CareDx, Inc. (CDNA) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. CareDx, Inc. is a precision medicine company focused on transplant, specialty oncology, and cell therapy. The quarter was defined by two major strategic transactions: the divestiture of its lab products business and the acquisition of Naveris, Inc.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Total Revenue | $131.9 million | $86.7 million | $249.6 million | $171.4 million |
| Net Income (Loss) | $110.6 million | ($8.6 million) | $113.4 million | ($18.9 million) |
| Diluted EPS | $2.07 | ($0.16) | $2.13 | ($0.35) |
| Operating Cash Flow (YTD) | $34.9 million | ($16.7 million) | $34.9 million | ($16.7 million) |
| Cash & Equivalents (End of Period) | $373.6 million | $68.2 million | $373.6 million | $68.2 million |
| Debt | $0 | $0 | $0 | $0 |
Note: Net income for Q2 2026 includes a one-time gain of $113.0 million from the sale of the lab products business.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 52% year-over-year in Q2 2026. Testing services revenue grew 61% to $100 million, driven by a 17% increase in test volume and higher net collections from prior periods. Patient and digital solutions revenue grew 50% to $19.2 million.
- Profitability Shift: The company reported a net income of $110.6 million compared to a net loss of $8.6 million in the prior year. This turnaround is primarily attributable to the $113.0 million gain on the sale of the lab products business to Eurobio Scientific S.A., which closed on June 30, 2026.
- Expense Trends: Operating expenses (excluding the gain on sale) increased due to higher personnel costs in R&D, Sales & Marketing, and G&A. However, litigation settlement expenses decreased significantly compared to the prior year.
- Liquidity: Cash and cash equivalents increased from $65.4 million at year-end 2025 to $373.6 million at June 30, 2026, largely due to proceeds from the divestiture ($171.7 million) and sales of marketable securities.
Guidance, Outlook, and Risks
- Acquisition of Naveris: On July 1, 2026, CareDx completed the acquisition of Naveris, Inc. for $161.8 million in cash, plus up to $100 million in contingent consideration based on revenue milestones. This expands CareDx into specialty oncology testing (HPV-mediated cancers).
- Stock Repurchases: The company exhausted its $50 million May 2025 repurchase program ($12.2 million spent in Q2). A new $100 million repurchase program was authorized in April 2026, with no shares repurchased under this new program as of June 30.
- Reimbursement Risks: Approximately 30% of revenue is derived from Medicare. The company faces ongoing risks related to coverage determinations and reimbursement rates, including a recent CMS final determination on CPT codes effective January 2026.
- Legal Contingencies: While the DOJ and SEC investigations were closed with no findings of wrongdoing, the company remains subject to ongoing litigation with Natera regarding patent validity and infringement, though recent court rulings have invalidated several of Natera's asserted patents.
Investor Verification Checklist
- Recurring Profitability: Verify the company's ability to generate net income excluding the one-time $113 million gain on the lab products sale.
- Naveris Integration: Monitor the integration progress of Naveris and the realization of cross-selling opportunities in the oncology space.
- Medicare Reimbursement: Track the impact of the new CPT code (0493U) and the volume-weighted median reporting requirements under PAMA on future revenue per test.
- Cash Deployment: Assess the utilization of the $373.6 million cash balance, particularly regarding the $100 million new stock repurchase program and potential future capital needs.
- Legal Exposure: Review the status of the Natera patent litigation appeals and any potential financial impact from the $96.3 million jury award that was previously overturned but remains subject to appeal.