Good day, everyone, and welcome to today's CARE DX Second Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask a question during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star and two. Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Caroline Corner, Investor Relations.

Thank you, Operator. Good afternoon. Thank you for joining us today. Earlier today, CARDIX released financial results for the second quarter, 2025, ending June 30, 2025. The release is currently available on the company's website at www.caredx.com. Joining me on today's call are John Hanna, President and Chief Executive Officer, and Abhishek Jain, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of the federal security laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, our examination of historical operating trends, expectations regarding coverage decisions, pricing and enrollment matters, and our financial expectations and results are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and descriptions of the risks and uncertainties associated with our business, please see our filings with the Security and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, August 6, 2025. CAR-DX disclaims any intention or obligation, except as required by law, to update or revise any information, financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measure may be found in today's earnings release filed with the SEC. I will now turn the call over to John.

Thank you, Caroline. And welcome to everyone joining today's call. This week concluded the World Transplant Congress, or WTC, the largest global transplant event of 2025 held here in San Francisco, California. At the event, we unveiled our evolved brand identity with a fresh new look that embodies the notion that we are together in transplant with the clinicians and patients we serve. At the WTC, there were more than 40 abstracts and 16 oral presentations with scientific data on kidney, heart, lung, and liver demonstrating CARDI-X's advances in AI predictive diagnostics, transplant access, and organ-specific innovation. These studies reflect the strength of our scientific collaborations and the growing body of evidence supporting CARDIX solutions. We view this breadth of scientific data as a leading indicator of future peer-reviewed publications and clinical adoption. On our WTC microsite at CARDIX.com slash WTC, you can see our new branding, view the full list of CARDIX abstracts presented this week, and sign up to participate in our post-conference webinar highlighting the data presented on CARDIX products. Now on to the quarter. Throughout my prepared remarks, I will be referencing our presentation posted on the Investor Relations section of our website. We made good progress against our growth drivers and financial KPIs in the second quarter, as outlined on Slides 3 and 4 of our presentation. Adjusted revenue, which excludes revenue associated with tests performed in prior periods, was $90.5 million, up 14% year-over-year. Excluding the prior period tests, adjusted EBITDA was $9.1 million compared to an adjusted loss of $300,000 last year. With half of the year completed, we are reaffirming the midpoint of our 2025 revenue guidance and narrowing the range to $367 to $373 million. We continue to expect adjusted EBITDA of $29 to $33 million. Evishek will provide additional detail on our guidance in his prepared remarks. In testing services, adjusted testing services revenue was $66 million for the second quarter, up 14% year-over-year, as shown on slide 5. We delivered approximately 49,500 tests in the second quarter, up 13% from the prior year, as shown on slide six. It was our eighth consecutive quarter of sequential testing volume growth, with growth across all three organs, heart, kidney, and lung. In kidney, we have made significant progress expanding surveillance testing protocols. On the third quarter 2024 call, we said it would take two to three quarters to turn surveillance protocols back on. I'm pleased to share that in the second quarter, we surpassed 60 surveillance protocols nationally, and kidney testing volume grew nearly 20% year over year. Our growth strategy is working. To further differentiate our solution in kidney transplant monitoring, we launched Alishore Plus at this week's World Transplant Congress. Alishore Plus is an AI-driven diagnostic that integrates Allasure results and standard of care measures such as serum creatinine and protein urea to deliver a personalized risk score of rejection. We plan for Allasure Plus to be seamlessly reported with every Allasure result via our EPIC integrations as we roll out EPIC connectivity in the second half of the year. Multiple abstracts at WTC underscore the clinical utility of Allashore Plus, including an abstract by Dr. Romain Brousseau of the Paris Transplant Group, who presented data highlighted on slide six from over 3,000 patients and 4,000 biopsies across 20 global centers, validating the performance of Allashore Plus risk rejection score, and demonstrated that it accurately identifies both subclinical and acute rejection, supporting earlier and more precise clinical decision-making. There were over 30 abstracts on Alisher kidney at the WTC, including an oral abstract highlighted on slide 7 of our presentation with new data from the KOR study presented by Dr. David Wojciechowski at the UT Southwestern Medical School that showed early elevations in Alisher post-transplant are prognostic for graft loss at three years, laying the foundation for earlier intervention and immune modulation strategies. This data reinforces the value of Allashore kidney in early risk stratification and long-term management. We also had a strong representation in heart transplantation at WTC, with nine abstracts highlighting CARDIX products, including five from the SHORE Registry, presented by leading institutions such as NYU, University of Washington, Cedars-Sinai, University of Chicago, and UCLA. These studies reinforce the clinical value of heart care. For example, an analysis of 2,200 patients in the SHORE study, presented by Dr. Jeff Tutteberg of Stanford University on slide 8 of our presentation shows that in patients with persistently elevated dual positive heart care, we're 90% more likely to experience adverse outcomes post-heart transplant regardless of biopsy results. These findings support the use of heart care to reduce reliance on biopsies through multimodal surveillance, combining Allomap Heart and Allasure Heart to provide a more comprehensive and predictive view of allograft health. Commercially, reception has been strong for our expanded indication for Allasure Heart for pediatric patients. There's a movement towards standardized protocol development at a number of pediatric heart transplant centers who recognize the need for non-invasive testing in this population due to the risks and challenges of biopsy under general anesthesia for pediatrics. Recently, a youth patient and his mother spoke to our company at a town hall and shared their near-death experience with a surveillance biopsy under general anesthesia. It is stories like theirs that embolden us to deliver on our mission to create life-changing solutions that enable patients to thrive. Turning to lung, at WTC, Dr. Sam Waite of the UCLA Lung Transplant Program presented data on slide 9 of our presentation showing the power of precision monitoring with Allosure The study showed that tracking relative changes in Allosure Lung improved detection of subclinical lung allograft injury and infection. This approach demonstrated higher sensitivity and specificity, especially in single lung recipients, reinforcing the clinical value of Allasure Lung in guiding earlier interventions. In evidence generation, we made big strides this quarter, executing against our market access strategy for publishing evidence, expanding medical policy coverage, and getting into payer networks. Today, we announced a significant milestone. The first manuscript of the CAOR study was published in the American Journal of Transplantation. The study highlighted on slide 10 of our presentation is the largest prospective study of its kind and with 56 participating centers that enrolled over 1,700 kidney transplant patients who received over 18,000 Allashore tests in the study. The study followed the DART protocol, which prescribed seven tests in year one and four annually in years two and three. The manuscript findings confirm that Allashore kidney is a clinically actionable tool that enhances rejection management by showing that Allashore kidney levels correlate with rejection severity, higher levels associated with ABMR and mixed rejection, and lower levels linked to borderline or TCMR1A. This stratification capability positions Allashore kidney as a critical tool for tailoring immunosuppression and biopsy decisions based on individualized patient risk. In the second quarter, we added 4.2 million new covered lives for Allomap Heart and became an in-network provider with a large commercial health plan in the Northeast covering 1.2 million lives. Importantly, our Alishore CPT code went live in April, and in July at the Clinical Lab fee schedule meeting, the CLFS advisory panel voted to crosswalk the code to a similar testing code. We anticipate the agency will release preliminary pricing recommendations in September and provide the opportunity for public comment. I would like to spend a few minutes now on the draft LCD policy for molecular testing for solid organ allograft rejection published on July 17th. We view the draft policy as a significant step forward. The policy affirms coverage for surveillance testing without a tie to protocol biopsy, which has been the primary focus of our advocacy efforts. As a reminder, the draft LCD public comment period lasts for 45 days after publication. Medicare rules generally require draft policies to be finalized within one year, as outlined on slide 11 of our presentation. We are currently in the public comment period until August 31st and intend to comment on several aspects of the draft LCD, including allowing clinicians to determine the cadence of surveillance testing based upon established practices and the patient's pretest risk of rejection, the extensive evidence supporting ALAMAP heart and heart care as a multimodal method that identifies rejection with greater accuracy than cell-free DNA or gene expression testing alone, and the newly proposed concept of bundled payments for surveillance testing. We plan to publish our letter on our website following the close of the comment period. Today, I would like to provide a framework for how we are thinking about the potential impact of the draft policy. I'll describe two separate potential scenarios that we have modeled. In the first scenario, assuming the draft policy is implemented as written with bundled payments for surveillance testing, we estimate the impact of surveillance testing frequency limits to be an approximate $15 million headwind on a full-year basis. With commercial focus on driving adherence to testing protocols, we estimate over time the proportion of patients that receive more tests than the frequency limits will exceed the proportion receiving fewer tests. Half of this impact comes from kidney surveillance testing in year one that exceeds the proposed frequency limit, and the other half from heart surveillance testing in years two and three that exceed the proposed frequency limit. In the second scenario, if the draft policy were to be finalized without bundled payments for surveillance testing and without frequency limits, and the proposed policy to pay for only one molecular test per date of service is maintained, such that Alamap Heart is effectively no longer reimbursed as a part of heart care, we estimate the impact to be an approximate 30 million headwind on a full-year basis. Importantly, we continue to drive protocol adoption and adherence, which has been demonstrated to improve patient outcomes and have not changed how we engage and support our customers in response to the draft policy. Once the draft is finalized and we have a clearer estimate, we will update our long-range financial expectations. Moving on to our operational excellence initiatives, we are continuing to improve our enterprise infrastructure and business processes to operate more efficiently, such that revenue growth outpaces operating expenses as we scale. We made progress with the launch of our Epic instance, which we believe will be a key differentiator, making it easier for healthcare providers to order Alashure and Alomap testing and receive test results. We anticipate going live with three pilot sites through Epic Aura in the third quarter and plan to make a broader push for Epic integration starting in the fourth quarter. In the second quarter, we continue to make progress with revenue cycle management, driving confidence in future testing ASP growth. As illustrated on slide 12 of our presentation, we have now implemented 100% of RCM workflows and are performing 100% of patient insurance eligibility verifications. As a result of these and other changes to our processes, we have driven improvements across various RCM KPIs, including a 60% reduction in claim submission time, a 45% increase in prior authorization success rate, an 800 basis point reduction in claims rejection rate, and a 160% improvement in total appeals volume since last December. These behind-the-scenes wins are key leading indicators for longer-term ASP growth and are beginning to be reflected financially. Cash collections in the second quarter accelerated to 105% of adjusted testing services revenue, and payment per test is increasing across all tests and all payer classes. I'll now turn to patient and digital solutions, which includes our transplant pharmacy, software tools, and remote patient monitoring services. In the second quarter, we reported revenue of approximately $12.8 million, representing 19% growth compared to last year, as highlighted on slide 13 of our presentation. Our go-to-market strategy of solution selling is working, and we continue to see our patient and digital solutions helping to unlock growth opportunities for testing services. In the quarter, we released an update to our quality reporting software, ZinQuapi, that now includes an IOTA program performance composite score calculation that accounts for growth in transplant volume, organ utilization rates, and patient outcomes. We have received very positive feedback on the tool, with more than 70 transplant programs participating in our educational webinar. And although a center's year one performance will not be calculated until July 2026, our quality reporting tool enables them to monitor performance in real time throughout the year. Turning now to lab products, which includes PCR kits for rapid deceased donor HLA typing, NGS kits for transplant recipient HLA typing globally and IVD monitoring assays for solid organ and stem cell transplant recipients outside of the U.S., revenue of $11.8 million was up 12% year over year, driven by sales of our Allosec TX, our next-generation sequencing HLA typing kits for organ recipients. In summary, we had a strong second quarter executing across all of our key drivers, including our go-to-market strategy, evidence generation, and operational excellence. Now I'll turn the call over to Abhishek to share more details on our second quarter financial results.

Thank you, John, and good afternoon, everyone. In my remarks today, I will discuss our second quarter financial results and revised 2025 guidance. Unless otherwise noted, my comments will focus on non-GAAP results. For further information, please refer to GAAP to non-GAAP reconciliations in our press release, earnings presentation, and recent SEC filings. We reported revenue of $86.7 million, which included a $3.8 million write-off associated with tests performed in prior periods, down 6% year-over-year. Excluding that adjustment, adjusted revenue of $90.5 million grew 14% year-over-year on a comparable basis. Testing services revenue, as reported, was $62 million, down 13% year-over-year. In the quarter, as we took a write-off of $3.8 million associated with prior period claims, for which we do not expect to collect additional payments. With the improvements John outlined in our RCM processes, we do not expect this to recur in future periods. As a reminder, we recognize $13.2 million in revenue for the tests performed in prior periods in the second quarter of 2024. Adjusting to exclude impacts associated with tests performed in prior periods, testing services revenue was $65.9 million, up 14%. We delivered approximately 49,500 test results in the second quarter, up 13% year-over-year. This marks our eighth consecutive quarter of sequential testing services volume growth. Patient and distance solutions revenue was $12.8 million, up 19% year-over-year. Product revenue was $11.8 million, up 12% year-over-year. Adjusted to exclude the impacts of tests performed in prior periods, our non-gap growth margin improved 340 basis points to 70.4%. Adjusted testing services' non-gap growth margin was 77.6% in the second quarter compared to 76.4% in the second quarter of last year. The 120 basis point improvement was primarily driven by strong volume growth and continued efficiencies in our lab operations. Patient and distal solutions non-GAAP gross margin for the quarter was 39.5% compared to 36.7% last year. Both our core distal solutions and pharmacy contributed to gross margin expansion with improved pricing and operational efficiencies. Excluding our transplant pharmacy, our patient and disease solutions non-cap gross margin reached 70%. Lab product's gross margin was 63.9%, up 17 points compared to 47.1% last year. The improvement was primarily driven by annual price increases, successful negotiations with our suppliers to reduce cost of goods sold, and an intentional shift in sales mix within our NJ's portfolio towards 96-plex kits, which have better margins. Moving down the P&L, non-GAAP operating expenses were $56.7 million compared to $55.2 million in the same period last year. The increase was primarily driven by investments in sales and marketing to advance our commercial go-to-market strategy and accelerating growth. We continue to manage our operating expenses well. Year-over-year, operating expenses growth of 3% was well below adjusted revenue growth of 14%. Excluding the impact of tests performed in prior periods, adjusted EBITDA was $9.1 million in the second quarter, compared to an adjusted EBITDA loss of $0.3 million in the second quarter of 2024. The improvement was driven by revenue growth and operational leverage, which contributed to better gross margins and improved non-GAAP operating expenses as a percent of revenue. Turning to cash, we generated $10 million in cash from operating activities in second quarter. We ended the quarter with $186 million in cash and cash equivalents with no debt. following a $50 million repurchase of approximately 5% of our outstanding shares. I'll turn next to updated guidance. With half of the year completed, we are narrowing full year 2025 revenue guidance to $367 to $373 million compared to $365 to $375 million previously. The midpoint of guidance remains the same. Turning to the underlying drivers of revenue guidance, we anticipate our test volumes to grow mid-teens year-over-year. On testing volumes, sequential growth by quarter, we continue to expect 2% to 3% growth in the third quarter and 5% to 6% growth in the fourth quarter of 2025. We estimate full-year ASP of approximately 1360 per test adjusted for revenue associated with tests performed in prior periods. This does not assume any changes to medical coverage. We expect our patient and distal solutions to grow in the low 20s and lab products revenue to grow in the mid-teens for the full year. We expect our full-year non-GAAP gross margin to be approximately 70% and operating expenses to be approximately 235 million. And we expect our adjusted EBITDA to be between 29 and 33 million. With that, I'll now turn the call back over to John.

Thank you, Abhishek. Before closing our prepared remarks, I would like to announce today that Abhishek Jain is retiring from his role as CFO at CareDX. On behalf of the board, all of our employees, and the clinicians and patients we serve, I want to thank Abhishek for his outstanding leadership over the past four years. Abhishek maintained disciplined financial management through a turbulent time and is the steward that returned us to growth and profitability. The company is stronger today than when he took the helm, and I want to thank him and wish him all the best. Abhishek will continue to support the company on a consulting capacity to ensure a smooth transition. We are also announcing today the appointment of Nathan Smith as CFO. Nathan is a veteran of the molecular diagnostics industry. He was with Myriad Genetics for 14 years in leadership roles, including Senior Vice President of IR, Finance and Treasury, SVP of FP&A, and Corporate Controller. Most recently, Nathan served as CFO for several private equity-backed companies. Nathan will begin with CARDIX tomorrow, August 7th, and I look forward to introducing him to you all. And now, I would like to ask the operator to open the line for questions.

Certainly. And at this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star and 1 to ask a question. And we will pause for a moment to allow questions to queue. And we will take our first question from Tycho Peterson with Jefferies. Please go ahead.

Hi, team. Thanks so much. This is Lauren on for Tyco. One from me around the LCD, you really nicely laid out kind of some of the scenarios that you expect to happen and potential headwinds kind of that's going to come with them. What is the scenario or kind of what is the topics of discussion that you kind of want to bring forward into the public kind of forum where you would see a scenario in terms of kind of baseline margin or kind of improvement? Maybe talk a little bit about that.

Yeah, thanks for the question, Lauren. I think as we said in our prepared remarks, there are three topics that we'll focus our comments on, including the frequency of testing and allowing providers to determine the appropriate frequency for a patient, the evidence supporting heart care as a product that improves the care of heart transplant patients and the need for multimodality testing. And then the third is the newly introduced concept of bundled payments. And we intend to publish our comment letter on our website when the comment period ends.

Great. Thank you. I'll hop back in the queue.

Thank you. And our next question comes from Brandon Coyar with Wells Fargo. Please go ahead.

Hey, thanks. Good afternoon, guys. Appreciate the color on the kidney test volume growth in the quarter. any data you can share with us on heart and lung. And with respect to the Epic launch, I think last quarter you talked about having that mostly rolled out by 2Q. Now it seems to be more of a second half event. Can you just kind of talk through the complexities that might be involved in that and maybe what you're trying to de-risk? Thanks.

Yeah, thanks, Brandon. Appreciate the questions. You know, with heart and lung, both grew well on the quarter. Lung obviously is a smaller proportion of our overall volume, but we saw, you know, nice, nice, steady movement in heart in the second quarter. We also have the big ISHLT, the International Society of Heart and Lung Transplant in the second quarter. So people end up being, you know, out of the out of the clinic for a week to do that. So we still see continued growth and, you know, transplant volumes picked up in the second quarter. And that's been a positive for us. I'll let Keith talk a little bit about the Epic implementation and what the timeline looks like there. Great.

Thanks, John. Yeah, we're about two months ahead of anybody who's ever implemented Epic. We took over our instance in June. We initiated our pilot program shortly thereafter, which will be four centers that should go live in the third quarter. By the end of the year, we expect to have 10% of our volume. And then we're building out a pipeline and a plan to roll out to try to get the 50% adherence through Epic or as a connector by the end of next year.

Does that help, Brandon, to answer your question? Yes, thank you.

Thank you. And once again, if you would like to ask a question, please press the star and one on your telephone keypad now. And we will take our next question from Mark Massaro with BTIG. Please go ahead.

Hi, this is Vivian on for Mark. Thanks for taking the questions. So, I just wanted to start off and see if there was any change to the LRPs that you established last year as a result of the dropped LCD.

Hi, Divya. Thanks for the question. We're not providing an update to the LRP until we get greater clarity on the final LCD.

Okay, yep, that's understandable. And I'm just curious about the $30 million headwind that you cited in the second scenario that you laid out. It was my understanding that a good chunk of Alumap heart was run as standalone, and so it was not associated with heart care at all. So I'm just curious what your assumptions were in informing that $30 million headwind.

Yeah, thanks for the question. I think we've said consistently that the attachment rate of heart care is upwards of 90%. And so that would indicate that if that second scenario were to come to fruition, then that ALAMAP heart revenue potentially would go away. And that's how we calculated that $30 million headwind.

Okay, perfect. That's helpful, Collar. If I could just squeeze in one last one. You talked about the progress in kidney. Just how should we be thinking about maybe an updated split on roughly what percentage our surveillance versus spore cause, just asking because it would be helpful to get some metrics around how that's trending.

Yeah, we haven't split that out, but it is shifting since the August of last year retraction of the draft policy that attempted to, you know, limit surveillance testing only in scenarios where you're doing a protocol biopsy. And that clarity effectively drove, you know, behavior change in the market, which has allowed us to implement those surveillance protocols and drive up kidney testing overall by the 20%, nearly 20% year over year. So we're not breaking that out, But, you know, it certainly is a dynamic where we see significant movement toward surveillance over four-cause testing as a function of all those protocols being implemented.

Perfect. Thanks so much for taking the questions.

Thank you.

Thank you. And there are no further questions at this time. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.