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Introduction & Market Context
CareDx Inc (NASDAQ:CDNA) delivered a strong financial performance in the third quarter of 2025, with double-digit growth across all business segments. The transplant diagnostics company reported its Q3 results on November 4, 2025, showcasing significant revenue and profitability improvements while raising its full-year guidance.
Despite the positive financial results, CareDx’s stock declined 1.69% in aftermarket trading to $14.77, suggesting investor caution about factors beyond the headline numbers. The stock remains well within its 52-week range of $10.96 to $26.37.
The company has strengthened its leadership team with key additions while advancing its product portfolio and operational efficiency initiatives, positioning itself for continued growth in the transplant diagnostics market.
Quarterly Performance Highlights
CareDx reported impressive financial results for Q3 2025, with total revenue reaching $100.1 million, representing a 21% year-over-year increase. This performance was driven by growth across all business segments and exceeded analyst expectations of $95.32 million.
As shown in the following financial highlights slide, the company achieved significant improvements in key metrics:
Testing services, which forms the core of CareDx’s business, grew 19% year-over-year to $72.2 million, driven by both volume growth and ASP (average selling price) expansion. Testing volume increased 13% to 50.3K tests compared to the same period last year.
The following slide details the performance of the testing services segment:
Beyond testing services, CareDx demonstrated strong growth in its other business segments. Patient & Digital Solutions revenue increased 30% year-over-year to $15.4 million, while Lab Products revenue grew 22% to $12.5 million. This comprehensive performance across all segments highlights the success of the company’s integrated approach to serving transplant patients.
The following slide illustrates the revenue performance across CareDx’s platform:
Strategic Initiatives
CareDx has strengthened its leadership team with the addition of internationally renowned experts to its Board and Executive Team. Suresh Gunasekaran, President and CEO of UCSF Health, joins the Board of Directors, bringing over two decades of leadership experience at major academic medical centers. Dr. Jeff Teuteberg, a leader in transplant medicine, has been appointed as Chief Medical Officer to spearhead medical education and evidence generation.
As shown in the following slide, these additions bring valuable healthcare system and transplant expertise to CareDx:
The company announced the upcoming launch of HistoMap Kidney, a tissue-based molecular test that aims to expand CareDx’s kidney innovation leadership. This test leverages gene expression profiling to provide deeper insights into immune activity and rejection phenotypes, transforming biopsy tissue into a quantitative molecular report. HistoMap Kidney is expected to be available in multi-center clinical study by early 2026.
CareDx is also making significant progress with its Epic & EMR integration, which is already live at Boston Children’s Hospital Pediatric Transplant Center. This integration has resulted in a 20% reduction in order turnaround time and a 60% reduction in specimen holds. The company has eight integration projects underway and estimates that approximately 10% of volume will be integrated by year-end 2025, growing to approximately 50% by year-end 2026.
The company’s Revenue Cycle Management (RCM) improvements have contributed significantly to financial performance. As illustrated in the following slide, these initiatives have led to substantial improvements in cash collection compared to revenue:
Detailed Financial Analysis
CareDx’s financial performance shows strong improvement in profitability metrics. Non-GAAP gross margin increased by 190 basis points year-over-year to 70.9%, driven by increased average revenue-per-test and a higher margin mix shift in lab products.
Adjusted EBITDA more than doubled year-over-year, growing 122% to $15.3 million from $6.9 million in Q3 2024. This improvement was driven by strong revenue growth, improved gross margin, and disciplined operating expense management.
The following slide details these profitability improvements:
The company’s cash position remains strong at $194 million (net of $26 million share repurchase) with zero debt as of September 30, 2025. Testing services cash collection reached $90 million in Q3 2025, exceeding testing services revenue of $72 million. Corporate free cash flow grew 233% year-over-year to $36.1 million, demonstrating the company’s improved operational efficiency and financial health.
Forward-Looking Statements
Based on its strong Q3 performance, CareDx has raised its full-year 2025 guidance. The company now expects revenue between $372 million and $376 million, up from the previous guidance of $367 million to $373 million. Adjusted EBITDA guidance has also been raised to $35 million to $39 million, compared to the previous range of $29 million to $33 million.
For Q4 2025, the company anticipates revenue between $101 million and $105 million, with testing services volume projected at 52,000 to 54,000 tests and revenue-per-test between $1,400 and $1,420.
The following guidance slide provides a comprehensive overview of the company’s expectations:
CareDx has identified several key drivers of growth for the remainder of 2025. In the second half of the year, the company plans to launch Score 7.0, HistoMap Kidney, and enhance AlloSure Plus. On the evidence generation front, CareDx expects publications from the KOAR registry and SHORE study, along with participation in the World Transplant Congress in August. Operational excellence initiatives include lab products gross margin improvement and the EPIC Aura launch.
The following slide outlines these growth drivers:
Despite the positive outlook, investors should note that the company faces some challenges, including slower growth in kidney transplant volumes and potential impacts from reimbursement policy changes. The Local Coverage Determination (LCD) Draft Policy, published on July 19, 2025, is expected to be finalized in early 2026, which could impact the company’s reimbursement landscape.
Overall, CareDx’s Q3 2025 results demonstrate strong execution across its business segments, with significant improvements in revenue, profitability, and cash flow. The raised guidance reflects management’s confidence in the company’s strategic direction and market position, despite the cautious market reaction to the results.
Full presentation:
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