QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
Commission file number 001-39482
GeneDx Holdings Corp.
(Exact name of registrant as specified in its charter)
Delaware
85-1966622
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
333 Ludlow Street, North Tower; 6th Floor
Stamford, Connecticut06902
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (888) 729-1206
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A common stock, par value $0.0001 per share
WGS
The Nasdaq Stock Market LLC
Warrants to purchase one share of Class A common stock, each at an exercise price of $379.50 per share
WGSWW
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yesx No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesx No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
o
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The registrant had 29,688,027 shares of Class A common stock, par value $0.0001, outstanding at May 1, 2026.
Certain matters discussed in this report, including matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “anticipate,” “believe,” “estimate,” “may,” “expect” and similar expressions are generally intended to identify forward-looking statements. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report, as well as other factors which may be identified from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), or in the documents where such forward-looking statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about:
•our estimates of the sufficiency of our existing capital resources combined with future anticipated cash flows and future capital requirements to finance our operating requirements, and capital expenditures;
•our expectations for generating revenue, incurring losses, and profitability on a sustained basis;
•unforeseen circumstances or other disruptions to normal business operations arising from general economic and political conditions such as recessions, fluctuating inflation, interest rates and tariff rates, government budget cuts and government shut downs, supply chain interruptions, manufacturing constraints, public health emergencies, natural disasters, armed conflict, acts of terrorism or other uncontrollable events;
•our ability to successfully implement our business strategy;
•our expectations or ability to enter into service, collaboration and other partnership agreements;
•our expectations or ability to build our own commercial infrastructure to scale, market and sell our products;
•our expectations about the reliability, accuracy or performance of our tests;
•our estimates of the total addressable market for our current and potential product offerings;
•our ability to realize the expected benefits of our acquisition of Fabric Genomics, Inc. (“Fabric Genomics”) and the use of artificial intelligence (“AI”);
•actions or authorizations by the U.S. Food and Drug Administration (“FDA”), or other regulatory authorities;
•risks related to governmental regulation and other legal obligations, including privacy, data protection, information security, consumer protection, and anti-corruption and anti-bribery;
•our ability to obtain and maintain intellectual property protection for our product candidates;
•our ability to compete against existing and emerging technologies;
•third-party payor reimbursement and coverage decisions, negotiations and settlements;
•our reliance on third-party service providers for our data programs;
•our accounting estimates and judgments, including our expectations regarding the adequacy of our reserves for third party payor claims, and the fair value of the contingent consideration liability and our conclusions regarding the appropriateness of the carrying value of intangible assets and goodwill for the Fabric Genomics acquisition;
•our stock price and its volatility; and
•our ability to attract and retain key personnel.
The forward-looking statements contained in this report reflect our views and assumptions only as of the date that this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements.
We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
(in thousands, except share and per share amounts)
March 31, 2026 (Unaudited)
December 31, 2025
Assets:
Current assets:
Cash and cash equivalents
$
93,924
$
104,997
Marketable securities
76,761
66,285
Accounts receivable
76,929
74,370
Inventory, net
12,241
13,951
Prepaid expenses and other current assets
10,774
8,685
Total current assets
270,629
268,288
Operating lease right-of-use assets
34,653
23,412
Property and equipment, net
50,125
45,693
Goodwill
1,641
13,520
Intangible assets, net
144,969
168,481
Other assets
4,284
4,316
Total assets
$
506,301
$
523,710
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable and accrued expenses
$
46,562
$
57,645
Short-term lease liabilities
5,129
4,404
Other current liabilities
35,948
46,859
Total current liabilities
87,639
108,908
Long-term debt, net of current portion
96,732
48,176
Long-term lease liabilities
66,331
56,046
Other liabilities
71
1,641
Deferred taxes
1,404
757
Total liabilities
252,177
215,528
Purchase commitments and contingencies (Note 9)
Stockholders’ Equity:
Preferred Stock, $0.0001 par value: 1,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively
—
—
Class A common stock, $0.0001 par value: 1,000,000,000 shares authorized, 29,666,318 and 29,245,296 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively
3
3
Additional paid-in capital
1,690,249
1,680,738
Accumulated deficit
(1,436,811)
(1,373,495)
Accumulated other comprehensive income
683
936
Total stockholders’ equity
254,124
308,182
Total liabilities and stockholders’ equity
$
506,301
$
523,710
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Organization and Description of Business
GeneDx Holdings Corp., through its subsidiary GeneDx, LLC, is a leading genomics company—one that sits at the intersection of diagnostics and data science, pairing decades of genomic expertise with an ability to interpret clinical data at scale. The Company believes that everyone deserves personalized, targeted medical care—and that it all begins with a genetic diagnosis. Fueled by one of the world’s largest rare disease data sets, the Company’s industry-leading exome and genome tests translate complex genomic data into clinical answers that unlock personalized health plans, accelerate drug discovery, and improve health system efficiencies. The Company operates with conviction that what is best for patients must be embedded in every aspect of our work. In support of these beliefs, we value equitability, simplicity and transparency.
Unless otherwise stated herein or unless the context otherwise requires, references in these notes to:
•“GeneDx Holdings” refer to GeneDx Holdings Corp., a Delaware corporation;
•“Legacy GeneDx” refer to GeneDx, LLC, a Delaware limited liability company, which we acquired on April 29, 2022 (the “Acquisition”);
•“Legacy Sema4” refer to Sema4 OpCo Inc., a Delaware corporation, which consummated the business combination with CM Life Sciences, Inc. (“CMLS”) on July 22, 2021 (the “Business Combination”);
•“Fabric Genomics” refer to Fabric Genomics, Inc., a Delaware Corporation, which we acquired on May 5, 2025 (the “Merger”); and
•“we,” “us” and “our,” the “Company” and “GeneDx” refer, as the context requires, to GeneDx Holdings and its consolidated subsidiaries.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the accounting disclosure rules and regulations of the SEC regarding interim financial reporting. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP. These condensed financial statements consolidate the operations and accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Unless otherwise noted, all tabular dollars are in thousands, except per share amounts. Certain reclassifications have been made to the prior year condensed consolidated financial statements in order to conform to the current year’s presentation.
In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair statement of the financial position and the results of operations of the Company for the interim periods presented. Interim results are not necessarily indicative of the results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 23, 2026 (the “2025 Form 10-K”).
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. The Company bases these estimates on current facts, historical and anticipated results, trends and various other assumptions that it believes are reasonable in the circumstances, including assumptions as to future events. These estimates include, but are not limited to, the transaction price for certain contracts with customers, potential or actual claims for recoupment from third-party payors, the valuation of stock-based awards, the valuation of financial liabilities, the valuation of goodwill and intangible assets, and income taxes. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates, judgments and assumptions.
The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the 2025 Form 10-K. Except as disclosed below, there have been no material changes to the Company’s critical accounting policies and estimates in the current period.
Capitalized Software
The Company capitalizes certain costs incurred to develop internal-use software. Capitalization begins when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating the probability of completion, the Company considers whether significant development uncertainty exists, including whether the software contains novel or unproven functions that have not been resolved through testing or whether significant performance requirements remain substantially undefined.
Costs incurred prior to meeting these capitalization criteria, as well as costs for training and maintenance, are expensed as incurred. Capitalization ceases when the software project is substantially complete and ready for its intended use. Capitalized software costs are amortized using the straight-line method over an estimated useful life of three to five years. The Company reviews capitalized software for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
See Note 5, “Property and Equipment, net” for more information.
Concentration of Credit Risk
The Company assesses both the self-pay patient and, if applicable, the third-party payor groups that reimburses the Company on the patient’s behalf when evaluating concentration of credit risk. Significant patients and payor groups are those that represent more than 10% of the Company’s total revenues for the period or accounts receivable balance at each respective balance sheet date. The significant concentrations of accounts receivable as of March 31, 2026 and December 31, 2025 were primarily from large managed care insurance companies, institutional billed accounts, and data arrangements. The Company does not require collateral as a means to mitigate customer credit risk.
For each significant payor group, revenue as a percentage of total revenues and accounts receivable as a percentage of total accounts receivable are as follows:
Revenue
Accounts Receivable
Three months ended March 31,
March 31,
December 31,
2026
2025
2026
2025
Payor group A(1)
26%
24%
21%
18%
Payor group B(1)
31%
32%
26%
27%
(1)The significant payor groups identified in the table above represent multiple payors aggregated based on similar contract terms and reimbursement patterns. No single payor or individual client accounted for more than 10% of revenue or receivables for the current period.
The Company is subject to a concentration of risk from a limited number of suppliers for certain reagents, laboratory equipment and laboratory supplies. One supplier accounted for approximately 31% and 25% for the three months ended March 31, 2026 and 2025, respectively. This risk is managed by maintaining a target quantity of surplus stock. Alternative suppliers are available for the majority of these reagents and supplies.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The standard requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. As revised by the issuance of ASU 2025-01, Disaggregation of Income Statement Expenses: Clarifying the Effective Date (“ASU 2025-01”) in January 2025, the provisions of ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). The standard addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental
improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2025-12 on its consolidated financial statements and related disclosures.
Recently Adopted Accounting Pronouncements
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (“ASU 2025-06”). The standard establishes targeted enhancements to Subtopic 350-40 improving the operability of the recognition guidance considering different methods of software development. The update is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company early adopted this pronouncement on a prospective basis effective January 1, 2026, and the adoption did not have a material impact on its condensed consolidated financial statements and related disclosures.
3. Revenue Recognition
Disaggregated Revenue
The following table summarizes the Company’s disaggregated revenue by payor category:
Three months ended March 31,
2026
2025
GeneDx
Other(1)
Total
GeneDx
Other(1)
Total
Diagnostic test revenue:
Patients with third-party insurance
$
84,919
$
—
$
84,919
$
68,059
$
—
$
68,059
Institutional customers
15,528
566
16,094
17,604
—
17,604
Self-pay patients
286
—
286
96
—
96
Total diagnostic test revenue
100,733
566
101,299
85,759
—
85,759
Other revenue
763
192
955
1,356
—
1,356
Total
$
101,496
$
758
$
102,254
$
87,115
$
—
$
87,115
(1)For the three months ended March 31, 2026, Other represents revenues of the Fabric Genomics and Legacy Sema4 operating segments. For the three months ended March 31, 2025, Other represents revenues associated with the Legacy Sema4 operating segment. See Note 14, “Segment Reporting” for more information.
Reassessment of Variable Consideration
Subsequent changes to the estimate of the transaction price, determined on a portfolio basis when applicable, are generally recorded as adjustments to revenue in the period of the change. The Company updates estimated variable consideration quarterly.
For the three months ended March 31, 2026 and 2025, the total change in estimate resulted in a net increase to revenue of $5.6 million and $6.9 million, respectively, resulting from changes in the estimated transaction price due to contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligations were met, and potential and actual settlements with third party payors. The change in estimate also included an increase in revenue related to the release of a previously established payor reserve, as further disclosed in the “Certain Payor Matters” section below.
Certain Payor Matters
As noted above, third-party payors, including government programs, may decide to deny payment or seek to recoup payments for tests performed by the Company that they contend were improperly billed, not medically necessary or against their coverage determinations, or for which they believe they have otherwise overpaid, including as a result of their own error. As a result, the Company may be required to refund payments already received, and the Company’s revenues may be subject to retroactive adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance, and changes by government agencies and payors in interpretations, requirements, policies and/or “conditions of participation” in various programs. The Company processes requests for recoupment from third-party payors in the ordinary course of its business, and it is likely that the Company will continue to do so in the future. If a third-party payor denies payment
for testing or recoups money from the Company in a later period, reimbursement and the associated recognition of revenue for the Company’s testing services could decline.
From time to time, the Company may have an obligation to reimburse Medicare, Medicaid, and third-party payors for overpayments regardless of fault. Settlements with third-party payors for retroactive adjustments due to audits, reviews, or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing services. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor, the Company’s historical settlement activity (if any), and the Company’s assessment of the probability a significant reversal of cumulative revenue recognized will occur when the uncertainty is subsequently resolved. Estimated settlements are adjusted in future periods as such adjustments become known (that is, if new information becomes available), or as years are settled or are no longer subject to such audits, reviews, and investigations.
As of March 31, 2026 and December 31, 2025, the Company’s third-party payor reserves were $6.0 million and $5.0 million, respectively, and were recorded in accounts payable and accrued expenses and other liabilities, respectively, in the condensed consolidated balance sheets. Included in these reserve balances is a $2.0 million scheduled payment to settle the claims related to coverage and billing matters allegedly resulting in the overpayments by a third-party payor to Legacy Sema4 (the “Disputed Claims”), which is due in June 2026.
4. Fair Value Measurements
The following tables set forth the fair value of financial instruments that were measured at fair value on a recurring basis:
March 31, 2026
Total
Level 1
Level 2
Level 3
Financial Assets:
Money market funds
$
85,992
$
85,992
$
—
$
—
U.S. treasury bonds
37,103
—
37,103
—
Corporate and municipal bonds
39,289
—
39,289
—
Total financial assets
$
162,384
$
85,992
$
76,392
$
—
Financial Liabilities:
Public warrant liability
$
151
$
151
$
—
$
—
Private warrant liability
69
—
69
—
Total financial liabilities
$
220
$
151
$
69
$
—
December 31, 2025
Total
Level 1
Level 2
Level 3
Financial Assets:
Money market funds
$
85,381
$
85,381
$
—
$
—
U.S. treasury bonds
32,079
—
32,079
—
Corporate and municipal bonds
33,854
—
33,854
—
Total financial assets
$
151,314
$
85,381
$
65,933
$
—
Financial Liabilities:
Public warrant liability
$
755
$
755
$
—
$
—
Private warrant liability
345
—
345
—
Contingent consideration
1,570
—
—
1,570
Total financial liabilities
$
2,670
$
755
$
345
$
1,570
There were no transfers between Level 1, Level 2 and Level 3 during the three months ended March 31, 2026 and 2025.
The Company’s financial assets include investments in money market funds, U.S. treasury bonds, and corporate and municipal bonds. Investments in money market funds are classified within Level 1 of the fair value hierarchy as they are based on quoted prices in active markets. Investments in U.S. treasury bonds and corporate and municipal bonds are classified within Level 2 of
the fair value hierarchy as they are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets.
The Company’s marketable securities presented in the condensed consolidated balance sheet as of March 31, 2026 have maturity dates ranging from 2026 through 2028 and are classified as current assets as these investments are intended to be readily available to fund current operations. The differences between the fair value and amortized cost basis of each security are the unrealized gains or losses recorded in accumulated other comprehensive income. As of March 31, 2026, the amortized cost for maturities less than one year and greater than one year were $39.0 million and $36.7 million, respectively.
Public and Private Warrants
As of the consummation of the merger in July 2021 in connection with the Business Combination, there were 666,516 warrants to purchase shares of Class A common stock outstanding, including 447,223 public warrants and 219,293 private placement warrants. As of March 31, 2026, there were 666,515 warrants to purchase shares of Class A common stock outstanding, including 457,323 public warrants and 209,192 private placement warrants outstanding. Each warrant expires five years after the Business Combination or earlier upon redemption or liquidation, and entitles the holder to purchase one share of Class A common stock at an exercise price of $379.50 per share, subject to adjustment, at any time commencing on September 4, 2021.
The Company may redeem the outstanding public warrants if the price per share of the Class A common stock equals or exceeds $594.00 as described below:
•in whole and not in part;
•at a price of $0.33 per public warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the closing price of the Class A common stock equals or exceeds $594.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before sending the notice of redemption to warrant holders.
The Company may redeem the outstanding warrants if the price per share of the Class A common stock equals or exceeds $330.00 as described below:
•in whole and not in part;
•at $3.30 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A common stock;
•if, and only if, the closing price of the Class A common stock equals or exceeds $330.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
•if the closing price of the Class A common stock for any 20 trading days within a 30-trading day period ending three trading days before the Company sends notice of redemption to the warrant holders is less than $594.00 per share (as adjusted), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
The private placement warrants were issued to CMLS Holdings, LLC, Mr. Munib Islam, Dr. Emily Leproust, and Mr. Nat Turner, and are identical to the public warrants underlying the units sold in the initial public offering, except that (1) the private placement warrants and the Class A common stock issuable upon the exercise of the private placement warrants would not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (2) the private placement warrants are exercisable on a cashless basis, (3) the private placement warrants are non-redeemable (except as described above, upon a redemption of warrants when the price per share of Class A common stock equals or exceeds $330.00) so long as they are held by the initial purchasers or their permitted transferees, and (4) the holders of the private placement warrants and the Class A common stock issuable upon the exercise of the private placement warrants have certain registration rights. If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.
The public warrants are classified within Level 1 of the fair value hierarchy as they are traded in active markets and the fair value is determined on the basis of quoted market prices. The private placement warrants are classified within Level 2 of the fair value hierarchy as management determined the fair value of each private placement warrant is the same as that of a public warrant because the terms are substantially the same.
For the three months ended March 31, 2026, a gain of $0.9 million was recorded within the change in fair value of financial liabilities in the condensed consolidated statements of operations and comprehensive loss. The change in fair value of the warrants for the three months ended March 31, 2025 was a loss of $1.1 million.
Contingent Consideration (Fabric Genomics)
Pursuant to the Merger Agreement, the Company agreed to pay up to (i) $10.5 million in cash, shares of Class A common stock or a combination thereof, as determined by the Company in its sole discretion, on or prior to April 30, 2026 subject to Fabric Genomics achieving gross revenue equal to or above $6.0 million and a gross margin equal to or above 69% for the fiscal year ending December 31, 2025 (the “First Milestone Payment”), with the amount of the First Milestone Payment determined by multiplying $7.0 million by the quotient obtained by dividing Fabric Genomics’ gross revenue for the fiscal year ending December 31, 2025 by $8.0 million, and (ii) $7.5 million in cash, shares of Class A common stock or a combination thereof, as determined by the Company in its sole discretion, on or prior to April 30, 2027 subject to Fabric Genomics achieving gross revenue equal to or above $9.0 million and a gross margin equal to or above 69% for the fiscal year ending December 31, 2026 (the “Second Milestone Payment” and, together with the First Milestone Payment, the “Milestone Payments”), with the amount of the Second Milestone Payment determined by multiplying $5.0 million by the quotient obtained by dividing Fabric Genomics’ gross revenue for the fiscal year ending December 31, 2026 by $12.0 million. The shares of Class A common stock issued, if any, pursuant to the Milestone Payments are referred to as the “Milestone Shares.” Any Milestone Shares that are issued will be valued at $93.0318 per share based on the average of the daily volume average weighted price of the Class A common stock over the period of 30 trading days ended April 11, 2025.
The measurement period for the First Milestone Payment was completed on December 31, 2025, and the Company determined the amount of the liability based on the gross revenue and gross margin achieved by Fabric Genomics for the year ended December 31, 2025. As of March 31, 2026 and December 31, 2025, the amount reported for the First Milestone payment in the condensed consolidated balance sheets was $5.4 million.
The fair value of the Second Milestone Payment was determined based on a Monte Carlo simulation valuation model, and is categorized as Level 3 of the fair value hierarchy as the Company utilizes unobservable inputs in estimating the fair value. Estimates and assumptions utilized in the Monte Carlo simulation model include risk-adjusted forecasted revenue and gross margin, revenue and gross profit volatility rates, expected stock price volatility, and discount rates which are based on the cost of debt and equity.
The following table summarizes the Level 3 inputs used in the valuation of the contingent consideration:
March 31, 2026
As of
December 31, 2025
Discount rate
3.7%
3.5%
Expected term (in years)
1.1
1.3
Equity volatility
73.0%
85.0%
Revenue volatility
10.0%
12.5%
Gross margin volatility
20.0%
30.0%
As of March 31, 2026 and December 31, 2025, the amount of contingent consideration reported in the condensed consolidated balance sheets for the Second Milestone Payment was zero and $1.6 million, respectively. During the three months ended March 31, 2026, a gain of $1.6 million was recorded within the change in fair value of financial liabilities in the condensed consolidated statements of operations and comprehensive loss.
Property and equipment, net consisted of the following:
March 31, 2026
December 31, 2025
Laboratory equipment
$
34,115
$
32,197
Leasehold improvements
14,802
14,802
Computer equipment
12,653
10,951
Building under finance lease
4,529
4,529
Equipment under finance leases
689
689
Furniture, fixtures and other equipment
614
595
Construction in-progress
11,012
7,447
Total property and equipment
78,414
71,210
Less: accumulated depreciation and amortization
(28,289)
(25,517)
Property and equipment, net
$
50,125
$
45,693
For the three months ended March 31, 2026 and 2025, depreciation and amortization expense was $2.7 million and $2.2 million, respectively.
Depreciation and amortization expense is included within the condensed consolidated statements of operations and comprehensive loss as follows:
Three months ended March 31,
2026
2025
Cost of services
$
1,462
$
1,075
Research and development
224
372
Selling, general and administrative
1,019
725
Total depreciation and amortization expense
$
2,705
$
2,172
6. Goodwill and Intangible Assets
The change in the carrying amount of goodwill during the three months ended March 31, 2026 was as follows:
Balance at December 31, 2025
$
13,520
Impairment charges
(11,879)
Balance at March 31, 2026
$
1,641
During the first quarter of 2026, the Company concluded that a triggering event had occurred during the period for the goodwill associated with the Fabric Genomics reporting unit primarily due to a downward revision of forecasted cash flows driven by changes in commercial strategy and go-to-market execution, and lower revenue and profitability expectations.
The Company performed a quantitative analysis as of March 31, 2026 to determine the fair value of the Fabric Genomics reporting unit. The fair value was determined through estimating the reporting unit’s discounted future cash flows expected to be generated. Significant assumptions utilized in the valuation include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable market multiples. Based on the quantitative analysis, the Company concluded that the reporting unit’s carrying value was greater than the fair value and recorded a non-cash impairment charge of $11.9 million.
The following table reflects, as of March 31, 2026, the carrying values and remaining useful lives of acquired intangible assets:
Gross Carrying Amount
Accumulated Amortization
Accumulated Impairment
Net Carrying Value
Weighted-Average Amortization Period (Years)
Tradenames and trademarks
$
54,500
$
(12,514)
$
(4,225)
$
37,761
12.1
Developed technology
62,900
(25,018)
(10,182)
27,700
4.5
Customer relationships
104,100
(19,591)
(5,001)
79,508
16.1
$
221,500
$
(57,123)
$
(19,408)
$
144,969
12.8
Amortization expense for intangible assets was $4.1 million and $3.5 million for the three months ended March 31, 2026 and 2025, respectively, and was recorded in selling, general and administrative expenses within the condensed consolidated statements of operations and comprehensive loss.
During the first quarter of 2026, in connection with the triggering event described above, the Company evaluated the recoverability of the long-lived assets associated with the Fabric Genomics reporting unit. The Company compared the carrying value of the asset group to the sum of its undiscounted cash flows. The Company determined that the carrying value of the asset group was not recoverable, and therefore, the asset group failed the recoverability test under ASC 360.
The Company determined that the carrying value of the tradenames and trademarks intangible asset was not recoverable and had no remaining fair value, which resulted in a non-cash impairment charge of $4.2 million. The Company then estimated the fair value of the developed technology and customer relationship intangible assets, using the multi-period excess earnings method. Based on this analysis, the Company concluded that each respective intangible asset’s carrying value was greater than the fair value. Accordingly, the Company recorded non-cash impairment charges of $10.2 million and $5.0 million, respectively, to reduce the carrying value of the developed technology and customer relationships intangible assets to their respective estimated fair values.
7. Related Party Transactions
Related party expenses include the purchase of diagnostic testing kits and lab materials from Twist Biosciences (“Twist”). Transactions with Twist are at arm’s length and represent market rates. The Company incurred $2.0 and $2.5 million in purchases, and $1.8 and $1.9 million was recorded in cost of services in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, respectively. Payables due as of March 31, 2026 and December 31, 2025 were $0.8 million and $0.6 million, respectively.
8. Long-Term Debt
As of March 31, 2026, long-term debt matures as follows:
Term Loan due 2031
$
100,000
Less: debt issuance costs
(3,268)
Total long-term debt, net of debt issuance costs
$
96,732
Blackstone Loan Agreement
On February 27, 2026 (the “Signing Date”), the Company entered into a Loan Agreement (the “Loan Agreement”), among Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C. (collectively referred to herein as “Blackstone”), certain subsidiaries of the Company party thereto as guarantors (collectively, the “Guarantors”), Wilmington Trust, National Association, as Agent and the lenders from time to time party thereto (collectively, the “Lenders”).
The Loan Agreement provides for a term loan in an aggregate principal amount of $100.0 million (the “Term Loan”), which was funded to the Company on February 27, 2026 (the “Closing Date”). The Term Loan bears interest at a rate equal to the Term SOFR adjusted secured overnight financing rate plus a margin of 4.50%. The Term Loan includes a SOFR floor of 1.50%. If an event of default occurs and is continuing, all amounts outstanding under the Loan Agreement will bear additional interest at a per annum rate equal to 2.00% plus the rate otherwise applicable to the Term Loan. The Term Loan will mature and the principal amount (including any interest and fees) must be repaid on the date that is five years from the Closing Date. The Term Loan is subject to mandatory prepayment provisions that may require prepayment upon a change of control, the incurrence of certain additional indebtedness, certain asset sales, or an event of loss, subject to certain conditions set forth in the Loan Agreement. The Company may prepay the Term Loan in whole or in part at its option at any time. Any prepayment of the Term Loan is subject to
certain yield protection premiums. The Company’s net proceeds from the Term Loan were $97.0 million, after deducting debt issuance costs and expenses.
The obligations under the Loan Agreement are guaranteed by the Guarantors and secured by a first lien security interest in substantially all assets of the Company and Guarantors. The Loan Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to the Company and the Guarantors. The Loan Agreement also contains a minimum liquidity covenant of $50.0 million effective following the Closing Date. If an event of default occurs and is continuing, the Lenders may declare all amounts outstanding under the Loan Agreement to be immediately due and payable.
Perceptive Term Loan Facility
On February 27, 2026, the Company repaid in full all outstanding obligations under its Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings IV, LP. The aggregate payoff amount of approximately $54.5 million included: (i) $50.0 million of outstanding principal, (ii) a prepayment premium of $4.0 million, and (iii) remaining accrued interest, legal and administrative fees of $0.5 million. Upon the receipt of the payoff amount, the Credit Agreement was terminated, and all security interests and liens on the Company’s assets were released.
For the three months ended March 31, 2026, the Company expensed $6.6 million to write off the prepayment premium and all remaining unamortized deferred financing fees associated with the Credit Agreement and reported these aggregate charges as a loss on extinguishment of debt within the condensed consolidated statement of operations.
Connecticut Department of Economic and Community Development Funding Commitment
During the first quarter of 2026, the Company reached an agreement with the Connecticut Department of Economic and Community Development (“DECD”) and repaid the remaining outstanding balance associated with the loan funding commitment from the DECD to the Company (the “DECD Loan Agreement”), which totaled $4.5 million. Upon the receipt of the payoff amount, the DECD Loan Agreement was terminated, and all security interests and liens on the Company’s assets were released.
9. Purchase Commitments and Contingencies
Purchase Commitments
The following sets forth purchase commitments with software and equipment providers as of March 31, 2026 with a remaining term of at least one year:
2026 (remainder of year)
$
11,627
2027
12,905
2028
4,051
2029
3,914
2030
978
Total purchase commitments
$
33,475
The Company enters into contracts with suppliers to purchase materials needed for diagnostic testing. These contracts generally do not require multi-year purchase commitments.
Leases
Except as disclosed below, there have been no material changes to the lease obligations from those disclosed in Note 10, “Leases” to the consolidated financial statements included in the 2025 Form 10-K.
In the first quarter of 2026, the Company entered into a sublease agreement for a laboratory space located in Gaithersburg, Maryland. The lease term extends through 2033 and the total minimum lease payments under the agreement are approximately $16.3 million over the lease term. As of March 31, 2026, the Company recognized a right-of-use asset and lease liability on the condensed consolidated balance sheet.
Contingencies
The Company is or may become subject to various claims and legal actions arising in the ordinary course of business. The Company does not believe that the outcome of any existing matters will have a material effect on the Company’s condensed
consolidated financial statements. However, no assurance can be given that the ultimate resolution of such proceedings will not materially impact the Company’s condensed consolidated financial statements.
Except as described below, the Company was not a party to any material legal proceedings as of March 31, 2026, nor is it a party to any material legal proceedings as of the date of issuance of these condensed consolidated financial statements.
Helo Putative Class Action
On September 7, 2022, a putative securities class action lawsuit was filed in the United States District Court for the District of Connecticut, styled Helo v. Sema4 Holdings Corp., et al., 3:22-cv-01131 (D. Conn.) against the Company and certain of the Company’s current and former officers. Following the appointment of a lead plaintiff, an amended complaint was filed on January 30, 2023. The defendants moved to dismiss the amended complaint on August 21, 2023, and that motion was granted on July 31, 2024. A second amended complaint was filed on September 13, 2024. As amended, the complaint purports to bring suit on behalf of the stockholders who purchased the Company’s publicly traded securities between January 18, 2022 and August 15, 2022. The second amended complaint does not reassert most of the earlier allegations, and purports to allege that the defendants made false and misleading statements about the abilities and potential of Centrellis, the Company’s proprietary intelligence platform, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and seeks unspecified compensatory damages, fees and costs. The Company’s motion to dismiss the second amended complaint was denied on June 23, 2025, and the parties subsequently engaged in discovery.
During the first quarter of 2026, the parties in the Helo putative class action reached an agreement in principle to resolve all claims for approximately $4.8 million, and intend to execute a formal stipulation of settlement reflecting such agreement in principle. To be finalized, the settlement must first be approved by the United States District Court for the District of Connecticut. There can be no assurance that the Court will approve such settlement. During the fourth quarter of 2025, the Company reserved the aforementioned settlement and associated litigation costs, totaling approximately $6.0 million, which are reported in accounts payable and accrued expenses on the condensed consolidated balance sheet as of December 31, 2025. During the first quarter of 2026, the Company incurred $0.7 million in associated litigation costs reported in accounts payable and accrued expenses on the condensed consolidated balance sheet as of March 31, 2026.
Other Legal Proceedings
On November 28, 2023, a stockholder filed a derivative suit, allegedly on behalf of the Company, based largely on the same allegations in the securities class action referenced above. The suit was filed in federal court in the District of Delaware, styled Ghazaleh v. Schadt, et al., 1:23-cv-01357 (D. Del.), and purports to assert claims against certain of the Company’s former and current officers and directors under Section 10(b) of the Exchange Act, and for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment and corporate waste. The Company is named only as a nominal defendant. The complaint seeks damages on the Company’s behalf, and seeks corporate governance and other relief. On March 11, 2024, the Court issued an order staying this suit pending resolution of or announcement of a settlement in the Helo putative class action referenced above (or certain other developments).
On June 25, 2024, a substantially similar stockholder derivative suit was filed in federal court in the District of Connecticut, styled Scinto v. Schadt, et al., 3:24-cv-01100 (D. Conn.). The suit, also purportedly brought on the Company’s behalf against certain of its former or current officers and directors, asserts claims for breach of fiduciary duty, gross mismanagement, and violations of Sections 14(a) and 10(b) of the Exchange Act. The Company is named only as a nominal defendant. The complaint seeks damages on the Company’s behalf, as well as corporate governance reforms and other relief. On September 2, 2025, the Court issued an order staying this suit until the final resolution of or announcement of settlement in the Helo class action referenced above.
On August 15, 2025, a third, substantially similar stockholder derivative suit was filed in federal court in the District of Delaware, styled Ingrao v. Ryan, et al., 1:25-cv-01027 (D. Del.). The suit, also purportedly brought on the Company’s behalf against certain of its former or current officers and directors, asserts claims for breach of fiduciary duty, unjust enrichment and violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Company is named only as a nominal defendant. The complaint seeks damages on the Company’s behalf, as well as corporate governance reforms and other relief. On October 27, 2025, the Court issued an order (1) consolidating this action with the above-referenced Ghazaleh derivative suit and (2) staying the consolidated suit until final resolution of or an announcement of a settlement in the Helo class action discussed above. The consolidated derivative suit is captioned In re GeneDx Holdings Corp. Derivative Litigation, Lead Case No. 1:23-cv-01357-GBW (D. Del.).
Stock-based compensation expense is included within the condensed consolidated statements of operations and comprehensive loss as follows:
Three months ended March 31,
2026
2025
Cost of services
$
380
$
168
Research and development
1,406
419
Selling, general and administrative
7,210
3,396
Total stock-based compensation expense(1)(2)
$
8,996
$
3,983
(1)The Company recorded an aggregate reversal of stock-based compensation of $0.8 million and $0.6 million during the three months ended March 31, 2026 and 2025, respectively, due to forfeiture activities upon employee terminations.
(2)Includes $1.1 million and $0.3 million of expenses related to the 2021 Employee Stock Purchase Plan for the three months ended March 31, 2026 and 2025, respectively.
Stock Incentive Plans
The Company maintains the Amended and Restated 2021 Equity Incentive Plan (as amended and restated, the “2021 Plan”), which allows for grants of stock-based awards. No awards granted under the 2021 Plan are exercisable after 10 years from the date of grant, and the awards granted under the 2021 Plan generally vest over a four-year period on a graded vesting basis; however, the Company has also granted certain restricted stock units with vesting terms beginning 12 months from the grant date and vesting immediately on the grant date. On January 1 of each year through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 Plan may be increased automatically by the number of shares equal to 5% of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31. In January 2026, the number of Class A common stock reserved for future issuance under the 2021 Plan automatically increased by 1,462,264 shares.
The Company also maintains the 2023 Equity Inducement Plan (the “Equity Inducement Plan”), which allows for grants of equity awards of the Company’s Class A common stock to individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.
As of March 31, 2026, there was an aggregate of 3,886,456 shares available for grants of stock options or other awards under the 2021 Plan and Equity Inducement Plan.
Stock Options
All stock options granted under the 2021 Plan are accounted for as service-based equity awards. The following summarizes the stock option activity during the three months ended March 31, 2026:
Stock Options
Weighted-Average Exercise Price
Weighted-Average Remaining Contractual Life (years)
Aggregate Intrinsic Value
Outstanding at December 31, 2025
199,454
$
65.29
6.41
$
14,015
Exercised
(2,314)
$
25.27
Outstanding at March 31, 2026
197,140
$
65.74
6.20
$
2,312
Options exercisable at March 31, 2026
195,598
$
65.88
6.21
$
2,233
Non-vested options outstanding as of March 31, 2026 were 1,542 with a weighted-average grant-date fair value of $44.15. As of March 31, 2026, unrecognized stock-based compensation cost related to the unvested portion of the Company’s stock options was nominal, and is expected to be recognized on a graded-vesting basis over a weighted-average period of 0.2 years.
The weighted-average grant-date fair value and total fair value of options with tranches vested during the three months ended March 31, 2026 was $45.37 and $0.9 million, respectively.
There were no options granted during the three months ended March 31, 2026. The aggregate intrinsic value of options exercised during the three months ended March 31, 2026 was $0.1 million, and is calculated based on the difference between the exercise price and the fair value of the Company’s Class A common stock as of the exercise date.
Restricted stock units granted under the 2021 Plan are accounted for as either service-based restricted stock units (“RSUs”) or performance-based restricted stock units (“PRSUs”). Restricted stock units convert to Class A common stock on a one-for-one basis as the awards vest. The Company measures the value of restricted stock units at fair value based on the closing price of the underlying common stock on the grant date. The following table summarizes restricted stock unit activity during the three months ended March 31, 2026:
Restricted Stock Units
Weighted-Average Grant Date-Fair Value Per Unit
Outstanding at December 31, 2025
1,519,733
$
42.91
Granted(1)
585,076
$
79.95
Vested
(413,318)
$
43.59
Forfeited
(39,253)
$
91.11
Outstanding at March 31, 2026
1,652,238
$
54.80
(1)Includes 124,805 PRSUs granted during the three months ended March 31, 2026 with a weighted-average grant-date fair value of $83.32.
During the three months ended March 31, 2026, the Company approved awards of 87,966 PRSUs to certain executives. The grant date fair value of the PRSUs is based on the fair value of the Company’s Class A common stock on the grant date. The awards have both service-based and performance-based vesting conditions. The actual number of shares earned on vesting ranges from 0% to 200% of the target number of shares granted, depending on the attainment of specified performance goals established for the years ending December 31, 2026 and 2027. In addition, previously awarded PRSUs granted during the three months ended March 31, 2025 achieved the maximum 200% performance level, resulting in the issuance of 36,839 incremental shares during the three months ended March 31, 2026.
The total fair value of restricted stock units vested during the three months ended March 31, 2026 was $18.0 million. As of March 31, 2026, unrecognized stock-based compensation expense related to the Company’s restricted stock units was $67.6 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 2.2 years.
Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. On January 1 of each year through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 ESPP may be increased automatically by the number of shares equal to 1% of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31. In January 2026, the number of Class A common stock reserved for future issuance under the 2021 ESPP automatically increased by 292,452 shares.
The 2021 ESPP became open for enrollment in April 2024. Under the 2021 ESPP, eligible employees may purchase shares of the Company’s Class A common stock at a discount through payroll deductions during each discrete six-month offering period. The purchase price under each discrete offering period is equal to 85% of the lesser of the fair market value of the Class A common stock on the first and last day of the offering period.
The Company did not make any grants of purchase rights under the 2021 ESPP during the three months ended March 31, 2026 and 2025. As of March 31, 2026, a total of 1,091,833 shares of Class A common stock have been reserved for future issuance under the 2021 ESPP.
11. Income Taxes
Income tax expense was $0.9 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively. Income taxes for these periods are recorded at the Company’s estimated annual effective income tax rate, subject to adjustments for discrete events should they occur. The Company’s effective tax rate for the three months ended March 31, 2026 and 2025 was (1.4)% and (7.3)%, respectively.
The difference between the Company’s effective tax rates in 2026 and 2025 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company currently has valuation allowances against a significant portion of its deferred tax assets primarily related to its net operating loss carryforwards and tax credit carryforwards.
The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders:
Three months ended March 31,
2026
2025
Numerator:
Net loss attributable to common stockholders
$
(63,316)
$
(6,529)
Denominator:
Basic and diluted weighted-average common shares outstanding
29,335,126
28,147,948
Basic and diluted loss per share
$
(2.16)
$
(0.23)
The following table summarizes the outstanding shares of potentially dilutive securities that were excluded from the computation of diluted loss per share attributable to common stockholders for the period presented as the effect would be anti-dilutive:
Three months ended March 31,
2026
2025
Outstanding options and restricted stock units
1,849,378
2,104,939
Outstanding warrants
666,515
666,515
Outstanding 2021 ESPP shares
40,644
19,498
Total
2,556,537
2,790,952
13. Supplemental Financial Information
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets to the total of the same amounts shown on the condensed consolidated statements of cash flows:
March 31, 2026
December 31, 2025
Cash and cash equivalents
$
93,924
$
104,997
Restricted cash (included in other assets)
992
992
Total
$
94,916
$
105,989
Restricted cash as of March 31, 2026 and December 31, 2025 primarily consists of money market deposit accounts that secure an irrevocable standby letter of credit that serves as collateral for a security deposit for operating leases.
Prepaid expenses and other current assets consisted of the following:
March 31, 2026
December 31, 2025
Prepaid expenses
$
9,763
$
7,174
Other current assets
1,011
1,511
Total
$
10,774
$
8,685
Accounts payable and accrued expenses consisted of the following:
Other current liabilities consisted of the following:
March 31, 2026
December 31, 2025
Accrued compensation
$
20,337
$
29,638
Accrued severance
742
771
Due to related parties
758
643
Current portion of long-term debt
—
4,542
Short-term contingent consideration liability
5,353
5,444
Short-term warrant liability
220
1,100
Other
8,538
4,721
Total
$
35,948
$
46,859
Other liabilities consisted of the following:
March 31, 2026
December 31, 2025
Long-term contingent consideration liability
—
1,570
Other
71
71
Total
$
71
$
1,641
2024 Sales Agreement
The Company entered into a sales agreement (the “2024 Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) in April 2024, pursuant to which the Company may, but is not obligated to, offer and sell, from time to time, shares of its Class A common stock with an aggregate offering price up to 75.0 million through TD Cowen, as sales agent, subject to the terms and conditions described in the Sales Agreement and SEC rules and regulations (the “prior ATM offering”). During the three months ended March 31, 2025, the Company issued 150,000 shares of its Class A common stock in connection with the prior ATM offering at an average price of $96.10 per share. Proceeds received, net of agent fees and other offering expenses, were $13.9 million. During the year ended December 31, 2025, the Company sold the maximum amount of shares in the prior ATM offering which resulted in the automatic termination of the 2024 Sales Agreement.
2025 Sales Agreement
The Company entered into an additional sales agreement (the “2025 Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) in October 2025, pursuant to which the Company may, but is not obligated to, offer and sell, from time to time, shares of its Class A common stock with an aggregate offering price up to $100.0 million through TD Cowen, as sales agent, subject to the terms and conditions described in the Sales Agreement and SEC rules and regulations (the “ATM offering”). During the year ended December 31, 2025, the Company issued 147,583 shares of its Class A common stock in connection with this ATM offering at an average price of $147.44 per share and the proceeds received, net of agent fees and other offering expenses, were $21.1 million. The Company did not issue any shares of its Class A common stock in connection with this ATM offering during the three months ended March 31, 2026. As of March 31, 2026, approximately $78.2 million of capacity remained available under this ATM offering.
14. Segment Reporting
The Company’s structure is aligned with how the chief operating decision maker (“CODM”) reviews the business, makes investing and resource allocation decisions and assesses operating performance. The Company’s CODM is its Chief Executive Officer. As of March 31, 2026, the Company has identified the GeneDx operating segment as its one reportable segment. The GeneDx operating segment primarily provides pediatric and rare disease diagnostics with a focus on whole exome and genome sequencing and, to a lesser extent, data and information services. The Company has also identified two other operating segments: (1) Fabric Genomics and (2) Legacy Sema4, which was completely shut down in 2023 and is winding down its operating activities. The Fabric Genomics and Legacy Sema4 operating segments do not meet the quantitative thresholds for reportable segments and are collectively reported in Other.
The CODM evaluates segment performance based on revenue and adjusted gross profit.
(1)Adjusted cost of services and adjusted gross profit exclude depreciation and amortization expense, stock-based compensation expense and restructuring costs.
Management manages assets on a total company basis, not by reporting segment. The CODM does not regularly review any asset information by reporting segment and, accordingly, the Company does not report asset information by reporting segment.
The Company is currently evaluating whether downward revisions to forecasted cash flows for the Fabric Genomics operating segment, driven by changes in commercial strategy and go-to-market execution, and lower revenue and profitability expectations, may impact its segment reporting conclusions in future periods.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). This discussion contains forward-looking statements and involves numerous risks and uncertainties. Actual results may differ materially from the results described in or implied by the forward-looking statements. You should carefully read the section entitled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from these forward-looking statements.
Overview
See Note 1, “Organization and Description of Business” to our condensed consolidated financial statements included in this Quarterly Report for more information.
Factors Affecting Our Performance
We believe several important factors have impacted, and will continue to impact, our performance and results of operations. While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See Item 1A, “Risk Factors” in this Quarterly Report and Part I, Item 1A “Risk Factors” in our 2025 Form 10-K, which are incorporated by reference in this Quarterly Report, for further information.
Test Volume
The principal focus of our commercial operations is to offer our diagnostic tests through both our direct sales force and laboratory distribution partners. Test volume correlates with genomic database size and long-term patient relationships. Thus, test volume drives database diversity and enables potential identification of variants of unknown significance and population-specific insights. The number of exome and genome tests resulted and the mix of test results are key indicators that we use to assess the operational efficiency of our business. Once the appropriate workflow is completed, the test is resulted and details are provided to ordered patients or healthcare professionals for reviews, which corresponds to the timing of our revenue recognition.
We believe the number of resulted exome and genome tests in any period is important and useful to our investors because it directly correlates with long-term patient relationships and the size of our genomic database. During the three months ended March 31, 2026, we resulted 27,488 exome and genome tests, which represented 50% of all test results, compared to the three months ended March 31, 2025, in which we resulted approximately 20,562 exome and genome tests, which represented 40% of all test results.
Success Obtaining and Maintaining Reimbursement
Our ability to increase the number of billable tests and our revenue therefrom will depend on our success in achieving reimbursement for our tests from third-party payors. Reimbursement by a payor may depend on several factors, including a payor’s determination that a test is appropriate, medically necessary, cost-effective, and has received prior authorization. The commercial success of our current and future products, if approved, will depend on the extent to which our customers receive coverage and adequate reimbursement from third-party payors including commercial and Medicaid. Since each payor makes its own decision as to whether to establish a policy or enter into a contract to provide coverage for our tests, as well as the amount it will reimburse us for a test, seeking these approvals is a time-consuming and costly process.
In cases where we or our partners have established reimbursement rates with third-party payors, we face additional challenges in complying with their procedural requirements for reimbursement. These requirements often vary from payor to payor and are reassessed by third-party payors regularly. As a result, in the past we have needed additional time and resources to comply with the requirements.
Third-party payors may decide to deny payment or seek to recoup payments for tests performed by us that they contend were improperly billed, not medically necessary or against their coverage determinations, or for which they believe they have otherwise overpaid. As a result, we may be required to refund payments already received, and our revenues may be subject to retroactive adjustment as a result of these factors among others.
We expect to continue to focus our resources on increasing the adoption of, and expanding coverage and reimbursement for, exome and genome, and any future tests we may develop or acquire. If we fail to expand and maintain broad adoption of, and coverage and reimbursement for, our tests, our ability to generate revenue and our future business prospects may be adversely affected.
Ability to Lower the Costs Associated with Performing our Tests
Reducing the costs associated with performing our diagnostic tests is both our focus and a strategic objective. We source, and will continue to source, components of our diagnostic testing workflows from third parties. We also rely upon third-party service providers for data storage and workflow management.
Increasing Adoption of our Services by Existing and New Customers
Our performance depends on our ability to retain and broaden the adoption of our services with existing customers as well as our ability to attract new customers. Our success in retaining and gaining new customers is dependent on the market’s confidence in our services and the willingness of customers to continue to seek more comprehensive and integrated genomic and clinical data insights.
Investment in Platform Innovation to Support Commercial Growth
We operate in a rapidly evolving and highly competitive industry. Our business faces changing technologies, shifting provider and patient needs, and frequent introductions of rival products and services. To compete successfully, we must accurately anticipate technology developments and deliver innovative, relevant, and useful products, services, and technologies on time. As our business evolves, the competitive pressure to innovate will encompass a wider range of products and services. We must continue to invest significant resources in research and development, including investments through acquisitions and partnerships. These investments are critical to the enhancement of our current diagnostics and health information and data science technologies from which existing and new service offerings are derived.
We expect to incur significant expenses to advance these development efforts, but they may not be successful. New potential services may fail at any stage of development and, if we determine that any of our current or future services are unlikely to succeed, we may abandon them without any return on our investment. If we are unsuccessful in developing additional services, our growth potential may be impaired.
Key Components of Results of Operations
Revenue
Diagnostic Test Revenue
The majority of our revenue is derived from genetic and genomic diagnostic testing services for three groups of customers: healthcare professionals working with patients with third-party insurance coverage or without third-party insurance coverage, institutional clients such as hospitals, clinics, state governments and reference laboratories, and self-pay patients. The amount of revenue recognized for diagnostic testing services depends on a number of factors, such as resulted test volumes, contracted rates with our customers and third-party insurance providers, insurance reimbursement policies, payor mix, historical collection experience, price concessions and other business and economic conditions and trends. To date, the majority of our diagnostic test revenue has been earned from orders received for patients with third-party insurance coverage. Our ability to increase our diagnostic test revenue will depend on our ability to increase our market penetration, obtain contracted reimbursement coverage from third-party payors, enter into contracts with institutions, and increase our reimbursement rate for tests performed.
Other Revenue
We also generate revenue from collaboration service agreements with biopharma companies and other third parties, pursuant to which we provide health information and patient identification support services. Certain of these contracts provide non-refundable payments, which we record as contract liabilities, and variable payments based upon the achievement of certain milestones during the contract term.
With respect to existing collaboration and service agreements, our revenue may fluctuate period to period due to the pattern in which we may deliver our services, our ability to achieve milestones, the timing of costs incurred, changes in estimates of total anticipated costs that we expect to incur during the contract period, and other events that may not be within our control. Our ability to increase our revenue will depend on our ability to enter into contracts with third-party partners.
In addition, with the acquisition of Fabric Genomics, we generate revenues through software and interpretation services related to rare disease, hereditary risk, and cancer testing. Our customers include clinical laboratories, hospitals, and research institutions. Our ability to increase this revenue will depend on our ability to expand our customer base among hospitals and genomic centers, along with increased adoption of whole genome sequencing and AI-enabled interpretation in clinical workflows.
The cost of services reflect the aggregate costs incurred in performing services, which include expenses for reagents and laboratory supplies, compensation expenses for employees directly involved in revenue generating activities, shipping and handling fees, costs of third-party reference lab testing and phlebotomy services, if any, and allocated genetic counseling, facility and information technology costs associated with delivery services. Allocated costs include depreciation of laboratory equipment, facility occupancy, and information technology costs. The cost of services are recorded as the services are performed.
We expect the cost of services to generally increase in absolute dollars with the anticipated growth in diagnostic testing volume and services we provide under our collaboration service agreements. However, we expect the cost per test to decrease over the long term due to the efficiencies we may gain from improved utilization of our laboratory capacity, automation, and other value engineering initiatives. These expected reductions may be offset by new tests which often have a higher cost per test during the introductory phases before we can gain efficiencies. The cost per test may fluctuate from period to period.
Research and Development Expenses
Research and development expenses represent costs incurred to develop our technology and future test offerings. These costs are principally associated with our efforts to develop the software we use to analyze data and process customer orders. These costs primarily consist of compensation expenses for employees performing research and development, innovation and product development activities, costs of reagents and laboratory supplies, costs of consultants and third-party services, equipment and related depreciation expenses, non-capitalizable software development costs, research funding to our research partners as part of research and development agreements and allocated facility and information technology costs associated with genomics medical research.
We generally expect our research and development expenses to continue to increase in absolute dollars as we innovate and expand the application of our platforms. However, we expect research and development expenses to decrease as a percentage of revenue in the long term, although the percentage may fluctuate from period to period due to the timing and extent of our development and commercialization efforts and fluctuations in our compensation-related charges.
Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily consist of compensation expenses for employees performing commercial sales, account management, marketing, genetic counseling, executive leadership, legal, finance and accounting, human resources, information technology, and other administrative functions. These expenses also include office occupancy, information technology, marketing-related costs, and other corporate infrastructure expenses. Selling, general and administrative costs are expensed as incurred.
We generally expect our selling, general and administrative expenses to continue to increase in absolute dollars as we expand our commercial sales, marketing and counseling teams, increase marketing activities, grow our administrative infrastructure, and incur costs associated with operating as a public company, including legal, accounting, regulatory, and Nasdaq and SEC compliance expenses. However, we expect selling, general and administrative expenses to decrease as a percentage of revenue over the long term as revenue increases, subject to fluctuations from period to period due to the timing and magnitude of these expenses and compensation-related charges.
Comparison of the three months ended March 31, 2026 and 2025
The following table sets forth our results of operations for the periods presented:
Three months ended March 31,
2026
2025
$ Change
% Change
Revenue
Diagnostic test revenue
$
101,299
$
85,759
$
15,540
18
%
Other revenue
955
1,356
(401)
(30)
%
Total revenue
102,254
87,115
15,139
17
%
Cost of services
34,043
28,639
5,404
19
%
Gross profit
68,211
58,476
9,735
17
%
Research and development
19,804
12,577
7,227
57
%
Selling, general and administrative
74,591
50,450
24,141
48
%
Impairment loss
31,287
—
31,287
NM
Loss from operations
(57,471)
(4,551)
(52,920)
1163
%
Non-operating (expenses) income, net
Change in fair value of financial liabilities
2,540
(1,100)
3,640
NM
Interest expense, net
(717)
(640)
(77)
12
%
Loss on extinguishment of debt
(6,565)
—
(6,565)
NM
Other (expense) income, net
(206)
209
(415)
NM
Total non-operating expense, net
(4,948)
(1,531)
(3,417)
223
%
Loss before income taxes
(62,419)
(6,082)
(56,337)
926
%
Income tax expense
(897)
(447)
(450)
101
%
Net loss
$
(63,316)
$
(6,529)
$
(56,787)
870
%
NM - Not Meaningful
Revenue
Total revenue increased by $15.1 million, or 17%, to $102.3 million for the three months ended March 31, 2026, from $87.1 million for the three months ended March 31, 2025.
Diagnostic test revenue increased by $15.5 million, or 18%, to $101.3 million for the three months ended March 31, 2026, from $85.8 million for the three months ended March 31, 2025. The increase is attributable to increase of 27% in whole exome and genome sequencing revenues driven by a 34% increase in test volumes. This was partially offset by a 5% decrease in average reimbursement rates and declines in other non-exome test revenues.
Other revenue decreased by $0.4 million, to $1.0 million for the three months ended March 31, 2026, from $1.4 million for the three months ended March 31, 2025. The decrease is driven by lower data deal activity in the current period compared to the prior period. This was partially offset by revenue from Fabric Genomics operating segment in the current period, which was acquired in the second quarter of 2025.
Gross Profit
Gross profit increased by $9.7 million for the three months ended March 31, 2026, primarily driven by the 34% increase in whole exome and genome test volumes.
Research and Development
Research and development expense increased by $7.2 million, or 57%, to $19.8 million for the three months ended March 31, 2026, from $12.6 million for the three months ended March 31, 2025. The increase was primarily attributable to higher compensation-related costs of $6.2 million which reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics. In addition, an increase in costs related to sponsored research programs of $0.6 million and an increase in software-related expenses of $0.4 million contributed to the overall increase in research and development expenses.
Selling, general and administrative expense increased by $24.1 million, or 48%, to $74.6 million for the three months ended March 31, 2026, from $50.5 million for the three months ended March 31, 2025. The increase was primarily attributable to higher compensation-related costs of $16.6 million which reflects our investment to support growth in our commercial team, as well as the inclusion of selling, general and administrative costs of Fabric Genomics in the current period. The increase also reflected higher IT software and infrastructure costs of $1.9 million, third-party consulting costs of $2.0 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting.
Impairment loss
During the first quarter of 2026, we recorded non-cash impairment charges totaling $31.3 million related to the goodwill and intangible assets of its Fabric Genomics reporting unit. This consists of a $11.9 million goodwill impairment charge, a $10.2 million impairment of developed technology, a $5.0 million impairment of customer relationships, and a $4.2 million impairment of tradenames and trademarks. See Note 6, “Goodwill and Intangible assets”for further information.
Non-Operating Expense, Net
Non-operating expense, net of $4.9 million for the three months ended March 31, 2026 primarily reflected a $6.6 million loss on extinguishment of the Perceptive long-term debt. This was offset by a gain in the change in the fair value of warrants of $0.9 million and a gain of $1.6 million in the change in fair value of contingent consideration related to Fabric Genomics.
Non-operating expense, net of $1.5 million for the three months ended March 31, 2025 primarily reflected a loss in the change in fair value of warrants of $1.1 million.
See Note 8, “Long-Term Debt” andNote 4, “Fair Value Measurements” for further information.
Reconciliation of Non-GAAP Financial Measures
In addition to our results determined in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
Non-GAAP financial measures have limitations as analytical tools and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. We may in the future incur expenses similar to the adjustments in the presentation of non-GAAP financial measures. Other limitations include that non-GAAP financial measures do not reflect:
•all expenditures or future requirements for capital expenditures or contractual commitments;
•changes in our working capital needs;
•the costs of replacing the assets being depreciated, which will often have to be replaced in the future;
•the non-cash component of employee compensation expense; and
•the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations.
Adjusted gross profit is a non-GAAP financial measure that we define as revenue less cost of services, excluding depreciation and amortization expense and stock-based compensation expense. We define adjusted gross margin as our adjusted gross profit divided by our revenue. We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
The following is a reconciliation of gross profit to our adjusted gross profit and of our gross margin to adjusted gross margin for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
2026
2025
Revenue
$
102,254
$
87,115
Cost of services
34,043
28,639
Gross profit
$
68,211
$
58,476
Gross margin
66.7
%
67.1
%
Add:
Depreciation and amortization expense
$
1,462
$
1,075
Stock-based compensation expense
380
168
Adjusted gross profit
$
70,053
$
59,719
Adjusted gross margin
68.5
%
68.6
%
Adjusted Net (Loss) Income
Adjusted net income (loss) is a non-GAAP financial measure that we define as net income (loss) adjusted for depreciation and amortization, stock-based compensation expenses, restructuring costs, change in fair value of financial liabilities, non-core lease costs, loss on extinguishment of debt, interest expense (net), income tax expense (benefit), transaction costs and costs related to a legal reserve. We believe adjusted net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain factors that may vary from company to company for reasons unrelated to overall operating performance.
The following is a reconciliation of our net loss to adjusted net (loss) income for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
2026
2025
Net loss
$
(63,316)
$
(6,529)
Depreciation and amortization expense
6,809
5,678
Stock-based compensation expense
8,996
3,983
Impairment loss
31,287
—
Restructuring costs
439
558
Change in fair value of financial liabilities
(2,540)
1,100
Non-core lease costs(1)
1,210
1,481
Loss on extinguishment of debt
6,565
—
Other(2)
2,320
2,901
Adjusted net (loss) income
$
(8,230)
$
9,172
(1)Non-core lease costs represent occupancy and related expenses associated with vacant laboratory facilities and office space in Connecticut that are no longer utilized as part of the Company’s operations.
(2)For the three months ended March 31, 2026, represents interest expense, net, income tax expense, net, and costs related to a certain litigation matter. For the three months ended March 31, 2025, represents interest expense, net, income tax expense, net, and transaction costs associated with the Merger Agreement.
As of March 31, 2026, our existing cash and cash equivalents and available-for-sale marketable securities were $170.7 million.
We believe that our cash and cash equivalents and available-for-sale marketable securities provide us with sufficient liquidity for at least twelve months from the filing date of this Quarterly Report. Accordingly, our condensed consolidated financial statements included in this Quarterly Report have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Nevertheless, we may also seek additional funding in the future through the sale of common or preferred equity or convertible debt securities, by entering into other credit facilities or other forms of third-party funding, or other debt financing or by disposing of assets or businesses.
In October 2025, we filed an automatic universal shelf registration statement that provides for the sale of our Class A common stock and other securities, and up to an aggregate of $100.0 million of our Class A common stock that may be issued from time to time under a Sales Agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”). As of March 31, 2026, approximately $78.2 million of capacity remained available under this Sales Agreement.
On February 27, 2026, we entered into a Loan Agreement (the “Loan Agreement”), among Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C. (collectively referred to herein as “Blackstone”), certain of our subsidiaries party thereto as guarantors (collectively, the “Guarantors”), Wilmington Trust, National Association, as Agent and the lenders from time to time party thereto (collectively, the “Lenders”).
The Loan Agreement provides for a term loan in an aggregate principal amount of $100.0 million (the “Term Loan”), which was funded on February 27, 2026 (the “Closing Date”). See Note 8, “Long-Term Debt” for further information.
Material Cash Requirements for Known Contractual Obligations and Commitments
We anticipate fulfilling our contractual obligations and commitments with existing cash and cash equivalents and available-for-sale marketable securities or through additional capital raised to finance our operations.
As discussed in the notes to our condensed consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of March 31, 2026, remaining payments due to the payor were $2.0 million. For more information regarding this matter, see Note 4, “Revenue Recognition” to our consolidated financial statements included in our 2025 Form 10-K and Note 3, “Revenue Recognition,” to our condensed consolidated financial statements included within this Quarterly Report, respectively.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our critical accounting policies and estimates are described in Note 2, “Summary of Significant Accounting Policies” to our condensed consolidated financial statements, and Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the 2025 Form 10-K. Other than disclosed in Note 2, there have been no material changes to our critical accounting policies and estimates in the current period.
Net cash (used in) provided by operating activities
$
(32,408)
$
10,182
Net cash used in investing activities
(17,255)
(9,408)
Net cash provided by financing activities
38,590
13,718
Operating Activities
Net cash used in operating activities during the three months ended March 31, 2026 was $32.4 million, driven by a net loss of $63.3 million, net adjustments of $54.1 million and a change in operating assets and liabilities of $23.2 million. The impact of the change in operating assets and liabilities was primarily driven by decreased accounts payables and accrued expenses due to the timing of vendor payments and a decrease in other assets and liabilities due to the timing of associated payments.
Net cash provided by operating activities during the three months ended March 31, 2025 was $10.2 million, driven by a net loss of $6.5 million, net adjustments of $13.4 million and a change in operating assets and liabilities of $3.4 million. The impact of the changes in operating assets and liabilities was primarily driven by increased accounts payables and accrued expenses due to the timing of vendor payments and orders with suppliers which was partially offset by an increase in accounts receivable, driven by growth in exome and genome test volumes.
Investing Activities
Net cash used in investing activities during the three months ended March 31, 2026 was $17.3 million, which included purchases of marketable securities of $20.2 million and purchases of property and equipment and development of internal-use software of $6.5 million. This was partially offset by proceeds from maturities of marketable securities of $8.5 million.
Net cash used in investing activities during the three months ended March 31, 2025 was $9.4 million, which included purchases of marketable securities of $17.2 million and property and equipment of $6.1 million, partially offset by $13.9 million in proceeds from the maturities of marketable securities.
Financing Activities
Net cash provided by financing activities during the three months ended March 31, 2026 was $38.6 million, which primarily reflected proceeds from long term debt, net of issuance costs, of $97.0 million and partially offset by the repayment of existing long-term debts in the amounts of $54.0 million and $4.4 million. For more information regarding our long-term debt, see Note 8, “Long-term Debt.”
Net cash provided by financing activities during the three months ended March 31, 2025 was $13.7 million, primarily driven by the $13.9 million net proceeds from our prior ATM offering, net of issuance costs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk
We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rates. Our cash, cash equivalents, available-for-sale marketable securities and restricted cash consists of bank deposits and money market funds, which totaled $171.7 million and $172.3 million as of March 31, 2026 and December 31, 2025, respectively. Such interest-bearing instruments carry a degree of risk. However, because our investments are primarily high-quality credit instruments with short-term durations with high-quality institutions, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A 100-basis point change in interest rates would not have a material effect on the fair market value of our cash, cash equivalents and restricted cash.
We are also exposed to interest rate risk on our variable rate debt associated with the Blackstone term loan facility. Changes in interest rates can impact future interest payments we are obligated to pay. A 100-basis point change in interest rates would not have a material effect on the total future interest payments.
See Note 8, “Long-Term Debt” for further information.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026, because of the material weaknesses in internal control over information technology general controls, or ITGCs previously identified for the year ended December 31, 2025, as described below, has not been fully remediated as of March 31, 2026.
Previously Reported Material Weakness
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
As described in more detail in Item 9A. “Controls and Procedures” of our 2025 Form 10-K, we identified a material weakness in internal control related to deficiencies in the design and operating effectiveness of IT general controls related to segregation of duties in the program change management process for a single IT system that supports certain aspects of our revenue processes. As a result, certain automated controls and business process controls related to recording revenue that are dependent on the affected IT system or the information from such IT system were also deemed ineffective.
Remediation of Previously Reported Material Weakness
Our management is actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the material weakness. The Company has continued to improve its organizational capabilities and continues to implement processes and controls to remediate the material weakness, including:
•Enhancing system settings within the impacted IT application to enforce segregation of duties and align with control design requirements.
•Implementing and formalized change management and monitoring controls to support improved governance over changes to the affected IT application.
While we have performed the remediation activities to strengthen our controls to address the identified material weakness, we do not consider the material weakness to be remediated until new internal controls have been operational for a sufficient period of time and management has tested these controls to conclude that they are designed and operating effectively. We will continue to monitor the effectiveness of our remediation activities.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the three months ended March 31, 2026 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitation on the Effectiveness of Internal Control
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.
Information required under this Item is contained above in Part I. Financial Information, Item 1, Note 9, “Purchase Commitments and Contingencies” to our condensed consolidated financial statements included within this Quarterly Report and is incorporated herein by reference.
Item 1A. Risk Factors
Except for as set forth below, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A “Risk Factors” of our 2025 Form 10-K:
Our credit agreement contains operating and financial restrictions that may limit our business and financing activities.
Our credit agreement with Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C. (collectively referred to herein as “Blackstone”) contains operating and financial restrictions that may limit our business and financing activities. In particular, our credit agreement includes customary affirmative and negative covenants and events of default, including negative covenants that restrict, among other things, our ability to incur indebtedness and liens, dispose of property and make investments. In addition, the credit agreement requires us to maintain aggregate unrestricted cash of not less than $50.0 million following the closing date. The operating and financial restrictions in the credit agreement, as well as any other financing arrangements that we may enter into, may limit our ability to finance our operations, or engage in, expand, or otherwise pursue our business activities and strategies. Our ability to comply with these or other covenants may be affected by events beyond our control, and future breaches of these or other covenants could result in a default under the credit agreement or any other financing arrangement. If not waived, future defaults could cause all of the outstanding indebtedness under our credit agreement or other financing arrangement to become immediately due and payable and terminate all commitments to extend further credit, if any. Furthermore, if we were unable to repay our credit agreement or other indebtedness then due and payable, secured lenders could proceed against the assets, if any, securing such indebtedness. A default would also likely significantly diminish the market price of our securities.
If we do not have or are unable to generate sufficient cash to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all, which may negatively impact our ability to operate and continue our business as a going concern.
The market price of our securities may be volatile or decline due to market conditions, or failure to meet investor, stockholder or analyst expectations, which could result in a loss of your investment.
The trading price and valuation of life sciences companies, including ours, have been and may continue to be highly volatile, which has often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable.
Future volatility in the market price for our securities may occur in response to factors beyond our control, including actual or anticipated fluctuations in our quarterly financial results, changes in market expectations regarding our operating performance, public reaction to our press releases and SEC filings, competitive developments, changes in financial estimates or recommendations by securities analysts which may result in the loss of investor confidence, and general economic and political conditions such as the war in the Middle East. These risk factors, and any other risk factors described in this Annual Report, could materially adversely affect our business and the market price of our securities, which may trade at prices significantly below the price paid for them and may not recover. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Recent Sales of Unregistered Securities
On March 6, 2026, the Company entered into separate subscription agreements with Katherine Stueland, our Chief Executive Officer, and Kevin Feeley, of Chief Financial Officer, for the purchase of 3,404 and 1,986 shares of common stock, respectively, at a price of $88.11 per share. The purchase price represented the closing price of the Company’s common stock on the Nasdaq Global Select Market on the date of the agreements.
On March 10, 2026, the Company issued an aggregate of 5,390 shares of common stock to these executive officers for total gross proceeds of $0.5 million. The shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933, as amended, as transactions not involving a public offering. The Company intends to use the proceeds for general corporate purposes and did not pay any underwriting discounts or commissions in connection with the issuances.
Other than the issuances described above, the Company did not sell any equity securities during the quarter ended March 31, 2026 that were not registered under the Securities Act.
Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
Rule 10b5-1 Plan Adoptions and Modifications
None.
Supplemental Disclosure to our Annual Report on Form 10-K for the year ended December 31, 2025
The following updates Part I, Item 1. “Business—Intellectual Property—Patents”in our 2025 Form 10-K:
Patents
The fields of genomic and health information analysis present limited opportunities for patent protection, based on current legal precedents. Our patent protection strategy has focused on seeking protection for certain of our non-gene specific technology and our specific biomarkers. In this regard, we have one issued U.S. design patent, thirteen pending U.S. non-provisional utility patent applications, two pending U.S. provisional patent applications, and four pending international PCT patent applications. The issued U.S. design patent relates to a display screen with a graphical user interface. The utility patent applications include an international PCT patent application and a U.S. patent application related to performing phenotypic fit analysis, an international PCT patent application and a U.S. patent application related to analyzing genetic variations and phenotypes, an international PCT patent application and a U.S. patent application related to modeling inference of mutation impact, a U.S. patent application related to generating a cancer determination from electronic health records using a cancer determination analysis system, a U.S. patent application related to providing a homologous recombination DNA repair deficiency score for a cancer patient, a U.S. patent application related to therapeutic treatment for subjects having certain polymorphic markers associated with specific human leukocyte antigen alleles, a U.S. patent application relating to analyzing phenotype-causing genomic variants, a U.S. patent application relating to prioritizing phenotype-causing genomic variants in combination with biomedical ontologies, a U.S. patent application relating to prioritizing phenotype-causing genomic variants in combination with clinical information, and an international PCT patent application relating to analyzing long biological sequence data. If patents are issued from the currently pending applications, the earliest patents will begin expiring in the early 2030s, subject to potential extensions of the patent term that will be calculated based on the length of the patent examination process. The claim scope of any potentially issued patents stemming from the present applications may be narrower than included in the initial filings due to any amendments that may arise throughout their prosecution.
We do not presently have any patents directed to the sequences of specific genes or variants of such genes, nor do we currently rely on any in-licensed gene patent rights of any third party. We may, in time, seek additional patent protection to protect technology that is not gene-specific and that provides us with a potential competitive advantage as we focus on making comprehensive genetic information less expensive and more broadly available to our customers.
Recent Accounting Pronouncements
Additional information on recent accounting pronouncements can be found in Note 2, “Summary of Significant Accounting Policies”to our consolidated financial statements included within our 2025 Form 10-K, and Note 2,“Summary of Significant Accounting Policies”to our condensed consolidated financial statements included in this Quarterly Report.
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101).
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Management Contract or Compensatory Plan
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Furnished
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Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
