Good day, everyone, and welcome to today's CareDx Second Quarter 2025 Earnings Call. [Operator Instructions] 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, CareDx 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 securities 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 Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, August 6, 2025. CareDx 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 CareDx'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 CareDx solutions. We view this breadth of scientific data as a leading indicator of future peer-reviewed publications and clinical adoption. On our WTC micro site at caredx.com/wtc, you can see our new branding, view the full list of CareDx abstracts presented this week and sign up to participate in our post-conference webinar highlighting the data presented on CareDx 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 test, 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 million to $373 million. We continue to expect adjusted EBITDA of $29 million to $33 million. Abhishek will provide additional…

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 recognized $13.2 million in revenue for the tests performed in prior periods in the second quarter of 2024. Adjusted 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 & Digital 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 impact of tests performed in prior periods, our non-GAAP gross margin improved 340 basis points to 70.4%. Adjusted Testing Services non-GAAP gross 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 & Digital Solutions non-GAAP gross margin…

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 4 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 CareDx tomorrow, August 7, 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.

[Operator Instructions] And we will take our first question from Tycho Peterson with Jefferies

This is Lauren on for Tycho. 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.

Yes. Thanks for the question, Lauren. I think as we said in our prepared remarks, there are 3 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 HeartCare 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.

And our next question comes from Brandon Couillard with Wells Fargo.

Appreciate the color on the kidney test volume growth in the quarter. Any data you could 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 derisk?

Yes. Thanks, Brandon. Appreciate the questions. With heart and lung, both grew well on the quarter. Lung obviously is a smaller proportion of our overall volume, but we saw a 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 out of the clinic for a week to do that. So, we still see continued growth and 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. Yes, we're on, we're about 2 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 4 centers that will 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 to 50% adherence through EPIC or as a connector by the end of next year. Does that help, Brandon? Does it answer your question?

Yes.

[Operator Instructions] And we will take our next question from Mark Massaro with BTIG.

This is Vivian on for Mark. 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 draft LCD.

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

Okay. Yes, that's understandable. And then 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 AlloMap Heart was run as stand-alone. And so it was not associated with HeartCare at all. So I'm just curious what your assumptions were in informing that $30 million headwind.

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

Perfect. That's helpful color. 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 are surveillance versus cause? Just asking because it would be helpful to get some metrics around how that's trending.

Yes. We haven't split that out, but it is shifting since the August of last year retraction of the draft policy that attempted to limit surveillance testing only in scenarios where you're doing a protocol biopsy. And that clarity effectively drove 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 it certainly is a dynamic where we see significant movement toward surveillance over for cause testing as a function of all those protocols being implemented.

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.