you, Reg. Thank
pleased with the close and quarterly share the financial I'll an of update the second quarter. results article billing address on from to impact We guidance. implementation, are results,
required continue momentum million one, third $XXX article, our results. work with for the the to are, quarter. reported quarter of XXX% activities. maintain in billing second the cash collections We over highlights position operational pleased number a was on excellent testing solid little cash Considering in implementation that are the using key two, services revenue consecutive Number of our of our operating maintain
quarters. collection us generate Our cash the incremental last in million helped X $XX have over in efforts
billing year-over-year, million, the of to $XX.X quarter compared article achieved and previous operation requirements. of of a in execution revenue due the to results strong decrease article. Number Reported X% the XX% as of four, billing impact
quarters rate million June, month five, adoption XX% $X.X and and strong representing over XX% continue overall our the initial non-testing X growth test Patient revenues Number $X our and in TRF business respectively. Digital for year-over-year kidney with of of million above products, growth services in for New climbed of of target. XX% XX% ahead and Solutions for
coverage for coverage Medicare of Lung we reestablished and received In addition, in HeartCare. beginning third the for quarter, the Medicare AlloSure
me Let down last details, $XX.X of as million, compared Reported was revenue for quarter's testing million. provide quarter the starting XX% with testing services services to revenue services. $XX.X testing second
you submit quarter not first X,XXX If we for did recall, of approximately the in claims 'XX,
for not did We those as tests kidney million. approximately the reimbursement representing tests Medicare test. to March refer AlloSure impacted and recognize revenue $X.X
tests or revenue these million planned, testing totaling in 'XX. As the submitted revenue impacted for tests, in first 'XX, these the to for payment second in approximately quarter the million $X.X $XX.X sequentially. XX% and we impacted March million quarter quarter as down revenue quarter second claims received the Adjusting services second in compared was reported March and for of of 'XX, of recognized the and first $XX.X the reimbursement
number Number And two, quarter. by three, mix not driven rate of The Number end was of yet expected new volume. by reduction supplemented one, tests of factors. X impact our TRFs. in the adoption the on a revenue primarily
testing Firstly, was Approximately the XX,XXX the kidney the to XX% XX% for approximately volumes, of was quarter second volume tests, declined on as reduction services. last reported from down services our testing compared volume in quarter.
Our impacted to billing more on surveillance kidney testing. was article due restrictions testing
in to we Noridian. when continue AlloSure Test reimbursement with line the AlloMap used Heart heart current coverage in Heart with bill from conjunction testing Our policy services, for
these some their In and adapt billing systems. and have pausing us challenging and addition, article multiple of and continually for clinicians ordering made revisions be IT to confusion forms, these multiple operationalized in transplant the tests. update to into in needed These centers then it changes resulted in the cases, for
that Medicare article. to of adoption Kidney and earnings information new it billing has would had turning bill supplementation. unless our AlloSure March effective 'XX, the date billing stated required previous XX, call, In by TRF we necessary after we not Now Test the as article of
adoption TRF provided for We lead kidney. indicators of also on new
month was XX% of target. to June, initial pleased the over adoption in new our quarter XX% the kidney of are for services and way We over ahead second that TRF report testing in our
claims, together pending revenue requiring the in the during implementation, pending supplementation an that Notably, still and tests of second efforts quarter the supplementation, rate XX% team a there's obtain opportunity. in have it is X a additional great portion these on initial that have tests has we dedicated on we not achieving success For over the put herculean provides Despite year upside in to we 'XX. recognized this and quarter. team been information second our of success of
Turning to gross margins. Testing Services
Our GAAP XX% margin gross compared testing as services was to XX% in the quarter. last
the the gross to services in to was services XX%, to gross testing in quarter. was testing associated were the non-GAAP volume margin XX%. $X.X Our as drop tests, by compared associated March would services testing impacted and improve over the driven and in the adjusted we XX% revenue be with gross margin drop in exclude we plan If margin coming revenues, quarters. last million The
was of given XX% $X We our Now a and business revenue drive quarter. turning in paying our other our business highest for and moat. are strategic Patient quarter, that the a area second million, year-over-year In Solutions and results our our financial Digital revenue off helping the and ever to believe strengthen our investments businesses. growth
business to Our was recent expand digital acquisition the company and XX% gross XX% procurement our as GAAP year in Digital chain transplant margin an Patient second MediGO, supply ago. and will market. organ the quarter, organization of Solutions footprint for further organ logistics in compared our a
as driving improve to our margin growth points gross CareDx's by by ago. margins to team's effort a in second effectively by integrating Non-GAAP Our XXX XX% quarter leadership margin the improved leveraging position basis in was year-over-year, acquisitions our to the same a testament non-GAAP gross and XX% quarter, compared year
transplantation. and capabilities in
increase margin year. million Products quarter gross our basis of XX% products second in was of the the as of last 'XX, improvement Non-GAAP to the business as quarter second last same GAAP in delivered in compared compared XXX quarter to in $X.X to gross XX% 'XX, in revenue a the same an second quarter XX%, year, in XX% an the of margin points. ago. business 'XX, of XX% was quarter products same quarter compared as the for year
calls, As the margin for products focus business discussed previous the core company. improving gross area for in a stays
We products. our size of some our are out aging consolidating phasing manufacturing and
that EBITDA. mitigate operating expenses Turning about down and for in quarter of financials. decrease the revisions million, in million to second the The $XX.X operating on from impact was we to were our our sequentially Non-GAAP operating by expenses adjusted the the non-GAAP our $X.X billing article actions QX driven expenses took 'XX.
expenses workforce expense prioritized reduction and the completed reduction. clinical QX driving our We studies, on and R&D in
over impact third the the these full quarter We see expect to carry for of impact. the quarter to measures in
Our though, revision. by driven pushing increased matters the expenses to article our various further, G&A legal response litigation billing the expenses, quarter-over-quarter, and higher
is start stay the assessment current fourth third 'XX elevated quarter to expenses the Our during that will during will legal and quarter onwards. normalize of
second recorded in of negative the of quarter quarter. the to adjusted negative compared $XX.X 'XX, million, million For previous adjusted EBITDA $X.X EBITDA of we
Turning to cash.
the profile, differentiated $X marketable $XX We cash was million. of maintain debt. robust continue securities of equivalents to operating financial than less balance activities a cash, and losses over used cash in EBITDA $XXX million despite for Net emphasized sheet quarter an and adjusted million by and as a no
working continued Our to our management be by superior and cash capital focus driven cash on management. collections
testing at customers. by the our For driven a our row, continued collections revenue, above from in XXX% increase third quarter commercial came our collections of services in in
to in of interest incremental key in area the million more this last we note also as from focus, in continue quarter work We cash to income in collections a earned the like second area. have of in we opportunities through now $XX I and generated remains over 'XX. $X.X million quarters, would this that X
on mitigating article second the and are financial billing article impact on In made second of were and on we the implementation revisions progress teams front. Turning topic 'XX, our plans. with we very focused around pleased billing this of operational our of quarter to our revisions, the the primarily the
starting Let provide testing services. kidney some me colors, with
trends, on TRF information downside article revisions required billing through combination the of thus for necessary new limiting earlier, based AlloSure for tests discussed June ordering, risks. approximately a as Kidney and by reasons As the have the supplementation of adoption now XX%
for not change to HeartCare as relates it no reestablished it there As has Moreover, path our is it topic. earlier, been note impact material revenues mentioned billing this to and testing, important practices, around does that of uncertainty coverage quarter our heart 'XX. the multimodality Reg clears since of in for second removes the the
to our Turning article. response the impact on of financial billing the
First our on cost structure. adjusting
call, $XX As glad discussed annualized we million to earnings you I'm to savings. to that on $XX know approximately track in million our let last drive are in
excluding completed have any XX% impact the what of the workforce reduction achieved had in acquisitions. We our the a compared headcount, of reduction year, as and in to we beginning
reprioritized impact We our R&D have our projects expenses. the to started spend see and on and
of to our cost the the now Impact We the meet resources reflected meet are administrative of testing reallocating resources of is instead billing of reduction requirements in burden the adding to additional volume article. services.
However, the including from is to actions. our stated article response as partially due savings offsetting matters, to legal the our our legal expenses earlier, multiple billing
'XX. normalize we earlier, As to during anticipate start will fourth stated quarter legal expenses of
and specifically our earlier, Second, driving XC's our calculus. driving as testing on focused services pipeline in business on we alluded advancing coverage strategy based and Reg commercial growth are
our in specific as and continue such efforts more drive our overdue collections, and payments further collections are areas to of revenues. given our Medicaid commercial we Third, expanding to to ahead success,
long-term and balance thoughtful need on are growth we Finally, action. to cost-saving being for investments the
we appropriately evaluate more continue respond clarity. will and We'll to as gain
cash to Our become goal and be minimize EBITDA continues adjusted burn to positive.
discuss our guidance the year. me let for Finally,
There in to been updated 'XX coming to $XXX billing $XXX revisions issuing million. guidance months. million the the are We clearer considerable for due uncertainty likely in the and article revenue has to become
and Our costs. the its the post impact HeartCare, for guidance assumes limiting of XX following. of one, Number use coverage months potential re-established
newly two, article. systems billing of established ensure the implementation meet the coverage to operational of and Number requirement processes
#X, billing Number article. revisions Number revisions Lung three, from but the low article. to from a as our is services but the in not AlloSure some of including the assumes around least, impact post uncertainty last it four, not of the volume billing Noridian limited the the end the to settling uncertain response testing guidance coverage. Medicare variables, still
with But QX be testing anticipate for We Noridian on is to when subsequent to billing point adopts low services also quarters. return growth a the article partially potential quarter the revenue in this revision. 'XX dependent in
AlloSure summary, the for article. of we requirements commercial great Lung, In We operational of coverage a the second HeartCare, based and billing have for received quarter strong the Medicare coverage. improved on implementation had coverage Medicare re-established
driving have on necessary We cost structure growth. focusing adjust taken steps long-term our to and
I the be forward. do stays entire position with cash, cash the strong not cannot financial need we operational excellence team proud of cash $XXX in foreseeable and and organization by demonstrated to a in million the Our discipline more raise see the driving in future.
With hand that, I'll over to Reg.
