Denison Mines announces $250 million convertible notes offering
Introduction & Market Context
CareDx, Inc. (NASDAQ:CDNA) presented its second quarter 2025 financial results on August 6, highlighting solid adjusted growth across all business segments despite missing analyst revenue expectations. The transplant diagnostics leader reported adjusted revenue of $90.5 million, representing 14% year-over-year growth, while actual revenue came in at $86.7 million, falling short of the $90.62 million forecast.
Despite the revenue miss, CareDx’s stock price increased by 1.95% in aftermarket trading, reaching $13.35, suggesting investors were encouraged by other aspects of the company’s performance, particularly its significant EBITDA improvement and operational efficiency gains.
Quarterly Performance Highlights
CareDx delivered strong adjusted financial results across key metrics in Q2 2025, with notable improvements in profitability and operational efficiency. The company reported adjusted EBITDA of $9.1 million, a substantial increase from the negative $0.3 million reported in the same period last year.
As shown in the following comprehensive financial summary, CareDx maintained a solid cash position while delivering growth across multiple metrics:
Testing services remained the company’s core growth driver, with adjusted testing services revenue increasing 14% year-over-year to $65.9 million. The company performed approximately 49,500 tests during the quarter, representing a 13% increase compared to Q2 2024. This marks the eighth consecutive quarter of sequential testing volume growth, demonstrating consistent demand for CareDx’s diagnostic solutions.
The following chart illustrates the steady upward trajectory in testing services volume over recent quarters:
Beyond testing services, CareDx reported strong performance in its other business segments. Patient & Digital revenue grew 19% year-over-year to $12.8 million, while Lab Products revenue increased 12% to $11.8 million. These results reflect the company’s successful diversification strategy and expanding product portfolio.
Operational Improvements
A key highlight of CareDx’s Q2 2025 results was the significant improvement in gross margin and operational efficiency. The company reported a non-GAAP gross margin of 70.4%, representing a 340 basis point increase compared to the same period last year.
As illustrated in the following chart, this margin expansion was driven by strong revenue growth, improved pricing, and continued expense discipline:
The company’s restructured Revenue Cycle Management (RCM) team has delivered impressive results, contributing to improved cash collection and higher payment per test. Specific achievements include a 160% increase in total appeals volume since December 2024, a 60% reduction in claim submission time, a 45% improvement in authorization success rate, and an 800 basis point reduction in claim rejection rate compared to Q1 2024.
These operational improvements have translated into significant EBITDA growth, as shown in the following chart:
Strategic Initiatives
CareDx outlined several strategic initiatives aimed at driving future growth, organized into three key areas: Go to Market Strategy, Evidence Generation, and Operational Excellence. The company has already launched AlloSure Heart Peds and AlloSure SPK in the first half of 2025, with plans to launch Score 7.0, HistoMap Kidney, and AlloSure Plus enhancements in the second half of the year.
The following slide details the company’s key growth drivers for 2025:
A particularly notable strategic development is the integration of CareDx’s AlloSure Plus with EPIC Aura, which aims to improve workflow automation and clinical decision-making. According to the company, AlloSure Plus provides a 16% relative improvement in accuracy compared to traditional diagnostic tools, validated through studies involving over 2,000 patients across 20 transplant centers.
CareDx also highlighted the progress of its evidence generation strategy, with multiple publications and manuscripts demonstrating the clinical value of its diagnostic solutions. The company’s KOAR (Kidney Outcomes with AlloSure Registry) study showed that patients with elevated AlloSure 15-60 days post-transplant had a 5.7-fold increased risk of graft loss at 3 years, underscoring the predictive value of CareDx’s testing.
Forward-Looking Statements
Looking ahead, CareDx provided updated guidance for fiscal year 2025, with revenue expected to range from $367 million to $373 million, a slight narrowing from the previous range of $365 million to $375 million. The company maintained its adjusted EBITDA guidance of $29 million to $33 million and its non-GAAP gross margin target of approximately 70%.
As shown in the following guidance summary, CareDx expects continued strong performance across all business segments:
The company identified several key drivers for its 2025 revenue guidance, including mid-teens percentage growth in testing services volume, testing services ASP of approximately $1,360, low-twenties percentage growth in Patient & Digital solutions, and mid-teens percentage growth in Lab Products.
CareDx is also monitoring the potential impact of the LCD (Local Coverage Determination) Draft Policy published on July 19, 2025, which would cover surveillance testing without requiring protocol biopsy. The comment period for this policy closes on August 31, 2025, with finalization expected by mid-2026.
CEO John Hanna emphasized the company’s strong scientific data as a leading indicator of future clinical adoption, stating, "We continue to drive protocol adoption and adherence, which has been demonstrated to improve patient outcomes." This focus on clinical evidence and protocol implementation, with 60 centers now having kidney protocols in place, positions CareDx for continued growth in the transplant diagnostics market despite near-term revenue challenges.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.