Inquiring about the conservative 30% YOY growth guidance for NavDx (vs. 30-40% long-term), Q2 volumes, and levers to drive ASPs higher in 2027 from the guided $780 blended ASP.

Keith Kennedy confirmed the guidance is prudent due to the ongoing integration of NavDx into CareDx's billing system in Q4. He reiterated the belief in 30-40% long-term growth and expects ASPs to move up to $1,000-$1,100 as more evidence is published and billing processes are established. “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.”

Asking about factors driving acceleration in transplant volume growth, specifically surveillance testing trends and additional insights into drivers.

John Hanna attributed growth to both surveillance and for-cause testing. He highlighted improved workflow in practices, leading to increased average surveillance tests per patient, supported by clinical and patient liaison teams. “surveillance testing continues to gain ground as does for cause. You know, 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.”

How the company balances continued EBITDA margin expansion in 2027 with potential investments in NavDx, given the raised 2026 guidance.

Keith Kennedy stated that while NavDx is currently 10% of revenue, they envision investing behind it. He believes the company should run at 20% EBITDA margins long-term and profitability is a key discussion point. He acknowledged that significant investments could temporarily impact margins but will be evaluated in annual operating planning. “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.”

CDNA

CareDx (CDNA) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Jul 30, 2026

Source: earnings call transcript

Executive summary

CareDx Q2 FY26 — Strong Growth, NAVDX Integration, and Pipeline Advancement

CareDx delivered a strong second quarter, driven by robust growth in its core transplant testing services and strategic advancements in its pipeline and recent NavDx acquisition. The company raised its full-year revenue and adjusted EBITDA guidance, reflecting confidence in its precision molecular diagnostics model and the successful integration of new businesses. Management is focused on expanding market access and leveraging its commercial and operational scale to drive future profitability.

Highlights

Total revenue increased 52% to $132 million in Q2 FY26.
Testing services revenue grew 61% to $100 million, with volume up 17% to 58,000 tests.
Non-GAAP gross margins expanded to 74% in Q2 FY26.
Adjusted EBITDA increased to $25 million (19% of revenue) in Q2 FY26.
Full-year 2026 revenue guidance raised to $490-$500 million, representing a 30% increase at the midpoint.

Concerns

Specialty oncology average ASP per test is guided at $770-$795 for H2 FY26, lower than the $1,000-$1,100 long-term target.
Integration of NavDx into CareDx's billing system is a significant undertaking in Q4 FY26, requiring prudence in near-term guidance.

Guidance & targets

Category	Target	Timeline	Confidence
Total Revenue	$490 million to $500 million high materiality	Full-year 2026 · FY26	High
Adjusted EBITDA	$66 million to $78 million high materiality	Full-year 2026 · FY26	High
Testing Volume	258,000 to 266,000 tests medium materiality	Full-year 2026 · FY26	High
Q3 Testing Volume	72,600 tests medium materiality	Q3 · FY26	High
Q4 Testing Volume	76,300 tests medium materiality	Q4 · FY26	High
Non-GAAP Gross Margin	71% to 73% medium materiality	Full-year 2026 · FY26	High
Operating Expenses	$293 million to $297 million medium materiality	Full-year 2026 · FY26	High
Depreciation Expense	approximately $10 million low materiality	Full-year 2026 · FY26	High
Testing Services Revenue	$400 million high materiality	Full-year 2026 · FY26	High
Patient and Digital Revenue	$72 million medium materiality	Full-year 2026 · FY26	High
Product Revenue	$23 million medium materiality	Full-year 2026 · FY26	High
Specialty Oncology Revenue	$24 million medium materiality	H2 FY26	High
Q3 Out-of-Period Revenue	$8 million low materiality	Q3 · FY26	High
Q4 Out-of-Period Revenue	$4 million low materiality	Q4 · FY26	High
Q3 Transplant Average ASP per Test	$1,455 medium materiality	Q3 · FY26	High
Q4 Transplant Average ASP per Test	$1,465 medium materiality	Q4 · FY26	High
Q3 Specialty Oncology Average ASP per Test	$770 medium materiality	Q3 · FY26	High
Q4 Specialty Oncology Average ASP per Test	$795 medium materiality	Q4 · FY26	High
LCD Impact on Prior Guidance	Removed $7.5 million medium materiality	Full-year 2026 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Testing Services Strong growth driven by both surveillance and for-cause testing, supported by improved workflow in practices. Testing volume: 58,000 testsRevenue per test: $1,720	$100 million	61%	—	—
Patient and Digital Solutions Growth principally driven by pharmacy.	$19 million	50%	—	—
Lab Products Revenue for Q2 FY26 before the divestiture of the business.	$13 million	8%	—	—

Deals & partnerships

NAVDX Acquisition of a clinically differentiated solid tumor MRD platform.

The acquisition expands CareDx's TAM into specialty oncology, leveraging its core competencies for growth.

Undisclosed Sale of the non-core lab products business. $172 million

The divestiture allows CareDx to focus on its highest value opportunities and reduces regulatory overhead.

Risks & headwinds

Integration of NavDx billing system Q4 FY26

Specialty oncology ASP guided lower ($770-$795) than long-term target ($1,000-$1,100) due to prudence during integration.

Mitigation:Leveraging CareDx's established workflows and claims processing expertise to move NavDx to its billing system.

Regulatory burden of IBD kit business Ongoing (mitigated by divestiture)

Required 3x the number of people in regulatory team compared to CLIA business.

Mitigation:Divestiture of the lab products business to focus on the CLIA business model, which has lower regulatory overhead.

What to watch in Q3 FY26

NavDx ASP improvement

Next few years, with updates in Q4 call

Current $770 (Q3 FY26 guidance), $795 (Q4 FY26 guidance)

Target Moving towards $1,000-$1,100

Why it matters

Indicates successful integration of NavDx billing and market acceptance, impacting profitability.

I do believe that number should move up to $1,000 to $1,100. They get $1,800 from Medicare. And I think as we publish more and more evidence and, you know, we continue to do that. 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.

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Q&A highlights

Seeking feedback on the finalized LCD from the field (docs/commercial team) and whether it could create tailwinds, especially for HistoMAP coverage.

John Hanna stated the policy reflects evidence and affirms coverage for surveillance testing. He noted no immediate field feedback as it's a payment policy, not a volume driver. He highlighted the positive outcome for existing products and the future pathway for HistoMAP coverage.

“Yes, we believe that the policy 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.”

asked by Matthew Larew · answered by John Hanna

3 min read 6 chapters

Detailed narrative

Pipeline Progress and Innovation

CareDx is advancing its pipeline with Allaheem, a recurrence monitoring test for AML and MDS hematologic malignancies, which is on track for CLIA readiness by year-end 2026 and a planned 2027 commercial launch. A clinical validation manuscript for Allaheem, demonstrating its ability to predict relapse a median of 41 days before clinical diagnosis, has been submitted to a peer-reviewed journal.

Additionally, HistoMAP Kidney, a molecular tissue biopsy assessment tool, showed promising new data published in Transplantation, distinguishing patients with significantly different graft loss outcomes. The company intends to launch HistoMAP Kidney in a clinical study this year and make it commercially available more broadly in 2027.

NavDx Acquisition and Integration

The recent acquisition of NavDx, a specialty oncology company with a solid tumor MRD platform, is progressing with encouraging momentum. CareDx is focusing its integration efforts on leveraging its commercial capabilities, workflow expertise (including Epic integration), and revenue cycle management to expand adoption and market access for NavDx.

These initiatives aim to combine NavDx's differentiated technology with CareDx's established commercial reach and operational scale to drive value creation.

Clinical Evidence and Market Adoption

New data presented at the 2026 American Head and Neck Society Annual Meeting for NavDx highlighted the clinical significance of its quantitative score in predicting response to salvage therapy for HPV-driven cancers. Furthermore, 33 experts across 15 institutions published consensus recommendations supporting the use of circulating tumor HPV DNA for diagnosis and surveillance, signaling its growing establishment in clinical practice.

This evidence generation strategy is crucial for building clinical confidence and supporting future adoption.

Transplant Diagnostics Leadership

CareDx continues to strengthen its leadership in transplant diagnostics, with molecular testing increasingly integrated into clinical decision-making. Data presented at the American Transplant Congress (ATC) reinforced AlloSure Kidney's role beyond surveillance, demonstrating its utility in risk assessment, treatment response, and long-term graft outcomes.

A study of over 1,100 kidney transplant recipients from the KOR Registry showed that 35% of patients with persistently elevated AlloSure levels faced a nine-fold higher risk of graft loss, emphasizing the importance of longitudinal monitoring.

Medicare Coverage Affirmation

A significant milestone was the finalization of the Medicare local coverage determination (LCD) for solid organ transplant molecular testing on July 16th. This policy affirms coverage for surveillance testing across kidney, heart, and lung transplants, reinforcing the role of AlloSure and AlloMap in post-transplant patient management.

The policy also establishes a framework for future innovation, including a pathway for HistoMAP coverage and potential expansion into additional organs like liver transplant, acknowledging molecular diagnostics as integral to transplant management.

Operational Efficiency and Financial Strength

The divestiture of the lab products business, completed on June 30th, generated $172 million in consideration and a $113 million GAAP gain on sale ($104 million excluded from non-GAAP operating income). This strategic move improved the company's cash cycle by 70 days and significantly reduced regulatory and quality overhead associated with the kit business.

CareDx ended the quarter with a strong cash position of $374 million and no debt, providing flexibility for future investments and growth initiatives.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.