CareDx Announces Fourth Quarter and Full Year 2023 Financial Results
CareDx, Inc. (CDNA) reported total revenue of $280.3 million for 2023, surpassing updated guidance. The company achieved growth in Testing Services for the second consecutive quarter, with $209.7 million in revenue. Despite challenges, they ended the year with $235.4 million in cash and securities, repurchased shares, and received Medicare coverage for key products.
Positive
CareDx exceeded 2023 revenue guidance with $280.3 million, showcasing growth.
Testing Services revenue reached $209.7 million, with consistent patient result growth.
Cash and securities stood at $235.4 million, with no debt, highlighting financial stability.
Collections exceeded 100% of Testing Services revenue for the fifth consecutive quarter.
Received Medicare coverage for HeartCare and AlloSure Lung, enhancing market reach.
Negative
Fourth quarter 2023 revenue decreased by 20% due to Medicare Billing Article changes.
Net loss for the full year 2023 was $190.3 million, including a significant accrual related to patent infringement.
Adjusted EBITDA for the full year of 2023 was a loss of $38.0 million, indicating financial challenges.
From a financial standpoint, CareDx's reported revenue of $280.3 million for the full year 2023, which surpassed their own updated guidance, is a positive signal to investors regarding the company's ability to forecast and manage expectations. However, the overall decrease in revenue by 13% compared to the previous year, alongside a 20% decrease in Testing Services revenue , indicates a challenging market environment, potentially influenced by external factors such as Medicare coverage changes. The increase in Patient and Digital Solutions and Product revenues (29% and 15%, respectively) suggests a diversifying revenue stream, which could be a strategic hedge against volatility in their core Testing Services segment.
The significant net loss of $190.3 million , including a substantial accrual for patent infringement damages, is a major concern. Such a loss can impact investor sentiment and the company's financial flexibility. The share buyback program executed in 2023, while typically a sign of confidence in the company's valuation, must be weighed against the potential need for capital to cover operational costs and legal expenses. The positive collections rate over 100% of Testing Services revenue is noteworthy, as it suggests effectiveness in revenue cycle management, but whether this can be sustained in the face of declining Testing Services revenue is uncertain.
Legally, the ongoing judicial review of the January 2024 jury decision concerning patent infringement is a critical issue. The $96.3 million accrual for related damages has materially affected the company's financials, contributing to the net loss. The outcome of this legal process could have significant ramifications for CareDx's future financial health and operational strategies. It is important for investors to monitor this situation closely, as a resolution in favor of CareDx could result in a reversal of some of the accrued expenses, whereas an unfavorable outcome could lead to additional costs or necessitate changes in their product or service offerings.
From a market perspective, the 4% quarter-over-quarter growth in Testing Services patient results indicates a potential rebound or stabilization in this segment, which could be a positive indication of demand for CareDx's testing services. Nevertheless, the 16% year-over-year decrease underscores the challenges faced in the broader competitive landscape or shifts in healthcare reimbursement policies. The 2024 revenue guidance range of $260 million to $274 million suggests a conservative outlook, likely factoring in the current headwinds and uncertainties. Investors should consider the company's strategic initiatives for growth, such as the emphasis on high-value clinical and digital solutions, to assess the potential for CareDx to recover and return to profitability.
02/28/2024 - 04:05 PM
Delivered Total Revenue of $280.3 Million
Grew Testing Services Results for the Second Quarter in a Row
BRISBANE, Calif. --(BUSINESS WIRE)--
CareDx, Inc. (Nasdaq: CDNA) today reported financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter and Full Year 2023 Highlights
Reported full year revenue of $280.3 million
Reported full year Testing Services revenue of $209.7 million
Grew Testing Services patient results for the second quarter in a row to approximately 39,900, an increase of 4% as compared to the third quarter of 2023.
Reported full year revenue of $37.1 million $33.5 million 29% and 15% , respectively.
Ended 2023 with cash and cash equivalents, and marketable securities of approximately $235.4 million
Achieved the fifth consecutive quarter of collections at over 100% of Testing Services revenue driven by revenue cycle management initiatives. Collected $17 million
Repurchased 2.9 million shares of common stock for $27.5 million
Received Medicare coverage for HeartCare and AlloSure Lung.
CareDx is in the process of seeking judicial review of January 2024 jury decision and monetary damages related to alleged infringement of patent ‘544.
“In 2023, we met our challenges head-on as we navigated the impact of Medicare coverage changes. We reset our operations, strategically reduced our cost structure, and created a growth pathway for the company in the second half of the year, as we continued to focus on care for transplant patients,” said Alex Johnson, President of Patient and Testing Services, and a member of the Office of the CEO at CareDx. “Looking forward to 2024, we are focused on delivering high-value clinical and digital solutions to improve allograft survival, while generating evidence for expanding payer coverage and accelerating our path back to profitability.”
Q4 2023 Financial Results
Revenue for the three months ended December 31, 2023, was $65.6 million 20% compared with $82.4 million $46.7 million 29% compared with $65.4 million
Total AlloSure and AlloMap patient results provided in the fourth quarter 2023 were approximately 39,900, a decrease of 16% as compared to the same quarter a year ago, and an increase of 4% compared to the third quarter of 2023. Patient and Digital Solutions revenue for the fourth quarter 2023 was $9.6 million $8.4 million 14% . Product revenue for the fourth quarter 2023 was $9.2 million $8.6 million 8% .
For the fourth quarter of 2023, net loss was $118.1 million $96.3 million $18.3 million $2.21 $0.34
Non-GAAP net loss was $9.3 million $3.7 million $0.17 $0.07
Adjusted EBITDA for the fourth quarter of 2023 was a loss of $10.3 million $3.7 million
Full Year 2023 Financial Results
Total revenue for the full year ended December 31, 2023, was $280.3 million 13% compared with $321.8 million $209.7 million $263.7 million 20% . Patient and Digital Solutions revenue for the full year 2023 was $37.1 million $28.8 million 29% . Product revenue for the full year 2023 was $33.5 million $29.3 million 15% .
Net loss for the full year 2023 was $190.3 million $96.3 million $76.6 million $3.54 $1.44
Non-GAAP net loss was $34.5 million $20.9 million $0.64 $0.39
Adjusted EBITDA for the full year of 2023 was a loss of $38.0 million $17.5 million
Cash and cash equivalents and marketable securities were $235.4 million $25.2 million $18.4 million
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,” “Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin,” and “Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures” below.
2024 Guidance
For the full year 2024, CareDx expects revenue to be in the range of $260 million $274 million
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, and digital healthcare 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 2024 revenue, CareDx’s plans to seek judicial review of jury decision and historical monetary damages on patent ‘544, CareDx’s focus in 2024 and CareDx’s proposed path to profitability. 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, all of which are difficult to predict and many of which are beyond our control, including 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 Securities and Exchange Commission (the “SEC”), including, but not limited to, the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed by CareDx with the SEC on February 28, 2024, and other reports that CareDx has 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. You are cautioned not to place undue reliance on these forward-looking statements. CareDx expressly disclaims any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
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 cost of testing services, non-GAAP cost of product, non-GAAP cost of patient and digital solutions, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP other income, net, non-GAAP income tax expense, non-GAAP gross profit, non-GAAP gross margin (%), non-GAAP net loss, non-GAAP basic and diluted net loss per share, adjusted EBITDA, and non-GAAP operating expenses.
We define non-GAAP net loss and per share results as the GAAP net loss and per share results excluding the impacts of stock-based compensation; changes in estimated fair value of contingent consideration; acquisition-related impairment charges and amortization of purchased intangible assets and related tax effects; costs involved with completing an acquisition; unrealized loss on investments; realized gain on investments; restructuring charges and certain other charges. We define adjusted EBITDA as non-GAAP net loss before net interest income, income tax expense, depreciation and other (income) expense, net.
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.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
Revenue:
Testing services revenue
$
46,703
$
65,418
$
209,685
$
263,748
Product revenue
9,244
8,555
33,517
29,251
Patient and digital solutions
9,622
8,411
37,122
28,794
Total revenue
65,569
82,384
280,324
321,793
Operating expenses:
Cost of testing services
13,805
18,657
57,642
72,286
Cost of product
5,637
4,617
18,379
17,639
Cost of patient and digital solutions
6,171
6,216
25,978
22,287
Research and development
18,276
23,570
81,866
90,388
Sales and marketing
19,999
23,668
83,334
96,027
General and administrative
26,541
24,776
117,868
100,397
Restructuring costs
1,472
—
2,320
—
Litigation expense
96,300
—
96,300
—
Total operating expenses
188,201
101,504
483,687
399,024
Loss from operations
(122,632
)
(19,120
)
(203,363
)
(77,231
)
Other income (expense):
Interest income, net
3,159
1,870
11,867
3,762
Change in estimated fair value of common stock warrant liability
—
18
10
107
Other income (expense), net
1,541
(924
)
1,343
(2,872
)
Total other income
4,700
964
13,220
997
Loss before income taxes
(117,932
)
(18,156
)
(190,143
)
(76,234
)
Income tax expense
(165
)
(173
)
(141
)
(379
)
Net loss
$
(118,097
)
$
(18,329
)
$
(190,284
)
$
(76,613
)
Net loss per share:
Basic
$
(2.21
)
$
(0.34
)
$
(3.54
)
$
(1.44
)
Diluted
$
(2.21
)
$
(0.34
)
$
(3.54
)
$
(1.44
)
Weighted-average shares used to compute net loss per share:
Basic
53,388,830
53,524,637
53,764,705
53,321,625
Diluted
53,388,830
53,524,637
53,764,705
53,321,625
CareDx, Inc.
Consolidated Balance Sheets
(In thousands)
As of December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
82,197
$
89,921
Marketable securities
153,221
203,168
Accounts receivable
51,061
66,312
Inventory
19,471
19,232
Prepaid and other current assets
7,763
9,216
Total current assets
313,713
387,849
Property and equipment, net
35,246
35,529
Operating leases right-of-use assets
29,891
34,689
Intangible assets, net
45,701
43,051
Goodwill
40,336
37,523
Restricted cash
586
522
Other assets
1,353
3,828
Total assets
$
466,826
$
542,991
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
12,872
$
9,942
Accrued compensation
19,703
16,902
Accrued and other liabilities
45,497
49,131
Total current liabilities
78,072
75,975
Deferred tax liability
136
—
Common stock warrant liability
—
32
Deferred payments for intangible assets
2,461
2,418
Operating lease liability, less current portion
28,278
33,406
Other liabilities
96,551
249
Total liabilities
205,498
112,080
Commitments and contingencies
Stockholders’ equity:
Common stock
49
52
Additional paid-in capital
946,511
898,806
Accumulated other comprehensive loss
(6,963
)
(7,503
)
Accumulated deficit
(678,269
)
(460,444
)
Total stockholders’ equity
261,328
430,911
Total liabilities and stockholders’ equity
$
466,826
$
542,991
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
Cost of testing services reconciliation:
GAAP cost of testing services
$
13,805
$
18,657
$
57,642
$
72,286
Stock-based compensation expense
(387
)
(474
)
(1,854
)
(1,529
)
Acquisition related-amortization of purchased intangibles
(329
)
(329
)
(1,316
)
(1,316
)
Non-GAAP cost of testing services
$
13,089
$
17,854
$
54,472
$
69,441
Cost of product reconciliation:
GAAP cost of product
$
5,750
$
4,617
$
18,492
$
17,639
Stock-based compensation expense
(230
)
(269
)
(1,165
)
(1,120
)
Acquisition related-amortization of purchased intangibles
(413
)
(411
)
(1,655
)
(1,716
)
Restructuring costs
(113
)
—
(113
)
—
Non-GAAP cost of product
$
4,994
$
3,937
$
15,559
$
14,803
Cost of patient and digital solutions reconciliation:
GAAP cost of patient and digital solutions
$
6,226
$
6,216
$
26,047
$
22,287
Stock-based compensation expense
(311
)
(449
)
(1,377
)
(1,331
)
Acquisition related-amortization of purchased intangibles
(271
)
(236
)
(1,039
)
(945
)
Restructuring costs
(55
)
—
(69
)
—
Non-GAAP cost of patient and digital solutions
$
5,589
$
5,531
$
23,562
$
20,011
Research and development expenses reconciliation:
GAAP research and development expenses
$
18,617
$
23,570
$
82,452
$
90,388
Stock-based compensation expense
(1,399
)
(820
)
(6,556
)
(7,391
)
Asset impairments and write-downs
—
—
—
(340
)
Restructuring costs
(341
)
—
(586
)
—
Non-GAAP research and development expenses
$
16,877
$
22,750
$
75,310
$
82,657
Sales and marketing expenses reconciliation:
GAAP sales and marketing expenses
$
20,254
$
23,668
$
84,137
$
96,027
Stock-based compensation expense
(2,913
)
(4,701
)
(12,470
)
(14,403
)
Acquisition related-amortization of purchased intangibles
(641
)
(550
)
(2,457
)
(2,252
)
Restructuring costs
(255
)
—
(803
)
—
Non-GAAP sales and marketing expenses
$
16,445
$
18,417
$
68,407
$
79,372
General and administrative expenses reconciliation:
GAAP general and administrative expenses
$
123,549
$
24,776
$
214,917
$
100,397
Stock-based compensation expense
(4,720
)
(5,413
)
(25,664
)
(20,779
)
Change in estimated fair value of contingent consideration
(946
)
103
(2,677
)
(727
)
Acquisition related fees and expenses
(51
)
(212
)
(589
)
(599
)
Restructuring costs
(708
)
—
(749
)
—
Litigation expense
(96,300
)
—
(96,300
)
—
Other charges
—
—
(64
)
—
Non-GAAP general and administrative expenses
$
20,824
$
19,254
$
88,874
$
78,292
Total other (expense) income reconciliation:
GAAP other expense, net
$
4,700
$
964
$
13,220
$
997
Unrealized loss on investments
—
965
1,190
1,181
Realized gain on investment
(1,468
)
—
(1,468
)
—
Investment impairment
—
—
1,000
500
Other charges (income)
—
11
(2,081
)
43
Non-GAAP other income, net
$
3,232
$
1,940
$
11,861
$
2,721
Income tax expense reconciliation:
GAAP income tax expense
$
(165
)
$
(173
)
$
(141
)
$
(379
)
Tax effect related to amortization of purchased intangibles
(99
)
(98
)
(398
)
(419
)
Non-GAAP income tax expense
$
(264
)
$
(271
)
$
(539
)
$
(798
)
CareDx, Inc.
GAAP and Non-GAAP Operating Expenses
(Unaudited)
(In thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
GAAP operating expenses:
Research and development
$
18,617
$
23,570
$
82,452
$
90,388
Sales and marketing
20,254
23,668
84,137
96,027
General and administrative
123,549
24,776
214,917
100,397
Total GAAP operating expenses
$
162,420
$
72,014
$
381,506
$
286,812
Non-GAAP operating expenses:
Research and development
$
16,877
$
22,750
$
75,310
$
82,657
Sales and marketing
16,445
18,417
68,407
79,372
General and administrative
20,824
19,254
88,874
78,292
Total Non-GAAP operating expenses
$
54,146
$
60,421
$
232,591
$
240,321
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin
(Unaudited)
(In thousands, except percentages)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
Total revenue
$
65,569
$
82,384
$
280,324
$
321,793
GAAP cost of sales
25,781
29,490
102,181
112,212
GAAP gross profit
39,788
52,894
178,143
209,581
Stock-based compensation expense
928
1,192
4,396
3,980
Restructuring costs
168
—
182
—
Acquisition related-amortization of purchased intangibles
1,013
976
4,010
3,977
Non-GAAP gross profit
$
41,897
$
55,062
$
186,731
$
217,538
Non-GAAP gross margin %
64
%
67
%
67
%
68
%
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
GAAP net loss
$
(118,097
)
$
(18,329
)
$
(190,284
)
$
(76,613
)
Stock-based compensation expense
9,960
12,126
49,086
46,553
Unrealized loss on investments
—
965
1,190
1,181
Realized gain on investments
(1,468
)
—
(1,468
)
—
Acquisition related-amortization of purchased intangibles
1,654
1,526
6,467
6,229
Acquisition related fees and expenses
51
212
589
599
Change in estimated fair value of contingent consideration
946
(103
)
2,677
727
Tax effect related to amortization of purchased intangibles
(99
)
(98
)
(398
)
(419
)
Asset impairments and write-downs
—
—
1,000
840
Litigation expense
96,300
—
96,300
—
Restructuring costs
1,472
—
2,320
—
Other charges
—
11
(2,017
)
43
Non-GAAP net loss
$
(9,281
)
$
(3,690
)
$
(34,538
)
$
(20,860
)
GAAP basic and diluted net loss per share
$
(2.21
)
$
(0.34
)
$
(3.54
)
$
(1.44
)
Non-GAAP basic net loss per share
$
(0.17
)
$
(0.07
)
$
(0.64
)
$
(0.39
)
Non-GAAP diluted net loss per share
$
(0.17
)
$
(0.07
)
$
(0.64
)
$
(0.39
)
Shares used in computing non-GAAP basic net loss per share
53,388,830
53,524,637
53,764,705
53,321,625
Shares used in computing non-GAAP diluted net loss per share
53,388,830
53,524,637
53,764,705
53,321,625
CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
Non-GAAP net loss
$
(9,281
)
$
(3,690
)
$
(34,538
)
$
(20,860
)
Interest income
(3,159
)
(1,870
)
(11,867
)
(3,762
)
Income tax expense
264
272
539
798
Depreciation expense
1,978
1,682
7,882
5,248
Other (income) expense, net
(72
)
(70
)
7
1,041
Adjusted EBITDA
$
(10,270
)
$
(3,676
)
$
(37,977
)
$
(17,535
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228248706/en/
CareDx, Inc.
aczene@caredx.com
Investor Relations
investor@CareDx.com
Source: CareDx, Inc.
What was CareDx's total revenue for 2023?
CareDx reported total revenue of $280.3 million for 2023, surpassing updated guidance.
How did Testing Services revenue perform in 2023?
Testing Services revenue reached $209.7 million for 2023, showcasing growth.
What was CareDx's cash and securities balance at the end of 2023?
CareDx ended 2023 with approximately $235.4 million in cash and marketable securities, with no debt.
Did CareDx receive Medicare coverage for any products?
Yes, CareDx received Medicare coverage for HeartCare and AlloSure Lung.
What was the net loss for CareDx in the full year 2023?
The net loss for CareDx in the full year 2023 was $190.3 million, including an accrual related to patent infringement.
What is CareDx's revenue guidance for the full year 2024?
CareDx expects revenue to be in the range of $260 million to $274 million for the full year 2024.
