Everyone, thanks for joining us at the Raymond James Institutional Investor Conference. I'm Andrew Cooper. I cover diagnostics and life science tools here for Raymond James. Happy to have some members of the CareDx team here joining us today. For those who don't know, CareDx has a track record in leading the way in transplant rejection diagnostics, has built up a lot more to wrap around that I think we're going to touch on today as well. Happy to have Chief Operating Officer as well as Chief Financial Officer recently, Keith Kennedy here, as well as Chief Commercial Officer Jessica Meng. Without further ado, I'll kick it to Keith for a bit of a presentation, and then we'll have a little bit of a fireside chat part way through. Keith.
Thank you, Andrew, for inviting us to the conference. Last night, as I was preparing, I went back and looked at RJF's stock, and I realized I could have bought and held your stock in the early 2000s and had a 15 times return. The fact that you've grown to $2 trillion in assets was unthinkable back then.
You can give me the credit for that if you want.
I will. I will. I see some familiar faces in the room, so welcome. For those of you online, this webcast and our investor presentation is available on our website, caredx.com, under Events and Presentations. Today's presentation includes forward-looking statements under the Securities Act, the Securities and Exchange Act, and the Private Securities Litigation Reform Act. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our most recent Form 10-K for a discussion of these risks and other important factors. Please refer to the appendix of this presentation and our Q4 earnings materials available on our website for a reconciliation of non-GAAP financial measures. Our long-term vision is that every patient receives the transplant they need to live longer, fuller lives. As a result, we are on a mission to create life-changing solutions that enable transplant patients to thrive.
There are approximately 100,000 patients on the transplant waiting list, and it is estimated that a new patient is added to the transplant waiting list every 8 minutes - 10 minutes. Patients do not self-enroll, but instead there is a comprehensive evaluation and approval process to list a patient, and that is conducted by a certified transplant center. In solid organ transplant, a patient must have end-stage organ failure or irreversible disease requiring a transplant, and they are generally put on immunosuppression medicine to manage the body's natural response to the graft. For this, we follow and test patients regularly, often monthly or quarterly, for early signs of rejection, such as acute cellular rejection or antibody-mediated rejection when intervention is most likely to reverse acute episodes of rejection, preserve the graft function, and reduce the risk of chronic rejection.
As Andrew mentioned, I am Keith Kennedy, the Chief Operating Officer and recently appointed CFO of CareDx. I'm here with Jessica Meng, our Chief Commercial Officer. After this presentation, I understand there is a breakout session, we look forward to meeting those of you that attend. CareDx was founded in the Bay Area in 1998 and went public under the ticker CDNA in 2024. 2014, excuse me. We have over 750 employees with deep domain experience in transplantation, including 100 scientists and researchers, 200 commercial team members, and over 80 software engineers, which are building the assays, bioinformatics pipeline and clinical evidence, AI and software required to serve our expanding customer and patient population.
Robert Woodward, our Chief Scientific Officer, has been with the company for over 20 years, and he and Marica Grskovic, our Chief Strategy Officer, were instrumental in launching our AlloSure products. Dr. Jeffrey Teuteberg, our Chief Medical Officer, is a nationally recognized leader in heart failure and transplant medicine, with an outstanding record of clinical innovation, research, and patient advocacy. He joined us last year from Stanford University, where he served as the Chief of Heart Failure and Cardiac Transplant. He brings extensive experience in clinical operations, research, and medical education. Dr. Jing Huang is our Chief Data and AI Officer and is responsible for leading our clinical intelligence strategy, bioinformatics, and data engineering teams, which I expect you'll hear more about in the future. CareDx is the market leader in solid organ transplantation.
We have performed over 1 million tests for transplant patients and approximately 200,000 tests in 2025 alone. We provide testing services, software, and patient solutions and distributed test kits across a full continuum of solid organ transplantation, spanning kidney, liver, heart, lung, and multi-organ transplants. Today, we support more than 200 transplant centers across the United States, or approximately 80% of all transplant centers, giving us unmatched reach and long-standing clinical relationships in our industry. Solid organ transplantation continues to be a growth market driven by annual transplant volume, monitoring patient and organ health post-transplant, advances in technology such as machine perfusion and government incentives for transplant centers to increase kidney organ transplant access for end-stage renal disease patients, where the long-term savings is up to 50% for transplant versus dialysis.
In October of 2024 at our Investor Day, we introduced our development roadmap we call Transplant Plus, which is our path to extending beyond solid organ transplant. I will touch later on this in the presentation. For over 25 years CareDx has invested in technology to transform the care of transplant patients globally, and we estimate that the total addressable market for our products and services is approximately $8 billion. We have made strategic investments in transplant software, specifically medication adherence management, quality reporting and other software products. In 2016, we launched our rapid HLA Typing Kit designed for deceased donor and time-critical matching. In 2018 and 2019, we expanded from PCR-based kits into next-generation sequencing-based HLA test kits that we now offer in over 100 countries.
In 2021 and early 2022, we acquired a pharmacy dedicated to transplant patients, which we call the CareDx Pharmacy today, which serves transplant patients in all 50 states. Medication adherence is critically important to organ and patient health. Over 25 years of transplant technology innovation, we built solutions that are now embedded across multiple parts of the transplant ecosystem. On the lab product side, we support transplant programs with 200,000 plus next-generation sequencing-based HLA Typing Kits sold annually. On the testing side, our platform has enabled more than 1 million molecular tests performed to monitor for organ rejection, reflecting the longitudinal nature of transplant care. The CareDx Pharmacy files over 150,000 transplant prescriptions annually, which underscores our presence beyond diagnostics alone.
Importantly, our software solutions are broadly adopted across U.S. transplant centers, the key point being that we are integrated into the provider community clinical workflows. AlloSure is a non-invasive blood test used after an organ transplant to detect injury to the transplanted organ and assess the risk of rejection. It does this by measuring donor-derived cell-free DNA circulating in the patient's bloodstream. This page and the graphics use AlloSure Kidney to illustrate how AlloSure works. The idea and the biology is simple. When the transplanted organ is injured or undergoing rejection, more donor DNA is released into the blood. Elevated levels of donor-derived cell-free DNA may indicate potential allograft injury or rejection. AlloSure was the first clinically validated, commercially scaled donor-derived cell-free DNA test used routinely to detect active graft injury and rejection across solid organ transplants.
We launched AlloSure Kidney, our second successful commercial launch in 2017, followed closely by HeartCare in 2018, AlloSure Heart in 2020, and AlloSure Lung in 2021. AlloSure suite of products were designed to be simple, non-invasive blood tests that detect rejection earlier than clinical signs and symptoms or standard clinical tools. Many centers have adopted AlloSure as part of the regular surveillance protocol, and we're also seeing the expanded use of AlloSure Kidney in the for-cause setting, like using the test to monitor patients during changes to immunosuppression treatment. The test also provides quantitative signal that clinicians can monitor over time. It fits naturally into the post-transplant phase of the patient journey and is one of the core testing services that anchors our longitudinal protocol-driven engagement with transplant centers.
Our solution selling model, which Jessica will talk about, translates into both revenue growth and operating efficiency. Our analysis shows that centers that use three or more of our solutions on average generate two times the testing service volume and revenue compared to other customers, and we have over 50% higher patient acquisition in those accounts. Importantly, this growth does not require a proportional increase in sales and marketing resources. We are selling additional solutions and more testing into the same accounts using the same commercial coverage. Turning to the Q4 2025 financial highlights that we covered last week on our earnings call. Revenue of $108 million increased 25% year-over-year. Testing volume of 53,000 tests increased 17%. non-GAAP gross margin of 69% is in line with the prior year.
Adjusted EBITDA of six and a half million included $7 million in one-time cash bonus in lieu of stock. We ended the year with $201 million in cash and cash equivalents. Our key growth drivers for 2026 reflect our efforts to extend our leadership position in precision diagnostics. In 2026, we are focused on pipeline advancement, our go-to-market execution, and evidence generation. As part of our Transplant+ strategy, we are advancing our pipeline in hematologic cancers with the submission of our ACROBAT publication and AlloHeme CLIA readiness. John held an investor call in February with our Chief Medical Officer and the principal investigator on our pivotal ACROBAT clinical trial that went into important details behind the clinical validation of this test, which is available on our website. Pipeline progress is marked by clear milestones tied to readiness, evidence, and execution.
On the go-to-market side, we're focused on making it easier to access and order our test. That includes Epic Aura integrations, Epic Enterprise, and our LIMS consolidation project. We estimate that 80%-85% of transplant centers use Epic as their core EMR. We are currently integrated bilaterally with approximately 40% of those centers. These initiatives are designed to reduce friction for customers and support broader adoption within existing accounts. The growing body of evidence for our tests drive clinical belief in our products, adoption, and utilization over time, leading to our products becoming the standard of care in transplant. Examples include registry publications such as KOAR, SHORE, and ALAMO, scientific abstracts such as ImmuneScape, and interventional trials including MERIT and HARBOR. AlloHeme is our first Transplant+ solution and entry into the cell therapy market. It's a natural extension of our expertise in longitudinal transplant monitoring.
Among relapse patients with AlloHeme-positive results, the test identified relapse a median of 41 days before clinical detection. AlloHeme is an example of how we're applying our diagnostic capabilities in transplant to adjacent high-acuity markets. This is part of what we refer to as Transplant+, which we size as a $1 billion market opportunity for repeat testing. We estimate that patients receiving a hematopoietic stem cell transplant may be followed and tested up to 14 times over 24 months post-transplant. The slide also outlines our targeted commercial timeline. In 2026, CLIA readiness and publication activities. In 2027, the commercial launch and coverage submission. In 2028, estimated Medicare coverage and revenue contribution. This is a disciplined path where we are pairing innovation with clinical validation, readiness milestones, and a commercial go-to-market approach that extends our platform into new markets.
On the go-to-market side, 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 support further volume growth. Seven transplant centers are live on Epic Aura today, making us one of the fastest implementers according to Epic's team. An additional 14 centers are in active implementation, with more, including large multi-center systems, expected to begin shortly. We're seeing early operational and commercial benefits, including improved electronic ordering, data quality, and a 40% reduction in login-related issues. Early live sites are showing increased activity post go live, reinforcing confidence in approved adoption and efficiency as scale increases.
In parallel, we are migrating our LIMS to Epic Enterprise, enabling faster product launches and more seamless EMR data exchanges to reduce workflow interruptions and to protect results and billing timelines. We believe clinical evidence is the foundation for building clinical belief in our testing solutions and supporting their adoption as the standard of care in solid organ transplantation. As part of our 2026 evidence strategy, we are advancing translational research under our ImmuneScape program, including our strategic collaboration with 10x Genomics announced in January, which we believe represents a significant advancement in our precision transplant medicine pipeline. By leveraging multiomics, single-cell, and spatial biology technologies and building on platforms such as HistoMap Kidney, ImmuneScape is designed to generate high-resolution insights that may inform future clinical diagnostic development, including improved prediction of therapeutic response and treatment selection.
Observational studies remain a core pillar of our 2026 strategy. With large prospective registries such as KOAR, SHORE, and ALAMO intended to demonstrate real-world utility across organs and populations reinforcing physician adoption, support market access, and inform ongoing innovation. As our products mature, interventional trials such as HARBOR and MERIT in heart and kidney are designed to demonstrate how molecular insights can inform clinical decision-making, support differentiation, guideline inclusions, reimbursement, and the potential establishment of molecular testing as a standard of care. Turning to financial highlights. Starting with the Q4 results, total revenue, as I said before, was $108 million, up 25% year-over-year. Testing services was $78.4 million, a 23% increase with volume of approximately 53,000 tests, up 17% year-over-year.
Average revenue per test was $1,480, which included $5.1 million in cash collected in excess of receivables on historical claims, consistent with our guidance. Patient digital solutions revenue was $16.8 million, up 47%, and lab product revenue was $13.3 million, up 17% year-over-year. Our non-GAAP gross profit for the quarter was $74.3 million, representing a 68.5% gross margin. Non-GAAP operating expenses were $70 million, including a $6.7 million one-time cash bonus in lieu of equity awards for non-executives. Adjusted EBITDA for the quarter was six and a half million, down 34% year-over-year, reflecting approximately $7 million of operating expenses related to that cash compensation in lieu of equity, which we believe aligns with our focus on managing shareholder dilution.
Turning to cash, we collected $115.8 million in Q4, a 37% increase over the prior year. We also repurchased $12 million of common stock, acquiring 773,000 shares at an average price of $15.79 per share. For the full year, revenue was $380 million, up 14% year-over-year. Testing service revenue of $275 million, up 10% with volume of approximately 200,000 tests, a 14% increase. Our patient digital solutions grew 31% to $57 million, and lab products revenue increased 19% to $48 million. Non-GAAP gross profit for the year was $263 million, up 14% with gross margin of 69%, consistent year-over-year. Our non-GAAP operating expenses totaled $240 million or 63% of revenue in line with the prior year.
Adjusted EBITDA was $32 million or a 14% increase and would have been higher absent the one-time $7 million of cash bonus in lieu of stock. Our cash collections totaled $406 million, up 32% year-over-year, driving a $23 million reduction in accounts receivable and a 42% improvement in DSO, which we think are leading in the industry from 71 days to 41 days on a Q4-over-Q4 basis. During the year, we repurchased $88 million of common stock, acquiring 5.8 million shares at an average price of $15.16, and we ended 2025 with $201 million in cash and 50.9 million shares outstanding and no debt.
Turning to our guidance, we expect full year 2026 revenue of $420 million-$444 million, representing approximately 14% year-over-year growth at the midpoint. Our guide assumes testing services revenue of $306 million-$326 million, with testing volume of 220,000-228,000 tests or approximately 12% growth at the midpoint. Our guide assumes a draft LCD is finalized as outlined in the draft form and that is implemented mid-year. We estimate the full year impact of the LCD to be $15 million in revenue flowing down to Adjusted EBITDA. We included $7.5 million or half of the annual impact in our 2026 revenue guidance.
We expect to report $5 million in out-of-period revenue in the first half of 2026 and $3 million in the first quarter and $2 million in the second quarter. Our product at patient and digital solutions revenue range, we expect to range from $114 million-$118 million, and our Adjusted EBITDA for 2026 is expected to range from $30 million-$45 million. On our Q4 2025 call that we had last week during Q&A, I was asked about the guidance, and I gave an illustrative example of the math that gets us to the midpoint of the guide range, which I recommend you read if you're building a model. With that, thank you for having me, and let's go to Q&A.
Great. Appreciate it. We've got a few minutes here for some Q&A. you know, maybe first one, a little bit kind of the higher level kind of philosophy, but, you know, CareDx is really locked in on a pretty concentrated transplant market when we think about kinda where you're focused versus others that can be a little bit broader sometimes. How does that concentration change the underlying economics and the way you think about the business compared to, you know, some of the bigger markets or broader markets that others go after sometimes?
Well, if you go back 10 years when I got into this industry, you know, everybody wanted to have a minimally invasive test, and they wanted to do repeat testing. Now you're starting to see more with the advances in genomics and the data and the science ability to go down to the single cell, for example, is what we're doing with 10x Genomics. You're seeing that we can learn more from the biology of what the markers are on the cell surface that allow us to test and see clinic, you know, sub-clinically before signs and symptoms would show up in the clinical setting. We can see that with non-invasive testing. You're seeing more repeat testing, such as what you're seeing in MRD and in our space.
We're really excited about that, and that's part of the solution selling, which Jessica's talked about. You need a lot of products to follow patients over time and longitudinally. It's more than just offering a test. You have to have a full package solution to, in order to serve them, such as mobile phlebotomy and other testing services. Jessica, you wanna chime in here?
I mean, I think operating a highly concentrated market really allows us to, as Keith said, to sell multiple products of that repeat over time to a very concentrated set of clinicians at a concentrated centers to a relatively small set of patients that need our products throughout their lifetime. I think in terms of economics, it really means that once we create a commercial infrastructure, that infrastructure doesn't have to expand significantly, right? That we can really leverage and a lot of the revenue we generate, that incremental revenue we generate goes to the bottom line.
Maybe I'll tag on to that. With that solution selling approach, I mean, how does that relationship look?
Right
... different with somebody who's adopted the full solution set versus maybe one product? Kind of related to that, what's the piece that the customers are looking at and saying, "Hey, this is the biggest benefit when we do it this way as opposed to more that one-off approach"?
Absolutely. As Keith mentioned, the centers that adopt three or more of our products are seeing twice the volume in terms of testing services. What that means is our team is able to really engage with all of the key stakeholders throughout that transplant center, whether it's the administration, the surgical medical directors, the clinicians, of course, the staff. We're able to comprehensively assess their needs, right? Not our needs to sell, but their needs, and then really customize our portfolio solution to their specific need. That means that we're often seen as a strategic partner now. They actually share with us what their needs are and what they want, and that allows us to engage in a much more meaningful conversation.
For example, all of this growing body of evidence, that's coming out, we're able to have in-depth discussion about how that's gonna benefit their patient care, and they're much more willing to adopt that system because everyone wants to grow transplant volume at their centers and improve patient outcomes.
Maybe pivoting that into some of the financials. I mean, how does that change the way you think about the investment needed to continue growing when we think about sales and marketing, and when we think about sort of what the future path looks like from a profitability perspective?
Yeah, we have taken our operating expenses as a percentage of our revenue to the low 70%, to the low 60% in a year and a half I've been there. We continue to believe that as we generate gross profit dollars and scale the business, that 50% of those dollars should drop down to the investors. This year, we're making strategic investments as we're launching AlloHeme and building out the commercial organization, which Jessica's talking about. We expect that to be a modest 63% and that, you know, to continue to decline. For example, we've spent a lot of time investing in our revenue cycle management team, and I rebuilt that team.
It was one of the first things I did when I got to the company, you know, we've seen our price increase. I don't know, we thought it was gonna be 3% a year, and I think we went up over 10% in the first year. If we were able to just over 250,000 tests increase our ASP $300 a test, which, you know, internally we've said that we're trying to get over $2,000 per test, that's $75 million of incremental cash flow that's going to drop down to the investors because there's no incremental spend really associated with that with all the technology we've invested. We're super excited about it.
Maybe touching on that last point, the cash balance here, really pristine balance sheet. What does that do to kind of the way you think about, you know, the path forward in terms of using some of that balance sheet and how you apply it when it comes to, you know, execution, the infrastructure you need, pipeline readiness for things like AlloHeme that you've got on the come?
Our OpEx guide includes all of our investment in 2026. We've already, you know, completed the ACROBAT trial. We'll be reading out evidence as we talk about in our 2026 milestones. We're getting ready for CLIA readiness. I think that's all factored into the 63% OpEx as a percentage of revenue. We're super excited about that.
Perfect. maybe I'll just ask on AlloHeme, as you think about building beyond sort of the sites of care that you maybe have focused on historically, you know, how do you think about building that out and what it looks like to broaden out a little bit?
Sure. For AlloHeme, we recognize that our clinician audience is different, right? We're gonna target hem oncologists. Again, they're at a very concentrated number. I think John mentioned about 200 bone marrow transplant centers. We really continue to, you know, focus on that concentration and leverage. At the same time, we can leverage a lot of our commercial capabilities we've already built, for example, marketing, market access, as well as our AI, right? AlloHeme is actually not only a great next-gen molecular test, it's actually built that's AI-derived. We can really leverage a lot of our existing infrastructure and capabilities, and of course, there's the wraparound service.
As a matter of fact, a number of our software solutions like, MedActionPlan and our O TTR Cellular have already been implemented in those same bone marrow transplant centers. Really it's a nice Transplant Plus.
Perfect. Unfortunately, we are out of time, so we'll head down to the breakout in Amarante I. Thank you so much.
Thank you, Andrew.