increasingly being evaluated for risk assessment, treatment response, and long-term graph outcomes, not just to identify injury. One of the most notable studies presented at ATC evaluated more than 1,100 kidney transplant recipients from the KOR Registry and examined how AL-Assure trajectories during the first four months of surveillance testing following transplant related to long-term outcomes. The findings were striking. Approximately 35% of patients with persistently elevated Alloshore levels experienced rejection and had a nine-fold higher risk of graft loss compared to patients with consistently low Alloshore levels. Patients whose elevations resolved over time had outcomes similar to those who were never elevated at all. In other words, it's not a single result that matters. but the trajectory over time, which is exactly the insight that longitudinal molecular monitoring with AlloSure is designed to provide. In the four cause setting, we saw AlloSure used as the endpoint to judge whether a therapy is working. In a single center prospective study, patients with persistent chronic antibody mediated rejection were followed with serial AlloSure testing through monthly to Soluzumab infusions. Donor-specific antibodies declined and kidney function stabilized, yet AlloSure did not change over 12 months, and follow-up biopsies confirmed that antibody-mediated rejection was still present. The conventional markers suggested that patients were improving. AlloSure, confirmed by biopsy, showed the injury was ongoing. That raises real questions about how sensitive conventional markers are for monitoring treatment response, and it supports AlloSure as a potential surrogate endpoint in clinical trials of transplant therapies. Taken together, these data speak to our growth model. More patients monitored over time, more clinical context of use where a treating physician needs an objective molecular answer, and a growing role for AlloSure and how new transplant therapies are evaluated. The data presented at ATC reinforced both the strength of our evidence generation engine and the leadership position we have built in transplant diagnostics. Separately, this quarter marked another milestone with the publication of our second CAOR analysis in the esteemed Journal of the American Society of Nephrology. In more than 1,250 kidney transplant recipients across 56 U.S. centers, roughly a third of patients saw their Alloshore levels rise over time, and those elevations mattered. Patients with elevated Alloshore levels faced a nearly four to six times higher risk of losing their transplant. Most of these elevations appeared subclinically before any measurable decline in kidney function. meaning Alishor identified patients at risk well before other measures. And on the other end, patients who stayed consistently low represented a clearly low risk group with low rates of rejection, graft dysfunction, or graft loss. This is what Alishor makes possible, identifying risk earlier and supporting more informed clinical decision making. Together with the ATC data, these Allishore kidney findings continue to differentiate our platform, reinforce our leadership in transplant, and demonstrate why monitoring with Allishore is becoming a routine part of how transplant patients are managed. Another development announced on July 16th was the finalization of the Medicare local coverage determination for solid organ transplant molecular testing. The policy affirms coverage for surveillance testing across kidney, heart, and lung transplant and reinforces the role of AlloSure and Allomap in post-transplant patient management. In addition, what we find encouraging is that the foundational policy extends beyond existing coverage. It establishes a pathway for histomap coverage for molecular assessment in situations where conventional biopsy findings may be indeterminate were discrepant with clinical presentation, which is supported by the histamab data published this quarter. The policy also establishes a framework that can support future innovation in additional organs such as liver transplant. As a reminder, today nearly 500,000 Americans are on kidney dialysis and approximately 100,000 Americans are on a transplant wait list. Improving access to transplantation will require the field to make greater use of available donor organs, manage increasingly high-risk recipients, and ultimately support emerging transplant solutions such as gene-edited organs and xenotransplantation. As transplant medicine evolves, tools that can assess immunological activity, detect injury earlier, and support clinical decision making become increasingly important. We believe the final policy acknowledges that molecular diagnostics are an integral part of transplant management, not only for today's standard of care surveillance with AlloSure and Allomap, but also for the next generation of transplant innovation. With that, I'd like to turn the call over to Keith to review our financial results and outlook for the remainder of the year. Keith?

Thank you, John. I plan to cover our second quarter 2026 financial results and our updated 2026 guidance. Turning to the financial highlights section of our earnings presentation for the second quarter 2026 and our year-over-year results. Total revenue increased 52% to $132 million. Testing services revenue increased 61% to $100 million or $1,720 per test. Testing volume increased 17% to 58,000 tests. Non-GAAP gross margins increased to 74%. Adjusted EBITDA increased $19 million to $25 million or 19% of revenue. We repurchased 570,000 shares for $12.2 million or 21.50 per share. We ended the quarter with 374 million in cash and cash equivalents and no debt. And we closed the sale of the lab products business on June 30th, recognizing a gain on the sale of $113 million, which is included in GAAP operating income but excluded from operating income for non-GAAP reporting. Turning to slide 13 and our Q2 revenue performance, total revenue increased 52% to 132 million. Testing services revenue increased 61% to 100 million, including 15.6 million in out-of-period revenue. Patient and digital solutions revenue increased 50% to 19 million, driven principally by our pharmacy. Lab products revenue increased 8% to 13 million. Turning to the next slide, non-GAAP gross margins increased to 74%. Non-GAAP gross profit of 98 million increased 63%. Non-GAAP operating expenses of $75 million, or 57% of revenue, including approximately $7 million of incremental transaction-related payments and bonus accrual for performance above plan. Adjusted EBITDA increased to $25 million, or 19% of revenue. And our GAAP operating income includes $113 million gain from the sale of our lab products business GAAP net income of $111 million or $2.15 per basic share or $2.07 per diluted share. We are now connected electronically with approximately 90% of our transplant customers by test volume with 50% of test volume from integrated EMRs and 40% through our care portal. We are live today with 17 transplant centers using Epic Aura. and we expect to be live with 30 to 40 centers by the end of the year. Turning to the next slide, cash collections increased 49% to 136 million. We generated cash flow from operations of 31 million this quarter and 94 million over the last four quarters. And we ended the quarter with 374 million in cash and cash equivalents and no debt. Turning to guidance, starting on slide 16, we are raising 2026 revenue guidance to 490 to 500 million, representing a 30% increase year over year at the 495 million midpoint of the range and adjusted EBITDA from 66 to 78 million or 15% of revenue at the $72 million midpoint of the range. Our guidance includes the addition of specialty oncology in the second half of 2026 and testing services. We applied the following assumptions or estimates and modeling our full year guidance consistent with non-GAAP measures. testing volume between 258,000 and 266,000 representing a 31% increase year over year at the 262,000 midpoint of the range. The midpoint of our guidance assumes Q3 testing volume of 72,600 tests with transplant volumes of 58,000 and specialty oncology volume of 14,600. For Q4, the midpoint of our guidance assumes testing volume increase sequentially 5% to 76,300 tests with transplant volumes of 60,000 and specialty oncology volumes of 16,300 tests. and our Q3 and Q4 specialty oncology volumes reflect a 30% increase over the prior year. We removed the 7.5 million LCD impact embedded in our prior guidance. Our non-GAAP gross margin range in the guidance is 71 to 73%. The non-GAAP operating expenses of $293 to $297 million or approximately 60% of revenue and our 2026 depreciation expense of approximately $10 million plus or minus $1 million. Our full year guidance assumes revenue for each service calculated at the midpoint of the range includes testing services revenue of $400 million Inclusive of $24 million in specialty oncology revenue, patient and digital revenue of $72 million, and product revenue of $23 million. Our guidance excludes the cost or expense to complete the sale of our products, business, and the acquisition of Novaris. Turning to slide 17, Our guidance includes $23 million of lab products revenue in the first half of 26 and specialty oncology revenue of $24 million in the second half of 26. As I stated earlier, we completed the divestiture of our lab products business, generating $172 million in consideration and $113 million gain on the sale. The gain is included in GAAP results and excluded from non-GAAP results. Turning to slide 18, this slide illustrates the blended ASP and revenue per test for testing services, including transfer to the oncology. In modeling to the midpoint of our guide range, the chart on the left shows the blended ASP and Revenue Per Test for transplant only and shows that we are on or ahead of plan in transplant. The chart on the right shows the blended ASP and Revenue Per Test for testing services. We expect Revenue Per Test of $1,527 including $1,367 for ASP and $160 for out-of-period revenue. And modeling to the midpoint of our guide, we assume transplant average ASP per test of $1,455 in Q3 and $1,465 in Q4 at the midpoint of our guidance. And specialty oncology average ASP per test of $770 in Q3 and $795 in Q4, also at the midpoint of our guidance, and out of period revenue of $8 million in Q3 and $4 million in Q4. Hopefully this is helpful detail. I'll now turn the call back over to John.

Thank you, Keith. We have transformed CareDx into a differentiated precision molecular diagnostics company with a unique set of core competencies that position us for continued profitable growth. Our performance reflects that our strategy is working and we look forward to building on our momentum as we integrate NavDx and launch into cell therapy. Before closing, I'd like to briefly again welcome the entire NAVDx team to CareDx. The work they do is incredibly meaningful for patients all across the country. I'd now like to ask the operator to open the queue for Q&A. Operator?

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, Please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tycho Peterson with Jefferies. Your line is open. Please go ahead. This is Matt on for Tycho.

Maybe just to start, given the updated CMS policy was finalized a couple weeks ago for Alishor and Alimab, John, we'd love to just get any updated color. I know it's only been a short period of time here, but feedback from the field, either docs or the commercial team, any kind of early trends post the finalization of that update where it's calling out, and then Good to see the removal of the headwind in the back half of the year. I mean, how do we think about this going forward? Could there potentially actually be some tailwinds now that this final is finalized? I think you talked about a pathway for for histamap coverage over time, but would love just kind of your updated thoughts post finalization here. Thanks.

Hey, Matt, thanks so much for joining the call. Yeah, we we believe that the policy, you know, ultimately You know, reflects the reality of the evidence supporting these products and the evidence supporting surveillance testing in kidney. So we were pleased that the agency affirmed coverage for surveillance testing. We don't have any kind of feedback from the field as I've shared before. This is really a payment policy. It's not anything that we talk with clinicians about in the field. other than kind of instructions on how to order and how to submit their requisition forms and we didn't anticipate that it would have an impact on volume. Certainly, you know, the positive outcome here both for the existing products but also for the future, right? As we mature our histoMAP program, we publish additional evidence and prepare for CLIA launch, we'll be in position to submit that dossier for coverage of the product.

All right, great. And appreciate all the color on the moving pieces related to the guide. Maybe just on the specialty oncology piece, I think the back half guide assumes bonds are up kind of 30% year over year. I think at the time of the bill, you said 30, 40% the next few years. So is that just, you know, conservative starting point? I think 1Q was up, you know, low 40s for them. Any color on what volumes did there in and 2Q. And then just on ASPs, I think the back half blended ASPs, 780 for specialty oncology. How do we think about scope to drive that higher here into 27 and maybe just refresh us on some of the levers you have at your disposal to move ASPs up higher into next year as well? Thank you.

Matt, great question. The guide is, as Carolyn likes to tell me, prudent. We do still believe this is a 30-40% growth. We'd like to, obviously, by the end of the year, show that we're doing better than where I am in the guide right here. But we are just taking over the business at this point. And we are intending, in a process right now, to move them to our billing system. And so we are trying to do that in the fourth quarter. And so that is a big undertaking to do that. But we think We have a lot of workflows that we spend a lot of time on that are working very, very well. So we think moving them to our claims processing, they outsource their claims processing. And so they have, you know, people internally, but they mostly rely on an external firm to do that. And I need to get some time, you know, some reps with doing the billing before I, you know, feel confident in moving that number up. So I am trying to be prudent. I do believe that number should move up to a thousand to eleven hundred dollars to get eighteen hundred dollars from Medicare and I think as we publish more and more evidence and you know we continue to bill and collect under our system I do think that will move up and I'll have more to talk about when we do the Q4 guide as well and in the October call hopefully. Is that helpful?

Your next question comes from the line of Mason Carrico with Stevens, Inc. Your line is open. You may now go ahead.

Hey, guys. Thank you for taking the questions. First, looks like another solid quarter for the transplant business. Could you just talk about Some of the factors that have driven and I guess continue to drive the acceleration and volume growth there. House surveillance testing trending, that forecast volumes continue to ramp. Any additional insight into those drivers would be great.

Thanks so much for joining, Mason. Yes, surveillance testing continues to gain ground, as does forecast. We have done a really nice job helping with improved workflow in the practices, which is growing the average number of surveillance tests per patient in the first year and first three years post-transplantation. So our clinical liaison team, our patient liaison team that are out there supporting The blood draw process and ensuring that the orders are submitted and the results are reviewed and the practices have really done a remarkable job at that. And we're seeing that factor into the growth. And then as I described in the prepared remarks, using the testing in new contexts of use in the for cause setting continues to expand such that we're seeing both for cause and surveillance testing grow year over year and sequentially.

And we remain a little over 50% Mason on poor cause on kidney. Perfect. Okay. Thank you. And then a higher level question. As we kind of think about the new go forward business, the growth outlook there obviously looks positive. and you've raised your adjusted EBITDA margin guidance for the year but I'm just curious how you're thinking about the ability to continue expanding EBITDA margin in 2027 or maybe how you're prioritizing continuing to ramp profitability from you know 2026 levels and balancing that against you know any required investments in the VAERS yeah they're they're currently represent around 10 percent of our revenue and we do

Thank you for having me. You know, we will evaluate it, but we do believe we should be running at 20% EBITDA margins long term. We do believe that. And that is, there isn't a discussion we have in the business where we don't talk about profitability as well as revenue and how to balance that. But could there be a need to put $5 to $10 million into something and that would potentially impact our Hey, guys.

Thank you for providing the color, particularly the bridge with all the moving parts. I just want to see if I have my math right here, and I hope you can follow me. But if I sort of add and subtract all the moving parts, it looks to me like the non-acquisition raise for the second half of the year is about 17 to 18 million. If we take out the LCD Impact. It's maybe about 10 million. If we take out the raise in patient and digital, it looks like you're keeping the guidance for transplant testing roughly flat in the back half of the year. Do I have my math about right there?

I don't think so. Let me... Walked through some numbers and see if you have those right. We had 23 million in product and we have 24 million in specialty oncology. So that should have been right in line with where we talked on the last quarter. We said 45 to 50 million. So that should add up to 47 million, right? And then the out of period number is all on our testing services. so we had seven and a half our guide last quarter on out of period in Q2 was seven and a half million and we had 15 and a half million so we had an eight million dollar beat in this quarter and then I increased I think the I think our cash collections versus our AR I think we're going to have eight million in Q3 and four million in Q4 and then our testing number for our transplant business at the midpoint of the guide is 376 million so the 376 plus the 24 in specialty oncology is what gets you to 400 on testing services and then we'll have 72 million on patient digital and 23 million on products and that gets you to 495. yep

Okay, that's helpful. I think the difference might be I was backing out the beat from this quarter. But anyway, we can follow up. I guess more importantly, can you give us any color on, you know, similar color as you did on sort of the moving parts that impacted your adjusted EBITDA guide and maybe how we should be thinking about gross margin?

So our gross margin without out-of-period is around 70, 71%. And so the difference between that and 74% of what we reported is due to the out-of-period. We continue to do very well on the margin. So I think we're pretty comfortable in that, I would say, 69% to 71% range excluding out-of-period. but our margins on our testing business alone is in the high almost 80%. So we're at 79% margins and that's what I have in the guide. The margins on specialty oncology, I'm guiding at 63%. We're in the middle of putting them on our system and so they generally can get the 65% margin right now. So I have a little bit of prudency as though the key word is on the margins there. Is that helpful? And then the margins on patient visual, I have a 26% at the midpoint.

Yep. And it seems like from an EBITDA standpoint, based on the guide, you probably have been effectively able to get rid of a, you know, you're not, you're not, Stuff with a bunch of overhead that was being covered by the products business.

Yeah, the, you know, the sale of the products business, if you can, you know, we have someone on our board who loves this stuff, but, you know, we talked about the cash cycle. We had like a 70-day improvement in our cash cycle moving, you know, to just CALEA only because that business had high inventory and Things like that that you would have in a kit business. And so there's just a lot of overhead. Like my regulatory team took 3x the number of people to do the same amount of work on the kit business that we do on the CLIA business, do the high regulatory burden on an IVD kit business. So almost no matter what you do, you need 15 to 20 people in a kit business just on the regulatory and quality side.

Perfect. All right. Thank you. That was really helpful.

Thank you, Bill. Just a reminder, if you would like to ask a question, please press star 1 to raise your hand. Your next question comes from the line of Yi Chen with HC Wainwright & Co. Your line is open. Please go ahead.

Thank you for taking my questions. So for the second quarter, you reported $16 million in prior period revenue. So can you talk about what are your expectations regarding prior period recognized revenue in the second half, particularly considering the final LCD will be effective on August the 30th? And also, The 58,000 volume of tests in the second quarter, are they generally all covered under the new final LCD? Thank you.

Yeah, so I don't, the LCD goes into effect at the end of August. And so I'm not, you know, and I think our tests are covered, you know, for five years and any impact the LCD, we feel, you know, we have covered in our guide. So I'm not worried there. On the out-of-period, the Q3 and Q4, which I stated in my prepared remarks, I have out-of-period revenue in Q3 guiding to $8 million, and in Q4, $4 million. Does that answer your question, Yee?

Yes, thank you.

Okay. We did in terms of the $58,000. I think the more important question there is when we raised the $58,000, the guide does have $58,000 in Q3. So we lifted the guide from the prior quarter of $56,600 in Q3. We lifted that from $56,600 to $58,000 on the testing side on transplant.

Got it. Just a follow-up on Naveris. Once you've fully incorporated the operations and the virus, would you have a dedicated sales team just focused on NavDx products?

Yeah, thanks, Yuchen. There is a dedicated sales team focused just on the NavDx products today. And we talked about, you know, as a part of the acquisition announcement that we would be expanding that team to really ensure that we were reaching all of the providers that could potentially order the test and driving up the utilization of the product on a per patient basis.

Okay, thank you.

Great, thank you.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.