The following discussion and analysis of our financial condition and results ofoperations should be read together with the unaudited condensed consolidatedfinancial statements and related notes included elsewhere in Item 1 of Part I ofthis Quarterly Report on Form 10-Q and with the audited consolidated financialstatements and the related notes included in our Annual Report on Form 10-K forthe fiscal year ended December 31, 2019, filed with the Securities and ExchangeCommission, or the SEC, on February 28, 2020.SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Quarterly Report on Form 10-Q contains forward-looking statements withinthe meaning of Section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended. All statementscontained in this Quarterly Report on Form 10-Q other than statements ofhistorical fact, including statements regarding our future results of operationsand financial position, our business strategy and plans, and our objectives forfuture operations, are forward-looking statements. The words "believe," "may,""will," "potentially," "estimate," "continue," "anticipate," "intend," "could,""should," "would," "project," "plan," "target," "contemplate," "predict,""expect" and the negative and plural forms of these words and similarexpressions are intended to identify forward-looking statements.These forward-looking statements may include, but are not limited to, statementsconcerning the following:the potential impact to our business, revenue, financial condition andemployees, including disruptions to our testing services, laboratories, clinicaltrials, supply chain and operations, due to the COVID-19 global pandemic;our ability to take advantage of opportunities under the Coronavirus Aid,Relief, and Economic Security Act, or the CARES Act, and the potential impact ofthe CARES Act on our business, results of operations, financial condition orliquidity;our ability to generate revenue and increase the commercial success of ourcurrent and future testing services, products and digital solutions;our ability to obtain, maintain and expand reimbursement coverage from payersfor our current and other future testing services, if any;our plans and ability to continue updating our testing services, products anddigital solutions to maintain our leading position in transplantations;the outcome or success of our clinical trial collaborations and registrystudies; including Kidney Allograft Outcomes AlloSure Registry, or K-OAR, theOutcomes of KidneyCare on Renal Allografts registry study, or OKRA, and theSurveillance HeartCare Outcomes Registry, or SHORE;the favorable review of our testing services and product offerings, and ourfuture solutions, if any, in peer-reviewed publications;our ability to obtain additional financing on terms favorable to us, or at all;our anticipated cash needs and our anticipated uses of our funds, including ourestimates regarding operating expenses and capital requirements;anticipated trends and challenges in our business and the markets in which weoperate;our dependence on certain of our suppliers, service providers and otherdistribution partners; 25-------------------------------------------------------------------------------- Table of Contentsdisruptions to our business, including disruptions at our laboratories andmanufacturing facilities;our ability to retain key members of our management team;our ability to make successful acquisitions or investments and to manage theintegration of such acquisitions or investments;our ability to expand internationally;our compliance with federal, state and foreign regulatory requirements;our ability to protect and enforce our intellectual property rights, ourstrategies regarding filing additional patent applications to strengthen ourintellectual property rights, and our ability to defend against intellectualproperty claims that may be brought against us;our ability to successfully assert, defend against or settle any litigationbrought by or against us or other legal matters or disputes; andour ability to comply with the requirements of being a public company.These forward-looking statements are subject to a number of risks, uncertaintiesand assumptions, including those described in the section entitled "RiskFactors" in this Quarterly Report on Form 10-Q and in our Annual Report on Form10-K for the fiscal year ended December 31, 2019, filed with the SEC onFebruary 28, 2020. Moreover, we operate in a very competitive and rapidlychanging environment, and new risks emerge from time to time. It is not possiblefor our management to predict all risks, nor can we assess the impact of allfactors on our business or the extent to which any factor, or combination offactors, may cause actual results to differ materially and adversely from thosecontained in any forward-looking statements we may make. In light of theserisks, uncertainties and assumptions, the forward-looking events andcircumstances discussed in this report may not occur and actual results coulddiffer materially and adversely from those anticipated or implied in theforward-looking statements.You should not rely upon forward-looking statements as predictions of futureevents. Although we believe that the expectations reflected in theforward-looking statements are reasonable, we cannot guarantee that the futureresults, levels of activity, performance or events and circumstances reflectedin the forward-looking statements will be achieved or occur. Moreover, neitherwe nor any other person assumes responsibility for the accuracy and completenessof the forward-looking statements. Except as required by law, we undertake noobligation to update publicly any forward-looking statements for any reasonafter the date of this report to conform these statements to actual results orto changes in our expectations.You should read this Quarterly Report on Form 10-Q and the documents that wereference in this Quarterly Report on Form 10-Q and have filed with the SEC asexhibits to this Quarterly Report on Form 10-Q with the understanding that ouractual future results, levels of activity, performance and events andcircumstances may be materially different from what we expect. We qualify allforward-looking statements by these cautionary statements.Overview and Recent HighlightsCareDx, Inc. (collectively, the "Company", "we", "us" and "our") is a leadingprecision medicine company focused on the discovery, development andcommercialization of clinically differentiated, high-value diagnostic solutionsfor transplant patients and caregivers. We offer testing services, products, anddigital healthcare solutions along the pre- and post-transplant patient journey,and we are a leading provider of genomics-based information for transplantpatients.Highlights for the Three Months Ended June 30, 2020 and Recent HighlightsAchieved total revenue of $41.8 million for the three months ended June 30,2020, increasing 33% year-over-yearProvided over 17,100 AlloSure Kidney and AlloMap Heart patient results, withover 40% originating from RemoTraC and mobile phlebotomyRecorded first-ever AlloCell revenue from a cell therapy partnershipCompleted successful public offering raising $134.6 million in net proceeds,increasing cash and cash equivalents to approximately $211.4 millionTesting ServicesHeart 26-------------------------------------------------------------------------------- Table of ContentsAlloMap Heart is a gene expression test that helps clinicians monitor andidentify heart transplant recipients with stable graft function who have a lowprobability of moderate-to-severe acute cellular rejection. Since 2008, we havesought to expand the adoption and utilization of our AlloMap Heart solutionthrough ongoing studies to substantiate the clinical utility and actionability,secure positive reimbursement decisions from large private and public payers,develop and enhance our relationships with key members of the transplantcommunity, including opinion leaders at major transplant centers, and exploreopportunities and technologies for the development of additional solutions forpost-transplant surveillance.We believe the use of AlloMap Heart, in conjunction with other clinicalindicators, can help healthcare providers and their patients better managelong-term care following a heart transplant, can improve patient care by helpinghealthcare providers avoid the use of unnecessary, invasive surveillancebiopsies and may help to determine the appropriate dosage levels ofimmunosuppressants. In 2008, AlloMap Heart received 510(k) clearance from theU.S. Food and Drug Administration for marketing and sale as a test to aid in theidentification of heart transplant recipients, who have a low probability ofmoderate/severe acute cellular rejection at the time of testing, in conjunctionwith standard clinical assessment.AlloMap Heart has been a covered service for Medicare beneficiaries sinceJanuary 1, 2006. The Medicare reimbursement rate for AlloMap Heart is currently$3,240. AlloMap Heart has also received positive coverage decisions forreimbursement from many of the largest U.S. private payers, including Aetna,Anthem, Cigna, Health Care Services Corporation, or HCSC, Humana, KaiserFoundation Health Plan, Inc. and UnitedHealthcare.We have also successfully completed a number of landmark clinical trials in thetransplant field demonstrating the clinical utility of AlloMap Heart forsurveillance of heart transplant recipients. We initially established theanalytical and clinical validity of AlloMap Heart on the basis of our CardiacAllograft Rejection Gene Expression Observational (Deng, M. et al., Am JTransplantation 2006), or CARGO, study, which was published in the AmericanJournal of Transplantation. A subsequent clinical utility trial, InvasiveMonitoring Attenuation through Gene Expression (Pham MX et al., N. Eng. J. Med.,2010), or IMAGE, published in The New England Journal of Medicine, demonstratedthat clinical outcomes in recipients managed with AlloMap Heart surveillancewere equivalent (non-inferior) to outcomes in recipients managed withbiopsies. The results of our clinical trials have also been presented at majormedical society congresses. AlloMap Heart is now recommended as part of theInternational Society for Heart and Lung Transplantation, or ISHLT, guidelines.HeartCareHeartCare includes the gene expression profiling technology of AlloMap Heartwith the dd-cfDNA analysis of AlloSure Heart in one surveillance solution. Anapproach to surveillance using HeartCare provides information from twocomplementary measures: (i) AlloMap Heart - a measure of immune activation, and(ii) AlloSure Heart - a measure of graft injury.Clinical validation data from the Donor-Derived Cell-Free DNA-Outcomes AlloMapRegistry (NCT02178943), or D-OAR, was published in American Journal ofTransplant, or AJT, in 2019. D-OAR was an observational, prospective,multicenter study to characterize the AlloSure-Heart dd-cfDNA in a routine,clinical surveillance setting with heart transplant recipients. The D-OAR studywas designed to validate that plasma levels of AlloSure-Heart dd-cfDNA candiscriminate acute rejection from no rejection, as determined by endomyocardialbiopsy criteria.HeartCare provides robust information about distinct biological processes, suchas immune quiescence, active injury, Acute Cellular Rejection, or ACR, andAntibody Mediated Rejection. In September 2018, we initiated the SHORE study.SHORE is a prospective, multi-center, observational, registry of patientsreceiving HeartCare for surveillance. Patients enrolled in SHORE will befollowed for 5 years with collection of clinical data and assessment of 5-yearoutcomes.In August 2019, AlloSure Heart received a positive draft Local CoverageDetermination for Medicare coverage. We have not yet made any applications toprivate payers for reimbursement coverage of AlloSure Heart.KidneyAlloSure Kidney, our transplant surveillance solution, which was commerciallylaunched in October 2017, is our donor-derived cell-free DNA, or dd-cfDNA,offering built on a Next Generation Sequencing, or NGS, platform. Intransplantation, 109 papers from 55 studies globally have shown the value ofdd-cfDNA in the management of solid organ transplantation. AlloSure allowssequencing of DNA and RNA much more quickly than the previously used Sangersequencing. AlloSure is able to discriminate dd-cfDNA from recipient-cell-freeDNA, targeting polymorphisms between donor and recipient. This single-nucleotidepolymorphism, or SNPs, approach across all the somatic chromosomes isspecifically designed for transplantation, allowing a scalable, high-qualitytest to differentiate dd-cfDNA.AlloSure Kidney has received positive coverage decisions for reimbursement fromMedicare. The Medicare reimbursement rate for AlloSure Kidney is $2,841.AlloSure Kidney has also received positive coverage decisions from BCBS SouthCarolina and BCBS Kansas City, and is reimbursed by other private payers on acase-by-case basis. 27-------------------------------------------------------------------------------- Table of ContentsMultiple studies have demonstrated that significant allograft injury can occurin the absence of changes in serum creatinine. Thus, clinicians have limitedability to detect injury early and intervene to prevent long term damage usingthis marker. While histologic analysis of the allograft biopsy specimen remainsthe standard method used to assess injury and differentiate rejection from otherinjury in kidney transplants, as an invasive test with complications, repetitivebiopsies are not well tolerated. AlloSure provides a non-invasive test,assessing allograft injury that enables more frequent, quantitative and saferassessment of allograft rejection and injury status. Beyond allograft rejection,the assessment of molecular inflammation has shown further utility in theassessment of proteinuria, formation of De Novo donor specific antibodies, orDSAs, and also as a surrogate predictive measure of estimated glomerularfiltration rate, or eGFR, decline. Monitoring of graft injury through AlloSureallows clinicians to optimize allograft biopsies, identify allograft injury andguide immunosuppression management more accurately.Since the analytical validation paper in the Journal of Molecular Diagnostics in2016 before the commercial launch of AlloSure Kidney, an increasing body ofevidence supports the use of AlloSure dd-cfDNA in the assessment andsurveillance of kidney transplants. Bloom et al evaluated 102 kidney recipientsand demonstrated that dd-cfDNA levels could discriminate accurately andnon-invasively distinguish rejection from other types of graft injury. Incontrast, serum creatinine has area under the curve, or AUC, of 50%, showing nosignificant difference between patients with and without rejection. Multiplepublications and abstracts have shown AlloSure's value in the management of BKviremia, as well as numerous pathologies that cause molecular inflammation andinjury such as DSAs and eGFR decline. Most recently its utility in theassessment of T-cell mediated rejection (TCMR) 1A and borderline rejection hasalso been published in the AJT.The prospective multicenter trial: Kidney Allograft Outcomes AlloSure KidneyRegistry, or the K-OAR study, is currently ongoing and has enrolled over 1,600patients, with plans to survey patients with AlloSure for 3 years and providefurther clinical utility of AlloSure Kidney in the surveillance of kidneytransplant recipients.KidneyCareKidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the geneexpression profiling technology of AlloMap Kidney and the predictive artificialintelligence technology of KidneyCare iBox in one surveillance solution. We havenot yet made any applications to payers for reimbursement coverage of AlloMapKidney or KidneyCare iBox.In September 2019, we announced the enrollment of the first patient in the OKRAstudy, which is an extension of the K-OAR study. OKRA is a prospective,multi-center, observational registry of patients receiving KidneyCare forsurveillance. Combined with K-OAR, 4,000 patients will be enrolled into thestudy.LungIn February 2019, AlloSure Lung became available for lung transplant patientsthrough a compassionate use program while the test is undergoing furtherstudies. AlloSure Lung applies proprietary NGS technology to measure dd-cfDNAfrom the donor lung in the recipient bloodstream to monitor graft injury. Wehave not yet made any applications to payers for reimbursement coverage ofAlloSure Lung.Cellular TherapyIn April 2020, we initiated a research partnership for AlloCell, a surveillancesolution that monitors the level of engraftment and persistence of allogeneiccells for patients who have received cell therapy transplants. AlloCell willinitially be commercialized through collaborative research agreements withbiopharma companies developing cell therapies.ProductsWe develop, manufacture, market and sell products that increase the chance ofsuccessful transplants by facilitating a better match between a solid organ orstem cell donor and a recipient, and help to provide post-transplantsurveillance of these recipients.QTYPE enables Human Leukocyte Antigen or HLA typing at a low to intermediateresolution for samples that require a fast turn-around-time and uses real-timepolymerase chain reaction, or PCR, methodology. Olerup SSP is used to type HLAalleles based on the sequence specific primer, or SSP, technology. Olerup SBT isa complete product range for sequence-based typing of HLA alleles.On May 4, 2018, we entered into a license agreement with Illumina, Inc., or theIllumina Agreement, which provides us with worldwide distribution, developmentand commercialization rights to Illumina's NGS products and technologies for usein transplantation diagnostic testing.On June 1, 2018, we became the exclusive worldwide distributor of Illumina'sTruSight HLA product line. TruSight HLA is a high-resolution solution that usesNGS methodology. In addition, we were granted the exclusive right to develop andcommercialize other NGS product lines in the field of bone marrow and solidorgan transplantation on diagnostic testing. These 28-------------------------------------------------------------------------------- Table of ContentsNGS products include: AlloSeq Tx, a high-resolution HLA typing solution, AlloSeqcfDNA, our surveillance solution designed to measure dd-cfDNA in blood to detectactive rejection in transplant recipients, and AlloSeq HCT, a NGS solution forchimerism testing for stem cell transplant recipients.In September 2019, we commercially launched AlloSeq cfDNA, our surveillancesolution designed to measure dd-cfDNA in blood to detect active rejection intransplant recipients, and we received CE mark approval on January 10, 2020. Ourability to increase the clinical uptake for AlloSeq cfDNA will be a result ofmultiple factors including local clinical education, customer lab technicalproficiency and levels of country-specific reimbursement.Also in September 2019, we commercially launched AlloSeq Tx, the first of itskind NGS high-resolution HLA typing solution utilizing hybrid capturetechnology. This technology enables the most comprehensive sequencing, coveringmore of the HLA genes than current solutions and adding coverage of non-HLAgenes that may impact transplant patient matching and management. AlloSeq Tx hassimple NGS workflow, with a single tube for processing and steps to reduceerrors. AlloSeq Tx 17 received CE mark approval on May 15, 2020.In June 2020, we commercially launched AlloSeq HCT, a NGS solution for chimerismtesting for stem cell transplant recipients. This technology can provide bettersensitivity and data analysis compared to current solutions on the market.DigitalIn 2019, we began providing digital solutions to transplant centers followingthe acquisition of Ottr Complete Transplant Management, or OttrCare, andXynManagement, Inc., or XynManagement.On May 7, 2019, we acquired 100% of the outstanding common stock of OttrCare.OttrCare was formed in 1993 and is a leading provider of transplant patienttracking software, or the Ottr software, which provides comprehensive solutionsfor transplant patient management. The Ottr software enables integration withelectronic medical records, systems, including Cerner and Epic, providingpatient surveillance management tools and outcomes data to transplant centers.On August 26, 2019, we acquired 100% of the outstanding common stock ofXynManagement. XynManagement provides two unique solutions, XynQAPI software, orXynQAPI, and Waitlist Management. XynQAPI simplifies transplant quality trackingand Scientific Registry of Transplant Recipients, or SRTR, reporting. WaitlistManagement includes a team of transplant assistants who maintain regular contactwith patients on the waitlist to help prepare for their transplant and maintaineligibility.COVID-19 ImpactIn the final weeks of March and during April 2020, with hospitals increasinglycaring for COVID-19 patients, hospital administrators chose to limit or evendefer, non-emergency procedures. Immunosuppressed transplant patients eitherself-prescribed or were asked to avoid transplant centers and caregiver visitsto reduce the risk of contracting COVID-19. As a result, with transplantsurveillance visits down, we experienced a slowdown in testing services volumesin the final weeks of March and during April 2020. As a response to the COVID-19pandemic, and to enable immune-compromised transplant patients to continue tohave their blood drawn, in late March 2020 we launched RemoTraC, a remotehome-based blood draw solution using mobile phlebotomy for AlloSure and AlloMapsurveillance tests, as well as for other standard monitoring tests. To date,more than 150 transplant centers can offer RemoTraC to their patients and over4,000 kidney, heart, and lung transplant patients have enrolled. Based onexisting and new relationships with partners, we have established a nationwidenetwork of more than 10,000 mobile phlebotomists. Following the introduction ofRemoTraC and with the easing of stay-at-home restrictions and the opening up ofmany hospitals to non-COVID-19 patients, our testing services volumes returnedto levels consistent with those experienced immediately prior to the impact ofCOVID-19, and volumes continued to be at or above those levels throughout May2020 and June 2020. However, our product business experienced a reduction inforecasted sales volume throughout the second quarter 2020, as we were unable toundertake onsite discussions and demonstrations of our recently launched NGSproducts, including AlloSeq Tx 17, which was awarded CE mark approval in May2020.We are maintaining our testing, manufacturing, and distribution facilities whileimplementing specific protocols to reduce contact among our employees. In areaswhere COVID-19 impacts healthcare operations, our field-based sales and clinicalsupport teams are supporting providers through telephone and online platforms.To reduce the risk to employees and their families from potential exposure toCOVID-19, most of our corporate employees have been asked to work from home. Wehave also restricted non-essential business travel to protect the health andsafety of its employees, patients, and customers. In addition, we have created aCOVID-19 task force that is responsible for crisis decision making, employeecommunications, enforcing pre-arrival temperature checking, daily healthcheck-ins and enhanced safety training/protocols in our offices for employeesthat cannot work from home.Due to COVID-19, quarantines, shelter-in-place and similar government orders, orthe perception that such orders, shutdowns or other restrictions on the conductof business operations could occur or could impact personnel at third-partysuppliers in the United States and other countries, or the availability or costof materials, there may be disruptions in our supply chain. Any 29-------------------------------------------------------------------------------- Table of Contentsmanufacturing supply interruption of materials could adversely affect ourability to conduct ongoing and future research and testing activities.In addition, our clinical studies may be affected by the COVID-19 pandemic.Clinical site initiation and patient enrollment may be delayed due toprioritization of hospital resources toward the COVID-19 pandemic. Some patientsmay not be able to comply with clinical study protocols if quarantines impedepatient movement or interrupt healthcare services. Similarly, the ability torecruit and retain patients and principal investigators and site staff who, ashealthcare providers, may have heightened exposure to COVID-19, may adverselyimpact our clinical trial operations.Financial Operations OverviewRevenueWe derive our revenue from testing services, products sales and digital andother revenues. Revenue is recorded considering a five-step revenue recognitionmodel that includes identifying the contract with a customer, identifying theperformance obligations in the contract, determining the transaction price,allocating the transaction price to the performance obligations and recognizingrevenue when, or as, an entity satisfies a performance obligation.Testing Services RevenueOur testing services revenue is derived from AlloSure Kidney and AlloMap Hearttests, which represented 87% and 84% of our total revenues for the three and sixmonths ended June 30, 2020, respectively, and 82% of our total revenues for eachof the three and six months ended June 30, 2019. Our testing services revenuedepends on a number of factors, including (i) the number of tests performed;(ii) establishment of coverage policies by third-party insurers and governmentpayers; (iii) our ability to collect from payers with whom we do not havepositive coverage determination, which often requires that we pursue acase-by-case appeals process; (iv) our ability to recognize revenues on testsbilled prior to the establishment of reimbursement policies, contracts orpayment histories; (v) our ability to expand into markets outside of the UnitedStates; and (vi) how quickly we can successfully commercialize new productofferings.We currently market testing services to healthcare providers through our directsales force that targets transplant centers and their physicians, coordinatorsand nurse practitioners. The healthcare providers that order the tests and onwhose behalf we provide our testing services are generally not responsible forthe payment of these services. Amounts received by us vary from payer to payerbased on each payer's internal coverage practices and policies. We generallybill third-party payers upon delivery of a test result report to the orderingphysician. As such, we take the assignment of benefits and the risk ofcollection from the third-party payer and individual patients.In April 2020, we announced our first biopharma research partnership forAlloCell, a surveillance solution that monitors the level of engraftment andpersistence of allogeneic cells for patients who have received cell therapytransplants. AlloCell will initially be commercialized through collaborativeresearch agreements with biopharma companies developing cell therapies.Product RevenueOur product revenue is derived primarily from sales of Olerup SSP, QTYPE,TruSight and AlloSeq Tx products. Product revenue represented 8% and 10% oftotal revenue for the three and six months ended June 30, 2020, respectively,and 15% and 16% of total revenue for the three and six months ended June 30,2019, respectively. We recognize product revenue from the sale of products toend-users, distributors and strategic partners when all revenue recognitioncriteria are satisfied. We generally have a contract or a purchase order from acustomer with the specified required terms of order, including the number ofproducts ordered. Transaction prices are determinable and products are deliveredand risk of loss passed to the customer upon either shipping or delivery, as perthe terms of the agreement. There are no further performance obligations relatedto a contract and revenue is recognized at the point of delivery consistent withthe terms of the contract or purchase order.Digital and Other RevenueOur digital and other revenue is mainly derived from sales of our Ottr softwareand XynQAPI licenses and services and other licensing agreements. Digital andother revenue represented 5% and 6% of total revenue for the three and sixmonths ended June 30, 2020, respectively, and 4% and 2% of total revenue for thethree and six months ended June 30, 2019, respectively.Critical Accounting Policies and Significant Judgments and EstimatesOur management's discussion and analysis of our financial condition and resultsof operations is based on our unaudited condensed consolidated financialstatements, which have been prepared in accordance with United States generallyaccepted accounting principles. The preparation of these unaudited condensedconsolidated financial statements requires us to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and the disclosure ofcontingent assets and liabilities at the date of the unaudited condensedconsolidated financial statements, as well as the reported revenue generated 30-------------------------------------------------------------------------------- Table of Contentsand expenses incurred during the reporting periods. Our estimates are based onour historical experience and on various other factors that we believe arereasonable under the circumstances, the results of which form the basis formaking judgments about the carrying value of assets and liabilities that are notreadily apparent from other sources. Actual results may differ from theseestimates under different assumptions or conditions.We believe that the following critical accounting policies reflect the moresignificant estimates and assumptions used in the preparation of our financialstatements. We believe the following critical accounting policies are affectedby significant judgments and estimates used in the preparation of our unauditedcondensed consolidated financial statements:Revenue recognition;Business combination;Acquired intangible assets;Impairment of goodwill, intangible assets and other long-lived assets; andCommon stock warrant liability.There were no material changes in the matters for which we make criticalaccounting estimates in the preparation of our unaudited condensed consolidatedfinancial statements during the three and six months ended June 30, 2020 ascompared to those disclosed in Management's Discussion and Analysis of FinancialCondition and Results of Operations included in our annual report on Form 10-Kfor the year ended December 31, 2019, except that there is no derivativeliability outstanding as of December 31, 2019 and June 30, 2020 and thedetermination of the estimated present value of lease payments using ourincremental borrowing rate as discussed in Note 2, Summary of SignificantAccounting Policies, in the unaudited condensed consolidated financialstatements included elsewhere in this Quarterly Report on Form 10-Q.Recently Issued Accounting StandardsRefer to Note 2, Summary of Significant Accounting Policies - Recent AccountingPronouncements, to the unaudited condensed consolidated financial statementsincluded elsewhere in this Quarterly Report on Form 10-Q for a description ofrecently issued accounting pronouncements, including the expected dates ofadoption and estimated effects on our results of operations, financial positionand cash flows. 31-------------------------------------------------------------------------------- Table of ContentsResults of OperationsComparison of the Three Months Ended June 30, 2020 and 2019(In thousands) Three Months Ended June 30, 2020 2019 ChangeRevenue:Testing services revenue $ 36,293$ 25,677$ 10,616Product revenue 3,291 4,593 (1,302)Digital and other revenue 2,217 1,184 1,033Total revenue 41,801 31,454 10,347Cost of revenue 15,025 11,512 3,513Gross profit 26,776 19,942 6,834Operating expenses:Research and development 13,129 7,630 5,499Sales and marketing 12,134 10,644 1,490General and administrative 12,316 8,512 3,804Total operating expenses 37,579 26,786 10,793Loss from operations (10,803) (6,844) (3,959)Other income (expense):Interest income, net 21 300 (279)
Change in estimated fair value of common stock warrant liability
Change in estimated fair value of common stock warrant liability
Effect of exchange rate changes on cash, cash equivalents and restricted cash
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CAREDX : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q) - marketscreener.com
