Natera, Inc 10-Q for FY2026 Q3
Natera, Inc. (NTRA)
10-Q
2026-11-05
For: 2026-09-30
View Original
Added on
November 05, 2026
About this 10-Q
Natera, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $793.98M
- up 34.1% from $592.18M a year earlier
- Net loss
- $59.91M
- compared with a net loss of $87.54M a year earlier
- Diluted EPS
- -$0.42
- compared with -$0.64 a year earlier
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________________________
FORM 10-Q
_________________________________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___________ to ___________
Commission File Number: 001-37478
_________________________________________________________________
(Exact Name of Registrant as Specified in Its Charter)
_________________________________________________________________
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
(650 ) 980-9190
(Registrant’s Telephone Number, Including Area Code)
_________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
The | ||||||||
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. Yes x No ☐
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). Yes x No ☐
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.
| x | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 31, 2026, the number of outstanding shares of the registrant’s common stock, par value $0.0001 per share, was 145,004,521 .
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Natera, Inc.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
| Page | |||||
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements. The forward-looking statements are contained principally in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained elsewhere in this report. Forward-looking statements include information concerning our future results of operations and financial position, strategy and plans, and our expectations for future operations. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as “believe,” “may” “will” “estimate,” “continue,” “anticipate,” “design” “intend” “expect” “could,” “plan” “potential,” “predict,” “seek,” “should,” “would” or the negative version of these words and similar expressions.
These forward-looking statements include, but are not limited to, statements concerning the following:
•our expectations regarding revenue, expenses and other operating results;
•our expectation that, for the foreseeable future, a significant portion of our revenues will be derived from sales of Signatera, Panorama, and Horizon;
•our ability to increase demand and reimbursement for our tests;
•our expectation that Panorama will be adopted for the screening of microdeletions and that third-party payer reimbursement will be available for this testing, including our expectations that the results from our Single nucleotide polymorphism-based Microdeletion and Aneuploidy RegisTry, or SMART, Study may support broader use of and reimbursement for the use of Panorama for microdeletions;
•our expectations of the reliability, accuracy, and performance of our tests, as well as expectations of the benefits of our tests to patients, providers, and payers;
•our ability to successfully develop additional revenue opportunities and expand our product offerings to include new tests;
•our efforts to successfully develop and commercialize, or enhance, our products;
•our ability to comply with federal, state, and foreign regulatory requirements, programs and policies, our expectations regarding the potential impact of governmental regulations on our business and operations, and our ability to successfully operate our business in response to changes in such requirements, programs, policies and regulations;
•our ability to respond to, defend, or otherwise favorably resolve litigation or other proceedings, including investigations, subpoenas, demands, disputes, requests for information, and other regulatory or administrative actions or proceedings, including associated litigation costs we may incur and our assumptions regarding any potential liabilities associated with our existing litigation matters;
•the effect of improvements in our cost of goods sold;
•our estimates of the total addressable markets for our current and potential product offerings;
•our ability and expectations regarding obtaining, maintaining and expanding third-party payer coverage of, and reimbursement for, our tests;
•the effect of changes in the way we account for our revenue;
•the scope of protection we establish and maintain for, and developments or disputes concerning, our intellectual property or other proprietary rights, including associated litigation costs we may incur and our assumptions regarding any potential liabilities associated with our existing litigation matters;
•our ability to successfully compete in the markets we serve;
•our reliance on collaborators such as medical institutions, contract laboratories, laboratory partners, and other third parties;
•our ability to operate our laboratory facilities and meet expected demand, and to successfully scale our operations;
•our reliance on a limited number of suppliers, including sole source suppliers, which may impact our ability to maintain a continued supply of laboratory instruments and materials and to run our tests;
•our expectations of the rate of adoption of our current or future tests by laboratories, clinics, clinicians, payers, and patients;
•our ability to complete clinical studies and publish compelling clinical data in peer-reviewed medical publications regarding our current and future tests, and the effect of such data or publications on professional society or practice guidelines or coverage and reimbursement determinations from third-party payers, including our SMART and CIRCULATE-Japan studies and our ongoing and planned trials in oncology and organ health;
•our reliance on our partners to market and offer our tests in the United States and in international markets;
•our expectations regarding acquisitions, dispositions and other strategic transactions and our ability to successfully integrate Foresight Diagnostics, Inc. into our business operations;
•our ability to control our operating expenses and fund our working capital requirements;
•the factors that may impact our financial results, including our revenue recognition assumptions and estimates; and
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•anticipated trends and challenges in our business and the markets in which we operate.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those discussed in Part II, Item 1A, “Risk Factors” in this report and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission on February 27, 2026. Given these uncertainties, you should not place undue reliance on these forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.
Also, forward-looking statements represent our beliefs and assumptions only as of the date of this report. Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
As used in this Quarterly Report on Form 10-Q, the terms “Natera,” “Registrant,” “Company,” “we,” “us,” and “our” mean Natera, Inc. and its subsidiaries unless the context indicates otherwise.
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Natera, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands except par value)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued compensation | |||||||||||
| Contingent consideration payable, current portion | |||||||||||
| Deferred revenue, current portion | |||||||||||
| Short-term debt financing | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Contingent consideration payable, long-term portion | |||||||||||
| Deferred tax liability, long-term portion | |||||||||||
| Operating lease liabilities, long-term portion | |||||||||||
| Deferred revenue, long-term portion | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to the unaudited interim condensed consolidated financial statements.
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Natera, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(in thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Product revenues | $ | $ | $ | $ | |||||||||||||||||||
| Licensing and other revenues | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Cost and expenses | |||||||||||||||||||||||
| Cost of product revenues | |||||||||||||||||||||||
| Cost of licensing and other revenues | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||
| Total cost and expenses | |||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest and other income, net | |||||||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Income tax benefit (expense) | ( | ( | ( | ( | |||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax and foreign currency translation adjustment | ( | ||||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net loss per share (Note 14): | |||||||||||||||||||||||
| Basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average number of shares used in computing basic and diluted net loss per share: | |||||||||||||||||||||||
| Basic and diluted | |||||||||||||||||||||||
See accompanying notes to the unaudited interim condensed consolidated financial statements.
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Natera, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands)
| Three months ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Cash paid to satisfy statutory withholding requirement for net settlement of cashless stock option exercises | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for sale securities, net of tax and foreign currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock under the employee stock purchase plan | — | — | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for bonus | — | — | — | |||||||||||||||||||||||||||||||||||
| Cash paid to satisfy statutory withholding requirement for net settlement of cashless stock option exercises | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to asset acquisition, net | — | — | — | |||||||||||||||||||||||||||||||||||
| Cancellation of escrow shares pursuant to business combination, net | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for sale securities | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
See accompanying notes to the unaudited interim condensed consolidated financial statements.
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Natera, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands)
| Three months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for sale securities, net of tax and foreign currency translation adjustment | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock under the employee stock purchase plan | — | — | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for bonus | — | — | — | |||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for sale securities, net of tax and foreign currency translation adjustment | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | $ | ( | — | ( | |||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
See accompanying notes to the unaudited interim condensed consolidated financial statements.
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Natera, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Operating activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of acquired intangible assets | |||||||||||
| Amortization of premiums and accretion of purchase discounts on investment securities | |||||||||||
| Non-cash settlement expense | |||||||||||
| Non-cash lease expense | |||||||||||
| Stock-based compensation | |||||||||||
| Change in fair value of warrants and preferred stock of related party equity investment | ( | ( | |||||||||
| Revaluation of contingent consideration | |||||||||||
| Other non-cash items | |||||||||||
| Non-cash expense recovery | ( | ( | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventory | ( | ( | |||||||||
| Operating lease right-of-use assets | |||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued compensation | |||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other accrued liabilities and other liabilities | |||||||||||
| Deferred revenue | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Investing activities | |||||||||||
| Proceeds from maturity of investments | |||||||||||
| Purchases of property and equipment, net | ( | ( | |||||||||
| Purchase of intangible assets, net | ( | ||||||||||
| Cash paid for business combination, net | ( | ||||||||||
| Investment in related party | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing activities | |||||||||||
| Proceeds from exercise of stock options | |||||||||||
Cash paid to satisfy statutory withholding requirement for net settlement of cashless stock option exercises | ( | ||||||||||
| Proceeds from the issuance of common stock under the employee stock purchase plan | |||||||||||
| Stock issuance costs | ( | ||||||||||
| Net cash provided by financing activities | |||||||||||
| Net change in cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Purchases of property and equipment in accounts payable and accruals | $ | $ | ( | ||||||||
| Acquisition of warrants | $ | $ | |||||||||
| Amounts accrued for acquisition of intangible assets | $ | $ | |||||||||
| Consideration for business combination | $ | $ | |||||||||
| Issuance of common stock for intangible assets | $ | $ | |||||||||
| Issuance of common stock for bonuses | $ | $ | |||||||||
| Stock-based compensation included in capitalized software development costs | $ | $ | |||||||||
See accompanying notes to the unaudited interim condensed consolidated financial statements.
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Natera, Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
1. Description of Business
Natera, Inc. (the “Company”) was formed in the state of California as Gene Security Network, LLC in November 2003 and incorporated in the state of Delaware in January 2007. The Company is a diagnostics company with proprietary molecular and bioinformatics technology that it is applying to change disease management worldwide. The Company’s cell-free DNA (“cfDNA”) technology combines its novel molecular assays, which reliably measure many informative regions across the genome, from samples as small as a single cell, with its statistical algorithms that incorporate data available from the broader scientific community to identify genetic variations, covering a wide range of serious conditions with high accuracy and coverage. The Company focuses on applying its technology to three main areas of healthcare – oncology, women’s health, and organ health. In oncology, the Company commercializes personalized blood-based DNA tests designed to optimize therapy decisions from diagnosis to survivorship. In the women’s health space, the Company develops and commercializes non- or minimally- invasive tests to support a range of women’s health needs, from prenatal testing to hereditary cancer screening. In organ health, the Company offers tests to assess kidney, heart, and lung transplant rejection as well as genetic testing for chronic kidney disease. The Company operates laboratories in Austin, Texas, San Carlos, California, and Boulder, Colorado, certified under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), providing a host of cell-free DNA-based molecular testing services. The Company determines its operating segments based on the way it organizes its business to make operating decisions and assess performance. The Company operates one segment, the development and commercialization of molecular testing services, applying its proprietary technology in the fields of women’s health, oncology and organ health.
The Company’s key product offerings include its Panorama Non-Invasive Prenatal Test (“Panorama”) that screens for chromosomal abnormalities of a fetus in single and twin pregnancies, typically with a blood draw from the mother; Horizon Carrier Screening (“Horizon”) to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier’s children; its Signatera molecular residual disease test (“Signatera”) to detect circulating tumor DNA in patients previously diagnosed with cancer to assess molecular residual disease, monitor for recurrence, and evaluate treatment response; and its Prospera test, to assess organ transplant rejection in patients who have undergone kidney, heart, or lung transplantation. All testing is available principally in the United States with Panorama testing available to customers outside of the United States, primarily in Europe. Additionally, the Company also offers a cloud-based software platform, Constellation, that enables laboratory customers to gain access through the cloud to the Company’s algorithms and bioinformatics to validate and launch their own tests based on the Company’s technology.
2. Summary of Significant Accounting Policies
During the nine months ended September 30, 2026, there were no material changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (filed on February 27, 2026).
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. The unaudited interim condensed consolidated financial information includes only adjustments of a normal recurring nature necessary for a fair presentation of the Company’s results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the nine months ended September 30, 2026, are not necessarily indicative of the results for the full year or the results for any future periods. The condensed consolidated balance sheet as of December 31, 2025 has been derived from audited financial statements at that date. These financial statements should be read in conjunction with the audited financial statements, and related notes for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2026.
Some items in the prior period financial statements were reclassified to conform to the current presentation.
Liquidity Matters
The Company has incurred net losses since its inception and anticipates net losses for the near future. The Company had a net loss of $212.0 million for the nine months ended September 30, 2026 and an accumulated deficit of $3.0 billion as of September 30, 2026. As of September 30, 2026, the Company had $1.1 billion in cash and an $80.3
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million outstanding balance on its Credit Line (as defined in Note 12, Debt) including accrued interest. The Company is required to maintain a minimum of at least $150.0 million in its UBS accounts as collateral for its Credit Line, which is classified as cash, cash equivalents, and restricted cash in the condensed consolidated balance sheets. As of September 30, 2026, the Company had $20.0 million remaining and available on its Credit Line.
While the Company has introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations and business plans. Accordingly, the Company has funded the portion of operating costs that exceeds revenues through a combination of equity issuances, debt issuances, and other financings.
The Company continues to invest in the development and commercialization of its existing and future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders will experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available when necessary, or in amounts or on terms acceptable to the Company. If the Company is unable to obtain additional financing, it may be required to delay or slow its investment in the development and commercialization of its products and significantly scale back its business and operations.
Based on the Company’s current business plan, the Company believes that its existing cash will be sufficient to meet its anticipated cash requirements for at least 12 months after the date of issuance of the accompanying financial statements.
Principles of Consolidation
The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates, and assumptions that could affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience and on various other assumptions it believes to be applicable and evaluates them on an ongoing basis to ensure they remain reasonable under current conditions. Actual results could differ significantly from those estimates.
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting, which requires, among other things, that results of operations for acquired companies are included in the Company’s results of operations beginning on the acquisition date and that assets acquired, and liabilities assumed are recognized at fair value as of the acquisition date. Any excess of the fair value of consideration transferred over the fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the condensed consolidated statements of operations and comprehensive loss. Acquisition-related expenses and post-combination integration and employee compensation costs are recognized separately from the business combination and are expensed as incurred.
Contingent consideration obligations incurred in connection with a business combination are recorded at their estimated fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies have been resolved. The resulting changes in fair values are recorded within selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. The determination of fair value requires management to make significant estimates. These estimates are inherently uncertain and subject to change as additional information is obtained during the measurement period, which lasts for up to one year from the acquisition date. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the condensed consolidated statements of operations and comprehensive loss. See Note 3, Business Combination, for details.
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Accounts Receivable, net of allowance
Trade accounts receivable and other receivables. The allowance for expected credit losses for trade accounts receivable is based on the Company’s assessment of the collectability of accounts related to its clinics and laboratory partner customers. The Company regularly reviews the allowance by considering factors such as historical experience, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. See Note 8, Balance Sheet Components, for a roll-forward of the allowance for expected credit losses related to trade accounts receivable for the three and nine months ended September 30, 2026 and 2025.
With respect to revenue recognized related to genetic test services and assessing the total consideration expected to be received from insurance carriers and patients, the total consideration the Company expects to collect is an estimate and is largely variable in nature. The Company initially determines variable consideration by considering historical payment trends for tests delivered, test reimbursement disallowances, and contractual arrangements in place, among other factors, which is further adjusted for current expectations, as determined necessary. The Company then assesses trade accounts receivable for credit losses under ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASC 326”). Historically, the Company has determined the insurance payors from whom such receivables are expected to be collected are of high quality, in addition to the relatively short duration over which the majority of receivables are collected. Accordingly, the Company currently does not have an incremental credit loss reserve nor allowance for expected credit losses against accounts receivable for insurance and patient payors.
Inventory
Inventory is recorded at the lower of cost or net realizable value, determined on a first-in, first-out basis. Inventory consists entirely of supplies, which are consumed at the point biologic samples are collected and the Company provides genetic testing services, and therefore, the Company does not maintain any work-in-process or finished goods inventory. The Company enters into inventory purchases commitments so that it can meet future delivery schedules based on forecasted demand for its tests.
The Company analyzes its inventory to determine whether the composition of its inventory is obsolete or slow-moving. A write down of specifically identified unusable, or obsolete inventory in the period is recognized by considering product expiration dates and scrapped inventory. Any write-down of inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded to cost of revenue on our condensed consolidated statements of operations and comprehensive loss. Inventory reserves as of September 30, 2026 and December 31, 2025 were not material.
Goodwill
The excess of the fair value of consideration transferred over the fair value of the net assets acquired in a business combination is recorded as goodwill. Goodwill is tested for impairment at the reporting unit level on an annual basis on October 1, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Qualitative factors considered in this assessment include macroeconomic conditions, industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company’s business. Based on the qualitative assessment, if it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the fair value of the reporting unit will be calculated and compared with its carrying amount, and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value, limited to the total amount of goodwill.
Intangible Assets
Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. Intangible assets are amortized assuming no expected residual value. Amortization expense related to intangible assets acquired via business combinations are recorded in amortization of acquired intangible assets expense in the condensed consolidated statements of operations and comprehensive loss. Amortization expense related to all other intangible assets was recorded to the functional category to which it primarily relates in the condensed consolidated statements of operations and comprehensive
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loss. The Company assesses the impairment of long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Accumulated Other Comprehensive Income (Loss)
Comprehensive loss and its components encompass all changes in equity other than those with stockholders, and include net loss, unrealized gains and losses on available-for-sale marketable securities and foreign currency translation adjustments.
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net unrealized (loss) gain on available-for-sale securities, net of tax and foreign currency translation adjustment | ( | ||||||||||||||||||||||
| Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The change in net unrealized loss on available-for-sale securities is due to the impact of changes in interest rates on the value of fixed-rate investments and not due to any credit deterioration. Further, due to the short-term nature of these investments, the Company has the ability and intention to hold any such investments until maturity and does not expect to realize any material investment losses. Since the Company did not hold any investments at September 30, 2026 or December 31, 2025, an allowance for credit loss was not necessary.
Revenue Recognition
The Company recognizes revenue under, ASC 606, using the following five step process:
•Identification of a contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Revenue recognition when, or as, the performance obligations are satisfied.
As further explained in Note 4, Revenue Recognition, the Company recognizes revenues when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers. The total consideration the Company expects to receive may be fixed or variable. For insurance and patient sales, the transaction price is primarily based on historical cash collections for tests delivered, as adjusted for current expectations. Current expectations of cash collections include changes in reimbursement rate trends, past events not expected to recur, and future known changes such as anticipated contractual pricing changes or changes to insurance coverage. In establishing the transaction price, the Company considers test types with similar reimbursement characteristics together. For sales to clinics and pharmaceutical customers, the transaction price is fixed through established contracts and agreements.
See Note 4, Revenue Recognition, for detailed discussions of product revenues, licensing and other revenues, and how the five steps described above are applied.
Fair Value
The Financial Accounting Standards Board (“FASB”) has issued authoritative guidance that requires fair value to be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under that standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or
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liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
Related Party Transactions
On December 6, 2021, the Company participated along with certain other investors in the series B financing of MyOme, Inc. (“MyOme”) and purchased preferred shares and warrants in exchange for a cash payment of approximately $4.0 million which was allocated $2.2 million for preferred shares and $1.8 million for warrants. In August 2024, the Company participated in a subsequent round of the series B financing and purchased an additional $2.7 million of series B preferred shares at the same valuation as the initial round of financing in December 2021. The Company does not hold a seat on MyOme’s board of directors and does not participate or direct the day-to-day activities of MyOme. Because MyOme is a privately-held company without readily determinable fair values, the Company elected to account for its preferred Series B share investment in MyOme using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer as of the respective transaction dates. When indicators exist and the estimated fair value of the investment is below its carrying amount, the Company would adjust the investment to fair value. The change in carrying value, resulting from the remeasurements, would be recognized in interest and other income, net on the condensed consolidated statements of operations and comprehensive loss. The following are the Company’s related persons and the basis of each such related person’s relationship with MyOme:
•Matthew Rabinowitz, the Company’s executive chairman and co-founder, is the chairman of the board, founder, and the interim chief executive officer of MyOme, and a beneficial holder of approximately 16.5 % of the outstanding shares of MyOme on a fully dilutive basis;
•Jonathan Sheena, the Company’s co-founder and a member of the Company’s board of directors, is a stockholder and a member of the board of directors of MyOme;
•Daniel Rabinowitz, the Company’s Secretary and Chief Legal Officer, is a stockholder of MyOme; and
•Roelof Botha, the Lead Independent Director of the Company’s board of directors, is a managing member of Sequoia Capital. Certain funds affiliated with Sequoia Capital also participated in MyOme’s series B financing.
None of the related party investments in MyOme by our executives and directors noted above were at the behest of the Company nor funded by the Company.
In February 2024, the Company entered into a collaboration and commercialization agreement (the “Collaboration Agreement”) with MyOme pursuant to which the parties agreed to partner to offer certain genetic testing services to be developed and funded solely by MyOme and overseen by a joint steering committee. The Company agreed to assist MyOme with commercial activities. In connection with the Collaboration Agreement, the Company received a 10 -year warrant to purchase 3,058,485 shares of MyOme’s common stock at an exercise price of $0.25 per share, which is exercisable in whole or in part, commencing in February 2024, and can be converted to MyOme’s common stock upon the occurrence of MyOme’s initial public offering or a liquidation event (as such terms are defined in MyOme’s certificate of incorporation). Additionally, upon the achievement of certain product commercialization milestones, the Company is eligible to receive an additional warrant exercisable for 2,080,565 shares of MyOme’s series B preferred stock with an exercise price of $0.01 per share. During September 2024, the Company achieved certain product commercialization milestones such that the warrant for 2,080,565 shares of MyOme’s series B preferred stock was due from MyOme to the Company. These warrants were granted and issued by MyOme to the Company during the fourth quarter of 2024, and were exercisable in whole or in part in December 2024. In October 2025, the Company entered into an amendment to the Series B Preferred Stock Agreement with MyOme, resulting in the Company investing an additional $10.0 million in MyOme in January 2026. In January 2026, the Company achieved another product commercialization milestone and as such, an additional warrant for 1,977,769 shares of MyOme’s series B preferred stock was due from MyOme to the Company. This warrant was granted and issued by MyOme to the Company in August 2026 and is exercisable in whole or in part. However, the Company needs to perform ongoing collaboration in exchange for the warrant consideration. Accordingly, the warrants have been included within other assets and allocated between short-term and long-term liabilities on the condensed consolidated balance sheets. The Company is amortizing the liability as a reduction of selling and marketing expense upon commercialization and sale of the products contemplated under the Collaboration Agreement over the life of the contract. For the three months ended September 30, 2026 and 2025, the amortization of the non-cash liability was $0.7
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million and $0.4 million, respectively. For the nine months ended September 30, 2026 and 2025, the amortization of the non-cash liability was $2.0 million and $1.1 million, respectively.
The warrants are accounted for as derivative instruments and recorded within other assets on the condensed consolidated balance sheets at fair value on a recurring basis. The warrants were valued using the Black-Scholes valuation model as of each reporting period, including the date of issuance. To the extent the genetic testing services are successfully commercialized, the Company will owe certain royalty payments to MyOme. For the nine months ended September 30, 2026 and 2025, the royalties to MyOme were not material. As of September 30, 2026 and December 31, 2025, the Company’s carrying amount of preferred shares in MyOme was $16.7 million and $6.7 million, respectively, on its consolidated balance sheets. The fair market value of the warrants as of September 30, 2026 and December 31, 2025 was $20.0 million and $12.7 million, respectively, on the consolidated balance sheets.
Risk and Uncertainties
Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, and restricted cash, accounts receivable and investments. The Company limits its exposure to credit loss by placing its cash in financial institutions with high credit ratings. The Company’s cash may consist of deposits held with banks that may at times exceed federally insured limits. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution.
For the three and nine months ended September 30, 2026, and 2025, there were no customers exceeding 10% of total revenues on an individual basis. As of September 30, 2026 and December 31, 2025, there were no customers with an outstanding balance exceeding 10% of net accounts receivable.
For the three months ended September 30, 2026 and 2025, approximately 16.9 % and 13.6 %, respectively, of total revenue were paid by traditional Medicare on behalf of multiple customers. For the nine months ended September 30, 2026 and 2025, approximately 16.1 % and 13.9 %, respectively, of total revenue were paid by traditional Medicare on behalf of multiple customers. As of September 30, 2026 and December 31, 2025, approximately 13.6 % and 14.1 %, respectively, of accounts receivable are expected to be paid by traditional Medicare on behalf of multiple customers.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB under its accounting standard codifications or other standard setting bodies and adopted by the Company as of the specified effective date.
Recently Adopted Accounting Pronouncements
In July 2025, ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, was issued, which introduces a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. This update is effective for fiscal years beginning after December 15, 2025. Adoption of this standard occurred on January 1, 2026 and did not have a material impact on the Company’s consolidated financial statements.
New Accounting Pronouncements Not Yet Adopted
In November 2024, ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) was issued, which requires disaggregation of any relevant expense caption presented on the face of the condensed consolidated statements of operations and comprehensive loss for certain expense categories. The new guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.
In May 2025, ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810), Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, was issued, which revised current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a VIE that meets the definition of a business. The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. The amendments in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity
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interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this Update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.
In September 2025, ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software was issued, which amends the guidance in ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous "development stage" model and introducing a more judgment-based approach. This ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.
In September 2025, ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract” was issued. The new guidance excludes non-exchange-traded contracts with underlyings based on operations or activities specific to one of the parties to the contract from derivative accounting. This guidance is effective for fiscal years and interim periods beginning after December 15, 2026, with early adoption permitted. These requirements may be applied prospectively or on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.
3. Business Combination
Foresight Diagnostics, Inc.
On December 4, 2025, the Company completed the acquisition of all of the outstanding capital stock of Foresight Diagnostics, Inc. (“Foresight Diagnostics”), a leader in ultrasensitive molecular residual disease (“MRD”) detection. Foresight Diagnostics is a cancer diagnostics company and CLIA-registered laboratory. Their circulating tumor DNA (ctDNA)-based MRD tests leverage its patented PhasED-Seq™ technology, targeting phased variants. The acquisition was completed primarily to expand the Company’s intellectual property portfolio for tumor-informed and personalized MRD products including in phased variants and to build on Foresight’s clinical research momentum in B-cell lymphomas.
The total purchase consideration for the acquisition of Foresight Diagnostics was $424.5 million, which included the issuance of 1,127,982 shares of common stock, par value of $0.0001 per share, at a fair value based on the acquisition date closing price of $242.06 per share of the Company’s common stock. Former Foresight Diagnostics shareholders received 0.0280 shares of the Company’s common stock for each share of Foresight Diagnostics capital stock issued and outstanding as of immediately prior to the closing of the acquisition. Additionally, the Company assumed outstanding stock options of Foresight Diagnostics (“Assumed Options”). Each Assumed Option was converted into an option to purchase shares of the Company’s common stock based on the exchange ratio specified in the acquisition agreement. The Assumed Options generally retained their original vesting conditions, contractual terms, and expiration dates in effect immediately prior to the acquisition. In accordance with ASC 805, Business Combinations, and ASC 718, Compensation—Stock Compensation, the total fair value of the Assumed Options was allocated between pre-combination and post-combination service. The portion of the fair value attributable to pre-combination service was included in the total purchase consideration. The portion attributable to post-combination service was excluded from purchase consideration and will be recognized as stock-based compensation expense over the remaining requisite service period. The Company also assumed promised stock options to eligible Foresight employees which were converted, based on the exchange ratio specified in the acquisition agreement, to RSUs for shares of the Company’s common stock and granted upon closing of the acquisition. These equity awards were not included in the total purchase consideration.
Certain former Foresight Diagnostics employees are entitled to receive contingent consideration in the form of additional shares of the Company’s common stock in the aggregate amount of up to $175.0 million, based on the achievement of certain specified milestones. The Company measured the fair value on the acquisition date to be $123.9 million, of which $118.4 million was allocated to the consideration transferred, and $5.5 million was deemed compensatory as participation is dependent on post-combination service. Compensation expense will be recognized over the estimated service period. The Company recorded a $21.6 million current liability and $96.8 million long-term liability on the consolidated balance sheets as of the acquisition date. The Company determined the estimated fair value of (i) certain milestone payments using a Monte Carlo simulation, which requires the use of projected financial information and discount rates, and (ii) certain other milestone payments based on a probability weighted expected return method. The fair
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value of the contingent consideration will be remeasured each reporting period until the contingencies are settled, with changes in the fair value recognized within selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended September 30, 2026, the Company remeasured the fair value of the contingent consideration obligation and recorded an increase of $8.6 million and $10.7 million, respectively, to the contingent consideration obligation. The balance recorded as of September 30, 2026 was $45.9 million and $83.2 million as a current liability and noncurrent liability, respectively.
In connection with the acquisition, the Company deposited 9,505 shares having an aggregate value of $2.3 million in the escrow account for purchase price adjustments and deposited $1.0 million in an expense account for purposes of reimbursing the stockholder representative for expenses incurred related to the acquisition. Acquisition-related costs of $3.9 million were recorded in selling, general and administrative expenses on the condensed statements of operations and comprehensive loss and $0.1 million were recorded in additional paid in capital on the consolidated balance sheets during the year ended December 31, 2025. The assumed settlement of pre-existing relationships was determined based on the contractual amounts of payables and receivables between the parties as such amounts approximate fair value.
Certain working capital and tax accounts are subject to potential adjustment as the Company obtains additional information during the measurement period regarding new information obtained related to facts and circumstances that existed as of the acquisition date, not to exceed one year from the date of acquisition. After the measurement period, any subsequent adjustments will be reflected in the condensed consolidated statements of operations and comprehensive loss.
Subsequently, during the nine months ended September 30, 2026, the Company recorded immaterial measurement period adjustments. The related 1,087 escrow shares were returned to the Company in the second quarter of 2026.
The acquisition of Foresight Diagnostics has been accounted for using the acquisition method of accounting in accordance with authoritative guidance for business combinations, with Natera treated as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair value on the acquisition date.
The following table summarizes the fair value of consideration transferred and the fair values of the assets acquired and liabilities assumed:
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| (in thousands) | ||||||||
| Fair value of common stock issued to Foresight Diagnostics shareholders | $ | |||||||
| Pre-combination portion of Natera replacement equity awards | ||||||||
| Fair value of contingent consideration | ||||||||
| Estimated fair value of the adjustment escrow shares | ||||||||
| Stockholder representative allocable expenses | ||||||||
| Foresight Diagnostics’ transaction expenses settled by the Company | ||||||||
| Foresight Diagnostics’ indebtedness settled by the Company | ||||||||
| Settlement of preexisting relationships | ||||||||
| Cash payment for fractional shares | ||||||||
| Total Foresight Diagnostics consideration | $ | |||||||
| Cash and cash equivalents | $ | |||||||
| Current assets | ||||||||
| Property and equipment, net | ||||||||
| Goodwill | ||||||||
| Developed technology intangible asset | ||||||||
| Customer relationships intangible asset | ||||||||
| Trademarks / trade names intangible asset | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other assets | ||||||||
| Liabilities assumed | ( | |||||||
| Deferred tax liability | ( | |||||||
| Total purchase price | $ | |||||||
The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed was recorded as goodwill. Goodwill represents Foresight Diagnostics’ assembled workforce and expected synergies the Company believes will result from the acquisition. Goodwill is not deductible for tax purposes. The fair value of the finite-lived acquired developed technology intangible asset was determined using the multi-period excess earnings income approach. This approach determines fair value based on estimated cash flow projections which are discounted to present value using a risk-adjusted rate of return. Management’s estimated cash flow projections include significant assumptions, including forecasted clinical revenue and related growth rate. The discount rate used to determine the fair value of the developed technology was 12 %.
Pro forma information and results of Foresight Diagnostics since acquisition date have not been presented, as the results of Foresight Diagnostics are not material in relation to the consolidated financial statements of the Company.
4. Revenue Recognition
The Company recognizes revenues when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers.
Product Revenues
The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods and services. Under ASC 606—Revenue from Contracts with Customers ("ASC 606"), the Company applies the following five-step approach:
•Identify the contract with a customer
•Identify the performance obligations in the contract
•Determine the transaction price
•Allocate the transaction price to the performance obligations in the contract
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•Recognize revenue when, or as, a performance obligation is satisfied
The Company generates revenue primarily from genetic testing services, which are delivered to a clinic or patient (each a customer) that requests a test service through their physician. Test results are the single performance obligation being provided to customers. Testing service revenue is recognized at a point in time when test results are delivered to the ordering physician or clinician. The Company generally bills an insurance carrier, Medicaid, Medicare, the patient, or a combination upon delivery of test results.
For tests requested directly from a clinic, the Company bills the clinic directly.
The Company generally enters into contracts with third-party payors, including insurance carriers, Medicaid and Medicare, to set the pricing for tests provided to patients. Due to the nature of these third-party payor contract arrangements, the total consideration the Company expects to collect for test results is variable as it is dependent on the terms negotiated with the third-party payor which would include test coverage, patients co-pays and deductibles, billing compliance requirements, among other factors. The predominance of the Company’s revenue is derived from payments by third-party insurance carriers. The consideration expected to be received from clinics is generally a fixed amount based on contractual pricing agreements.
The Company uses the expected value method of estimating variable consideration expected to be received from both patients and third-party payors. The total consideration the Company expects to collect in exchange for the Company’s products is an estimate and is largely variable in nature. In establishing variable consideration, the Company considers test types with similar reimbursement characteristics together. The Company initially determines variable consideration by considering historical payment trends for tests delivered, test reimbursement disallowances, and contractual arrangements in place, among other factors, which is further adjusted for current expectations, as determined necessary. Current expectations of cash collections factor in changes in reimbursement rate trends, historical events not expected to recur, and future known changes such as anticipated contractual pricing changes or changes to insurance coverage.
Because reimbursement is received over an extended collection period, management reassesses its estimates of expected cash collections each reporting period as additional collection experience becomes available. These reassessments are based on updated historical collection trends and current information and may result in increases or decreases to the amount of revenue recognized for tests delivered in prior periods.
The Company considers hindsight, where applicable, in estimates established for variable consideration and monitors and updates those estimates when actual experience supports doing so. The risk of material reversal of revenue is generally due to payors’ disallowance of test reimbursements, special contractual arrangements, eligibility, patient co-pays and responsibilities, among other factors. The Company monitors the cash collections against the estimated variable consideration over the expected cash collection period. To the extent the Company establishes it is probable that there is no longer a risk of material reversal in the amount of cumulative revenue recognized, any cash collections in excess of initial estimates of variable consideration are recognized as an adjustment to estimated revenues, with a corresponding adjustment to accounts receivable or contract assets. Approximately 85 % - 90 % of cash collections attributable to such product revenue occurs within six months , with the remaining collections generally taking an additional three months .
During the three months ended September 30, 2026 and 2025, the Company increased revenue by a net of $32.3 million and $55.1 million, respectively, related to changes in estimate that increased revenue for tests delivered in prior periods as it was deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which increased revenue and decreased net loss by a corresponding amount and decreased loss per share by $0.22 and $0.40 for the three months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026 and 2025, the Company increased revenue by a net of $145.6 million and $134.7 million, respectively, related to changes in estimate that increased revenue for tests delivered in prior periods as it was deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which increased revenue and decreased net loss by a corresponding amount and decreased loss per share by $1.02 and $0.99 for the nine months ended September 30, 2026 and 2025, respectively.
Licensing and Other Revenues
The Company recognizes licensing revenues from its cloud-based distribution service offering, Constellation, by granting licenses to its licensees to use certain of the Company’s proprietary intellectual properties and cloud-based software and in vitro diagnostic (“IVD”) kits. The Company also recognizes revenues from its strategic collaboration agreements, such as those with BGI Genomics Co., Ltd. (“BGI Genomics”). The Company recognizes licensing and other
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revenues through agreements with pharmaceutical companies in support of potential clinical trials managed by the pharmaceutical companies, data analytics, and research assistance.
Constellation
The laboratory partners with whom the Company enters into a licensing arrangement represent the licensees and are identified as customers. The licensees do not have the right to possess the Company’s software, but rather receive services through the cloud software. These arrangements often include: (i) the delivery of the services through the cloud software, (ii) the necessary support and training, and (iii) the IVD kits to be consumed as tests are processed. The Company does not consider the software as a service, the support or the training as being distinct in the context of such arrangements, and therefore, they are combined as a single performance obligation. The software, support and training are delivered simultaneously to the licensees over the term of the arrangement.
The Company bills the majority of licensees, who process the tests in their laboratories, a fixed price for each test processed. Licensing revenues are recognized as the performance obligations are satisfied (i.e., upon the delivery of each test result) and reported in licensing and other revenues in the Company’s condensed consolidated statements of operations and comprehensive loss.
BGI Genomics
In February 2019, the Company entered into a License Agreement (the “BGI Genomics Agreement”) with BGI Genomics to develop, manufacture, and commercialize next generation sequencing-based genetic testing assays for clinical and commercial use. The BGI Genomics Agreement has a term of ten years and expires in February 2029. Pursuant to the BGI Genomics Agreement, the Company licensed its intellectual property to and provided development services for BGI Genomics. Following completion of development services, the Company began providing assay interpretation services over the term of the agreement.
The Company has a single remaining performance obligation related to oncology assay interpretation services to be provided to BGI Genomics, to which $20.0 million of transaction consideration was allocated and prepaid by BGI Genomics. During the nine months ended September 30, 2026, the Company recognized $0.6 million related to oncology assay interpretation services which was recognized against deferred royalties. During the nine months ended September 30, 2025, the Company recognized $0.4 million related to oncology assay interpretation services which was recognized against deferred royalties. The Company has $16.3 million and $16.8 million in deferred revenue related to the BGI Genomics Agreement as of September 30, 2026 and December 31, 2025, respectively.
Disaggregation of Revenues
The following table shows disaggregation of revenues by payer types:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Insurance carriers | $ | $ | $ | $ | |||||||||||||||||||
| Laboratory partners | |||||||||||||||||||||||
| Patients | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
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The following table presents total revenues by geographic area based on the location of the Company’s payers:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Americas, excluding U.S. | |||||||||||||||||||||||
| Europe, Middle East, India, Africa | |||||||||||||||||||||||
| Asia Pacific and Other | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
The following table summarizes the changes in the balance of deferred revenues during the nine months ended September 30, 2026 and 2025:
| Balance at September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Beginning balance | $ | $ | |||||||||
| Increase in deferred revenues | |||||||||||
| Revenue recognized during the period included in deferred revenues at the beginning of the period | ( | ( | |||||||||
| Revenue recognized from performance obligations satisfied within the same period | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
5. Fair Value Measurements
The Company’s financial assets and liabilities carried at fair value are comprised of investment assets that include cash, cash equivalents, restricted cash, warrants and contingent consideration.
The fair value accounting guidance requires that assets and liabilities be carried at fair value and classified in one of the following three categories:
Level I: Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access;
Level II: Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves; and
Level III: Inputs that are unobservable data points that are not corroborated by market data.
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
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Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis
The following table represents the fair value hierarchy for the Company’s financial assets and financial liabilities measured at fair value on a recurring basis:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash (1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Warrants | |||||||||||||||||||||||||||||||||||||||||||||||
| Total financial assets | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Total contingent consideration(2) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1)Cash equivalents includes money market deposits and liquid demand deposits.
(2)As of September 30, 2026, contingent consideration includes $45.9 million classified as current and $83.2 million classified as non-current. As of December 31, 2025, contingent consideration includes $21.6 million classified as current and $96.8 million classified as non-current.
The MyOme warrants issued to the Company are accounted for as derivatives and recorded at fair value on a recurring basis and are classified within Level III of the fair value hierarchy because the valuation methods include certain unobservable inputs.
Contingent Consideration Liabilities
The following table provides a reconciliation of the beginning and ending balances of contingent consideration:
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, 2026 | ||||||||||||||
| (in thousands) | ||||||||||||||
| Beginning balance | $ | $ | ||||||||||||
Changes in fair value(1) | ||||||||||||||
Post-combination vesting(2) | ||||||||||||||
| Total | $ | $ | ||||||||||||
(1) The changes in fair value of the contingent consideration liability were recorded in selling, general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.
(2) Post-combination vesting was recorded to stock-based compensation expense and classified in the condensed consolidated statement of operations and comprehensive loss based on the underlying employees' functional categories.
The Company measured the fair value of the contingent consideration obligation resulting from its acquisition of Foresight Diagnostics on the December 4, 2025 acquisition date using significant unobservable inputs, classified as Level III. See Note 3, Business Combination. There were no significant changes in the fair value of the contingent consideration obligation as of December 31, 2025. Each reporting period thereafter, these obligations are revalued and changes in their fair values are recorded as selling, general, and administrative expenses, net within the condensed consolidated statements of operations and comprehensive loss. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the estimated or actual achievement of the defined milestones. Judgment is required in determining the appropriateness of these assumptions as of the acquisition date and for
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each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the fair value of the contingent consideration obligation.
Fair Value of Short-Term and Long-Term Debt
As of September 30, 2026 and December 31, 2025, the estimated fair value of the total principal outstanding and accrued interest of the Credit Line was $80.3 0.5
6. Goodwill and Intangible Assets
Goodwill
On December 4, 2025, upon the acquisition of Foresight Diagnostics the Company recorded $141.1 million of goodwill. See Note 3, Business Combination, for additional information. During the three and nine months ended September 30, 2026, the Company recorded immaterial no
Intangible Assets
The Company’s finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from 3 to 15 years. Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Intangible assets are comprised of the following:
| September 30, | December 31, | |||||||||||||||||||||||||
| Useful Life | 2026 | 2025 | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Developed technology | $ | $ | ||||||||||||||||||||||||
| Customer relationships | ||||||||||||||||||||||||||
| License and trademarks | ||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||
| Less: Accumulated amortization | ( | ( | ||||||||||||||||||||||||
| Total intangible assets, net | $ | $ | ||||||||||||||||||||||||
Amortization expense related to acquired intangible assets for the three and nine months ended September 30, 2026 were $5.7 million and $17.1 million, respectively. The Company had no 1.4 million and $4.3 million, respectively. Amortization expense related to other intangible assets for the three and nine months ended September 30, 2025 was immaterial
The estimated future aggregate amortization expense as of September 30, 2026 is as follows:
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| (in thousands) | |||||||||||
| Year ending December 31: | |||||||||||
| 2026 (remaining 3 months) | $ | ||||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| 2031 and thereafter | |||||||||||
| Total | $ | ||||||||||
7. Financial Instruments
The Company elected to invest a portion of its cash assets in conservative, income-earning, and liquid investments. Cash, cash equivalents, and restricted cash consisted of the following:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash (1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1)Cash equivalents includes liquid demand deposits and money market funds.
The Company invests in U.S. Treasuries, U.S. agency and high-quality municipal bonds which mature at par value and are all paying their coupons on schedule. The Company has therefore concluded an allowance for expected credit losses of its investments was not necessary and will continue to recognize unrealized gains and losses in other comprehensive income (loss). During the nine months ended September 30, 2026 and 2025, the Company did not sell any investments. The Company uses the specific investment identification method to calculate realized gains and losses and amounts reclassified out of other comprehensive income (loss) to net loss. As of September 30, 2026 and December 31, 2025, the Company did not hold any investments. Accordingly, the Company did not
8. Balance Sheet Components
Allowance for Expected Credit Losses
The following is a roll-forward of the allowances for expected credit losses related to trade accounts receivable for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Beginning balance | $ | $ | |||||||||
| Provision for (reversal of) expected credit losses | ( | ||||||||||
| Write-offs | ( | ||||||||||
| Total | $ | $ | |||||||||
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| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Beginning balance | $ | $ | |||||||||
Provision for (reversal of) expected credit losses | ( | ||||||||||
| Write-offs | ( | ( | |||||||||
| Total | $ | $ | |||||||||
Property and Equipment, net
The Company’s property and equipment consists of the following:
| Useful Life | September 30, 2026 | December 31, 2025 | ||||||||||||
| (in thousands) | ||||||||||||||
| Machinery and equipment | $ | $ | ||||||||||||
| Computer equipment | ||||||||||||||
| Purchased and capitalized software held for internal use | ||||||||||||||
| Leasehold improvements | Lesser of useful life or lease term | |||||||||||||
| Construction-in-process | ||||||||||||||
| Other property and equipment | ||||||||||||||
| Less: Accumulated depreciation and amortization | ( | ( | ||||||||||||
| Total property and equipment, net | $ | $ | ||||||||||||
The Company’s long-lived assets are principally located in the United States.
The Company did not 14.7 million and $9.3 million, respectively. Depreciation expense for the nine months ended September 30, 2026 and 2025 was $40.4 million and $26.4 million, respectively.
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Other Accrued Liabilities
The Company’s other accrued liabilities consisted of the following:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Legal, audit and consulting fees | $ | $ | |||||||||
| Testing and laboratory materials from suppliers | |||||||||||
| Clinical trials and studies | |||||||||||
| Marketing and corporate affairs | |||||||||||
| Property and equipment purchases | |||||||||||
| Accrued charges for third-party testing | |||||||||||
| Operating lease liabilities, current portion | |||||||||||
| Accrued third-party service fees | |||||||||||
| Reserves for refunds to insurance carriers | |||||||||||
| Sales and income tax payable | |||||||||||
| Accrued shipping charges | |||||||||||
| Other accrued expenses | |||||||||||
| Total other accrued liabilities | $ | $ | |||||||||
9. Leases
In September 2015, the Company entered into a long-term lease agreement for laboratory and office space totaling approximately 94,000 square feet in Austin, Texas. The original lease term was 132 months beginning in December 2015 and expiring in November 2026, with monthly payments beginning in December 2016. In December 2021, the Company entered into an amendment of the Austin lease agreement, which extended the lease of the current premises through March 2033. The amendment also includes two additional office spaces (the “First Expansion Premises” and the “Second Expansion Premises”). The First Expansion Premises consists of 32,500 rentable square feet and commenced in February 2022. The Second Expansion Premises consists of 65,222 rentable square feet and commenced in September 2022. The terms of the First and Second Expansion Premises expire in March 2033. In March 2025, the Company entered into a lease agreement for additional premises of approximately 57,100 rentable square feet in Austin, Texas through March 2033 with an annual rent expense of approximately $0.9 million. In August 2025, the Company entered into a lease agreement for additional premises of approximately 45,800 rentable square feet in Austin, Texas through March 2033 with an annual rent expense of approximately $0.7 million. In December 2025, the Company exercised its expansion right for an additional premises of approximately 28,468 rentable square feet in Austin, Texas through March 2033 with an annual rent expense of approximately $0.4 million.
In October 2016, the Company entered into a lease directly with its landlord for laboratory and office spaces at its facilities located in San Carlos, California. The Company currently occupies approximately 136,300 square feet comprised of two office spaces (the “First Space” and the “Second Space”). The First Space covers approximately 88,400 square feet, and the Second Space totals approximately 47,900 square feet. In January 2021, the Company entered into an amendment of the lease to extend the term for 48 months to October 2027. In July 2024, the Company entered into an amendment of the San Carlos lease to extend the term for 60 months to October 2032. The annual rent will be approximately $9.7 million beginning January 2025, escalating annually and may be increased if the Company elects to utilize additional tenant improvement allowances. In January 2025, the Company entered into a lease agreement for additional premises of approximately 40,700 rentable square feet in San Carlos, California, through November 2028 with an annual rent expense of approximately $1.5 million. In January 2026, the Company entered in a lease for an additional premises in San Carlos, California which occupies approximately 63,000 square feet with a lease term of ten years . Subject to certain requirements, the annual rent payment starts in May 2028 at approximately $4.4 million per year and escalates annually. In July 2026, the Company entered into a lease for additional premises in San Carlos, California, which occupies approximately 15,600 square feet with a lease term of ten years . The annual base rent started in August 2026 at approximately $0.4 million per year and escalates annually.
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The Company entered into a lease agreement in November 2020 to lease 11,395 square feet of space located in South San Francisco, California over a 36 -month term. The premises are used for general office, laboratory and research use. The annual lease payment started at $0.9 million and escalates annually after commencing in December 2021. In December 2022, the Company exercised the renewal option of the South San Francisco lease agreement. In January 2023, the Company entered in an amendment to extend the lease term of the South San Francisco premises by three years , through November 2026. In March 2025, the Company entered into a lease agreement to expand its existing space in South San Francisco by approximately 19,715 square feet. The lease commenced in April 2025. The annual lease payment started at $0.4 million per year and escalates annually over the approximately seven-year lease term through December 2031. In May 2026, the Company entered into a lease agreement to expand its existing space by approximately 19,652 square feet. The lease commenced in June 2026. The annual lease payment starts at $0.5 million per year and escalates annually over the approximately five-year lease term through August 2031.
The Company entered into a lease agreement in September 2023 to lease 16,319 square feet of space located in Pleasanton, California over a 60 -month term. The premises are used for laboratory and research use and commenced in December 2023. In December 2025, the Company entered in an amendment to extend the existing premises and expand to an additional premises of 15,485 rentable square feet in Pleasanton, California through March 2034. The combined annual lease payment started at $0.9 million and escalates annually.
In December 2025, as part of the business combination, the Company assumed a lease agreement for approximately 25,718 square feet of space located in Boulder, Colorado. The premises are used for general office, laboratory, and research use. The lease term extends through June 2034, and the annual lease payments commence at approximately $1.5 million and escalate annually.
The Company has also historically entered into leases of individual workspaces and storage spaces at various locations on both a month-to-month basis without an established lease term and, more recently for certain locations, has committed to terms approximating to five years . For the facilities without a committed lease term, the Company has elected to not recognize them as right-of-use assets on the consolidated balance sheets as they are all considered short-term leases. For individual workspaces where the committed lease term exceeds one year, the Company has recorded a right-of-use asset on the consolidated balance sheets.
For the nine months ended September 30, 2026, the Company had $34.6 million in noncash operating activities related to additional right-of-use assets resulting from entering into new lease agreements and extension of existing leases under ASC, Topic 842, Leases (“ASC 842”). For the nine months ending September 30, 2025, the Company had $19.8 million in noncash operating activities related to additional right-of-use assets.
The operating lease right-of-use assets are classified as noncurrent assets in the consolidated balance sheets. The corresponding lease liabilities are separated into current and long-term portions as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Operating lease liabilities, current portion included in other accrued liabilities | $ | $ | |||||||||
| Operating lease liabilities, long-term portion | |||||||||||
| Total operating lease liabilities | $ | $ | |||||||||
As of September 30, 2026, the weighted-average remaining lease term was 6.86 years and the weighted-average discount rate was 6.6 %.
The Company continues to recognize lease expense on a straight-line basis. The lease expense includes the amortization of the right-of-use assets with the associated interest component estimated by applying the effective interest method. For the three months ended September 30, 2026 and 2025, total lease expense of $7.1 million and $5.5 million was recognized in the condensed consolidated statements of operations and comprehensive loss, respectively. For the nine months ended September 30, 2026 and 2025, total lease expense of $20.4 million and $14.8 million was recognized in the condensed consolidated statements of operations and comprehensive loss, respectively. Cash paid for settlement of operating lease liabilities totaled $18.3 million and $14.2 million for the nine months ended September 30, 2026 and 2025, respectively.
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The present value of the future minimum lease payments under all non-cancellable operating leases as of September 30, 2026 are as follows:
| Operating Leases | |||||
| (in thousands) | |||||
| As of September 30, 2026 | |||||
| 2026 (remaining 3 months) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 and thereafter | |||||
| Total future minimum lease payments | |||||
| Less: imputed interest | ( | ||||
| Operating lease liabilities | $ | ||||
10. Commitments and Contingencies
Legal Proceedings
The Company is or has been involved in legal matters, including investigations, subpoenas, demands, disputes, litigation, requests for information, and other regulatory or administrative actions or proceedings, including those with respect to intellectual property, testing and test performance, billing, reimbursement, marketing, short seller and media allegations, employment, and other matters. The Company is responding to ongoing regulatory and governmental investigations, subpoenas and inquiries, and contesting its current legal matters, but cannot provide any assurance as to the ultimate outcome with respect to any of the foregoing. There are many uncertainties associated with these matters.
The Company assesses legal contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. When evaluating legal contingencies, the Company may be unable to provide a reasonable estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation or other matters may be unsupported, exaggerated or unrelated to possible outcomes, and as such are not meaningful indicators of its potential liability. Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. As of September 30, 2026 and December 31, 2025, the aggregate accrual for legal contingencies that are probable and reasonably estimable is approximately $17.1 million and $32.6 million, respectively. The Company is unable to predict the ultimate outcome of the matters described below and is unable to make a reasonable estimate of the amount or range of loss, if any, that could result from an unfavorable outcome of any such matter in excess of any amounts accrued.
Intellectual Property Litigation Matters
The Company has been involved in two patent litigations against CareDx, Inc. (“CareDx”) in the United States District Court for the District of Delaware (“CareDx Patent Cases”). In the first CareDx Patent Case, CareDx alleged, in a complaint filed jointly with the Board of Trustees of the Leland Stanford Junior University in March 2019 and amended in March 2020, that the Company infringed three patents (the “CareDx Patents”). The complaint sought unspecified damages and injunctive relief. In September 2021, the Court granted the Company’s motion for summary judgment, finding all three CareDx Patents invalid. This finding was affirmed on appeal by the United States Court of Appeals for the Federal Circuit. CareDx’s petition for rehearing by the Federal Circuit, and its subsequent petition for certiorari to the United States Supreme Court, were both denied. In the second CareDx Patent Case, the Company alleged, in suits filed in January 2020 and May 2022, infringement by CareDx of certain of the Company’s patents, seeking unspecified damages and injunctive relief. In January 2024, after trial, the jury returned a verdict in favor of the Company, finding both asserted patents valid and one patent infringed by CareDx (the “Infringed Patent”) and awarding damages to the Company for lost profits and past royalties totaling $96.3 million. In February 2025, the Court granted CareDx’s motion for judgment as a matter of law and invalidated both asserted Natera patents, including the Infringed Patent. The Company filed a notice of appeal to the Court of Appeals for the Federal Circuit in March 2025 and the appeal is proceeding. Separately, in October 2024, an ex-
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parte re-examination petition was filed by CareDx with the United States Patent and Trademark Office (“USPTO”) challenging the validity of the Infringed Patent; but the USPTO ultimately denied the petition and upheld the challenged claims of the Infringed Patent. In June 2025, another ex-parte re-examination petition challenging the validity of the ‘724 Patent was filed with the USPTO, which issued a non-final office action in December 2025, and rejected the petition in May 2026.
In January 2020, the Company filed suit against ArcherDX, Inc. (“ArcherDX”) in the United States District Court for the District of Delaware. In January 2021, the Company named an additional Archer DX entity, ArcherDx LLC, and Invitae as defendants. The Company alleged, among other things, that certain ArcherDX products, including the Personalized Cancer Monitoring (“PCM”) test, infringed three of the Company’s patents (the “ArcherDX Case”) and sought unspecified monetary damages and injunctive relief. Following a jury trial in May 2023 and a bench trial in June 2023, all three asserted patents were found to be valid and infringed by ArcherDX and Invitae, and the jury awarded damages totaling $19.4 million to the Company. In November 2023, the Court granted in part the Company’s motion for a permanent injunction against the PCM test, which the defendants have appealed. In February 2024, Invitae and ArcherDX filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of New Jersey, resulting in an automatic bankruptcy stay in the case. The stay was lifted, and post-trial proceedings resumed, in November 2024. Defendants’ interim appeals remain stayed pending the Court’s final resolution of the post-trial motions. In April 2026, the Court granted defendants’ motion in part by eliminating damages associated with certain non-PCM products, reducing the prior damages award by approximately $10.0 million; the Court also awarded the Company approximately $1.23 million in supplemental pre-verdict damages for PCM products, pre- and post-judgment interest, and imposed an ongoing royalty of 30 % on revenues from defendants’ post-judgment use of the adjudicated PCM products. The Company and Invitae have filed a notice of appeal to the Third Circuit Court of Appeals.
The Company is the subject of a lawsuit filed against it by Ravgen, Inc. (“Ravgen”) in June 2020 in the United States District Court for the Western District of Texas, alleging infringement of two Ravgen patents and seeking monetary damages and injunctive relief. In January 2024, after trial, the jury returned a verdict of non-willful infringement by the Company and found damages of $57.0 million. In March 2026, judgment was entered by the Court. The Company has filed a notice of appeal with respect to certain of the rulings. In addition, various parties, including the Company, have filed petitions challenging the validity of the asserted patents with the United States Patent and Trademark Office, all of which were instituted for review, and some of which were decided in favor of upholding the challenged claims. The petitions filed by the Company and certain others remain pending.
In October 2020, the Company filed suit against Genosity Inc. (“Genosity”), in the United States District Court for the District of Delaware, alleging that various Genosity products infringe one of the Company’s patents and seeking unspecified monetary damages and injunctive relief. The case has been stayed pending the entry of a final judgment in the ArcherDX Case, in which the subject patent is also asserted. In February 2024, Genosity filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of New Jersey.
The Company was the subject of lawsuits filed against it by Invitae in the United States District Court of the District of Delaware alleging, in complaints filed in May and November of 2021, infringement of three patents and seeking monetary damages and injunctive relief. In February 2024, as a result of Invitae’s voluntary Chapter 11 petition described above, the Court continued the trial to September 2025. Labcorp Holdings Inc. (“LabCorp”) subsequently acquired the patents at issue in this case and substituted in as the plaintiff. In September 2025, the Company and LabCorp settled the case.
The Company filed suits against Inivata, Inc. and Inivata Ltd. (collectively “Inivata”) in the United States District Court for the District of Delaware in January 2021 and December 2022, alleging that certain of Inivata’s oncology products infringe certain of the Company’s patents and seeking unspecified monetary damages and injunctive relief. The two suits were consolidated. In March 2024, the Court stayed the case in light of the Company’s case against NeoGenomics Laboratories, Inc. (“NeoGenomics”), which acquired Inivata in 2021, discussed below. In October 2025, the Company voluntarily dismissed the December 2022 suit without prejudice. In February 2026, the January 2021 suit was dismissed.
In July 2023, the Company filed suit against NeoGenomics in the United States District Court for the Middle District of North Carolina (the “District Court”), alleging infringement of two Natera patents (the “’035 Patent” and the “’454 Patent”) by NeoGenomics’ commercialization of the RaDaR test and seeking monetary damages and injunctive relief. In December 2023, the Court denied NeoGenomics’ motion to dismiss the complaint, and granted the Company’s motion for preliminary injunction. The injunction went into effect as of January 12, 2024 and was affirmed on appeal in July 2024 by the Federal Circuit Court of Appeals. NeoGenomics filed a petition with the USPTO to review the validity of the ’454 Patent, which was denied in June 2024. NeoGenomics also filed a petition with the USPTO to review the validity
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of the ‘035 Patent, which proceeding was terminated in October 2024. Pursuant to the terms of a partial settlement of the case, the District Court entered a permanent injunction against NeoGenomics, and it has withdrawn its RaDaR test from the market. The case remained pending with respect to an updated version of the RaDaR test and the ‘454 Patent, as well as an additional Natera patent (the “596 patent”) that was added to the case in December 2024. In August 2025, the Court granted summary judgment of invalidity of the ‘454 Patent and the ‘596 Patent, and final judgment in favor of NeoGenomics was entered in September 2025. Neogenomics has filed an inter partes review challenging the validity of the ‘596 patent. The USPTO declined to institute a review and dismissed the challenge to the ‘596 patent.
Other Litigation Matters
CareDx filed suit against the Company in April 2019 in the United States District Court for the District of Delaware, alleging false advertising, and related claims based on statements describing studies that concern the Company’s technology and CareDx’s technology, seeking unspecified damages and injunctive relief. The Company filed a counterclaim against CareDx in the United States District Court for the District of Delaware, alleging false advertising, unfair competition and deceptive trade practices and seeking unspecified damages and injunctive relief. In March 2022, after trial, the jury returned a verdict that the Company was liable to CareDx and found damages of $44.9
The Company has been involved in two lawsuits against Guardant Health, Inc. (“Guardant”). In May 2021, Guardant filed suit against the Company in the United States District Court of the Northern District of California alleging false advertising and related claims and seeking unspecified damages and injunctive relief. Also in May 2021, the Company filed suit against Guardant in the Western District of Texas, alleging false advertising and related claims. The Company has voluntarily dismissed its Texas suit against Guardant and has asserted the claims from the Texas action as counterclaims in the California action, seeking unspecified damages and injunctive relief. In August 2021, Guardant moved to dismiss the Company’s counterclaims, which motion was denied in all material respects. Both parties filed cross-motions for summary judgment, which were granted in part and denied in part. In November 2024, after trial, the jury returned a verdict finding the Company liable for false advertising and found damages of $292.5 million. In July 2025, the Court entered a final order regarding the parties’ post-trial motions, which largely upheld the jury verdict. A final judgment was entered in June 2026. The Company is appealing the judgment to the Ninth Circuit Court of Appeals. In February 2025, Guardant filed suit against the Company and two of its former employees who recently joined the Company in the United States District Court for the Northern District of California, alleging trade secret misappropriation, breach of contract and related tort claims, seeking unspecified damages and injunctive relief. Concurrently with the filing of the complaint, Guardant also moved for a temporary restraining order and expedited discovery, which motions Guardant subsequently withdrew. In April 2025, Guardant voluntarily dismissed its claims against the Company and the employee defendants without prejudice.
In November 2021, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of California, by a patient alleging various causes of action relating to the Company’s patient billing and seeks, among other relief, class certification, injunctive relief, restitution and/or disgorgement, attorneys’ fees, and costs. In May 2023, the Court granted the Company’s motion to dismiss the lawsuit, and the case was dismissed without prejudice. In July 2023, the plaintiff filed analogous claims in the Superior Court of California, County of San Mateo, and subsequently filed an amended claim with an additional plaintiff. Based on the additional plaintiff, the case was transferred back to the United States District Court for the Northern District of California. The parties subsequently agreed that claims brought by the original plaintiff be remanded back to the Superior Court of California, County of San Mateo, and that the action be stayed pending the outcome of the action in the United States District Court for the Northern District of California. In August 2026, the Court granted preliminary approval of a settlement resolving these matters.
In February 2022, two purported class action lawsuits were filed against the Company in the United States District Court for the Northern District of California. Each suit was filed by an individual patient alleging various causes of action related to the marketing of Panorama and seeking, among other relief, class certification, monetary damages, attorneys’ fees, and costs. These matters have been consolidated. The Company filed a motion to dismiss the consolidated lawsuit, which resulted in the plaintiffs filing an amended complaint in April 2023. The Company and the plaintiffs have reached a settlement of all claims. The proposed settlement has been submitted to the District Court for final approval, and class notices were sent to class members in January 2026.
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In March 2022, a purported class action lawsuit was filed against the Company and certain of its management in the Supreme Court of the State of New York, County of New York, asserting claims under Sections 11, 12, and 15 of the Securities Act of 1933. The complaint alleged, among other things, that the Company failed to disclose certain information regarding its Panorama test. The complaint sought, among other relief, monetary damages, attorneys’ fees, and costs. This matter was dismissed and the claims raised in this matter have been included in the lawsuit discussed below.
A purported class action lawsuit was filed against the Company and certain of its management in the United States District Court for the Western District of Texas, asserting claims under Sections 10(b) and 20(a) of the Securities Act of 1934 and Rule 10b-5 thereunder. The complaint, filed in April 2022 and amended in October 2022 (to include, among others, the claims raised in the lawsuit discussed in the preceding paragraph), alleges, among other things, that the management defendants made materially false or misleading statements, and/or omitted material information that was required to be disclosed, about certain of the Company’s products and operations. The complaint seeks, among other relief, monetary damages, attorneys’ fees, and costs. The Company filed a motion to dismiss this lawsuit, which was granted in part and denied in part. The Court has certified the class.
In each of October 2023 and January 2024, shareholder derivative complaints were filed in the United States District Court for the Western District of Texas and the United States District Court for the District of Delaware, respectively, against the Company as nominal defendant and certain of the Company’s management. Each complaint alleges, among other things, that the management defendants made materially false or misleading statements, and/or omitted material information that was required to be disclosed, about certain of the Company’s products and operations. Each complaint seeks, among other relief, monetary damages, attorneys’ fees, and costs.
In October 2024, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of California, by patients alleging various causes of action relating to the Company’s preimplantation genetic test for aneuploidies. They request, among other relief, class certification, injunctive relief, restitution and/or disgorgement, attorneys’ fees, and costs. The Company filed a motion to dismiss the lawsuit, which was granted in August 2025, and the case was dismissed without prejudice. In August 2025, the plaintiffs filed an amended complaint. An almost identical complaint was filed with the same court in June 2026, and has been consolidated with the existing action.
In August 2026, a putative class action was filed against the Company and Baylor Genetics (“Baylor”) in the United States District Court for the Northern District of California on behalf of certain patients whose testing was ordered through the Company, asserting claims for negligence, breach of implied contract, unjust enrichment, and violation of the California Confidentiality of Medical Information Act (“CMIA”), as a result of a cybersecurity incident experienced by Baylor in June 2026 (the “Baylor Incident”). A second putative class action was filed against the Company in August 2026 in the same court on behalf of patients whose information was allegedly affected by the Baylor Incident, asserting claims for negligence, breach of implied contract, unjust enrichment, and violations of the CMIA, the California Unfair Competition Law, and the California Consumer Legal Remedies Act. The complaints seek, among other relief, class certification, actual, statutory and nominal damages, restitution, injunctive relief, and attorneys’ fees and costs. In September 2026, the Company tendered the defense of both actions to Baylor and demanded indemnification under the parties’ Laboratory Services Agreement.
Indemnifications
As permitted under Delaware law, and as set forth in the Company’s Amended and Restated Certificate of Incorporation and its Amended and Restated Bylaws, the Company indemnifies its directors, executive officers, other officers, employees and other agents for certain events or occurrences that may arise while in such capacity. In addition, agreements entered into by the Company may include indemnification provisions that may subject the Company to costs and damages in the event of a claim against an indemnified third party.
The maximum potential future payments the Company could be required to make under these indemnifications is unlimited; however, the Company has insurance policies and indemnification agreements that may limit its exposure and may enable it to recover a portion of any future amounts paid. Assuming the applicability of coverage, the willingness of the insurer or partner to assume coverage, and subject to certain retention, loss limits and other policy provisions, the Company believes that it is not probable that any obligations under this indemnification would be material, or in excess of any recorded accruals.
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No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case the Company may incur substantial liabilities as a result of these indemnification obligations.
Third-Party Payer Reimbursement Audits
From time to time, the Company receives recoupment requests from third-party payers for alleged overpayments. The Company disagrees with the contentions of pending requests and/or has recorded an estimated reserve for the alleged overpayments if probable and estimable.
Contractual Commitments
The following table sets forth the Company’s material contractual commitments as of September 30, 2026:
| Party | Commitments | Expiry Date | |||||||||
| (in thousands) | |||||||||||
| Laboratory instruments supplier | $ | December 2027 | |||||||||
| Material suppliers | November 2030 | ||||||||||
| Application service providers | February 2034 | ||||||||||
| Cloud platform service provider | March 2029 | ||||||||||
| Other material suppliers | Various | ||||||||||
| Total | $ | ||||||||||
In conjunction with the Company’s acquisition of Foresight Diagnostics, the Company may also be required to pay up to $175.0 million to the former holders of Foresight Diagnostic’s outstanding equity interests, subject to the achievement of certain milestones. As of September 30, 2026 and December 31, 2025, the Company recognized a $129.1 million and $118.4 million in contingent consideration liability based on the fair value of the contingent consideration. Payments will be settled in shares of the Company’s common stock and are estimated to occur through 2028. See Note 3, Business Combination, for additional information.
In January 2024, the Company acquired from Invitae Corp. (“Invitae”) certain assets relating to Invitae’s non-invasive prenatal screening and carrier screening business. The transaction price of $10.5 million consisted of $10.0 million in upfront payment costs and approximately $0.5 million of other transaction costs which were capitalized as intangible assets over an estimated useful life of ten years . An additional payment of up to $42.5 million may be made should the Company achieve certain customer volume retention targets and based on certain legal outcomes.
During November 2024, the Company entered into an agreement to acquire clinical samples and data for oncology development. As of September 30, 2026, the Company has paid $17.0 million in cash, has recorded a payable for $4.9 million, and is committed to an additional $0.1 million, which is included in commitments above. An additional $48.0 million in potential payments owed to the third-party vendor, not included above, will depend on whether certain approvals are obtained and commercial volume milestones are achieved.
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11. Stock-Based Compensation
Stock-Based Compensation Expense
The following table presents stock-based compensation expense recorded in the three and nine months ended September 30, 2026 and 2025.
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Cost of revenues | $ | $ | |||||||||
| Research and development | |||||||||||
| Selling, general and administrative | |||||||||||
| Total | $ | $ | |||||||||
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Cost of revenues | $ | $ | |||||||||
| Research and development | |||||||||||
| Selling, general and administrative | |||||||||||
| Total | $ | $ | |||||||||
The stock-based compensation expense presented above includes $(0.4 ) million and $2.6 million of liability-classified awards, including $0.9 million and $2.5 million related to Foresight contingent consideration, for the three and nine months ended September 30, 2026, respectively. There was no
Stock Options
The following table summarizes option activity for the nine months ended September 30, 2026:
Number of Shares Outstanding | Weighted- Average Exercise Price | ||||||||||
| (in thousands, except for per share data) | |||||||||||
| December 31, 2025 | $ | ||||||||||
| Options exercised | ( | $ | |||||||||
| Options forfeited/cancelled | ( | $ | |||||||||
| September 30, 2026 | $ | ||||||||||
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Restricted Stock Units and Performance-Based Awards
The following table summarizes unvested RSU and PSU activity during the nine months ended September 30, 2026:
| Shares | Weighted- Average Grant Date Fair Value | ||||||||||
| (in thousands, except for per share data) | |||||||||||
| Balance at December 31, 2025 | $ | ||||||||||
| Awards granted | $ | ||||||||||
| Awards vested | ( | $ | |||||||||
| Awards forfeited/cancelled | ( | $ | |||||||||
| Balance at September 30, 2026 | $ | ||||||||||
The above table of unvested RSU and PSU activity reflects unvested PSUs at 100 % of their target vesting amount; however, vesting can vary from 0 % to 200 % of target, depending on the level of achievement of performance criteria.
The Company grants certain senior-level executives performance stock units which vest based on performance and time-based service conditions, which are referred to herein as performance-based awards. During the nine months ended September 30, 2026 and 2025, the Company granted 0.2 million and 0.4 million performance-based awards with an aggregate grant date fair value at 100 45.4 million and $64.9 million, respectively. Stock-based compensation for these performance-based awards milestones are assessed to be 200 % of the grant value for 2025 and prior unvested awards and 100 % of grant value for 2026 awards.
The Company has recognized $25.0 million and $71.4 million for performance-based awards for the three and nine months ended September 30, 2026, respectively. The Company has recognized $25.5 million and $74.0 million for performance-based awards for the three and nine months ended September 30, 2025, respectively.
12. Debt
Credit Line Agreement
In September 2015, the Company entered into a credit line with UBS (the “Credit Line”) providing for a $50.0 million revolving line of credit. The Credit Line was subsequently changed from $50.0 million to $100.0 million. The Credit Line is secured by a first priority lien and security interest in the Company’s money market and marketable securities held in its managed investment account with UBS. The Company is required to maintain a minimum of at least $150.0 million in its UBS accounts as collateral, which is classified as cash, cash equivalents and restricted cash in the consolidated balance sheets. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate the Credit Line, in its discretion and without cause, at any time. The interest rate for the Credit Line is the 30-day SOFR average, plus 0.5 %. As of September 30, 2026, the Company has drawn down a total of $80.0 million, and there is $20.0 million remaining and available on the Credit Line.
13. Income Taxes
During the three months ended September 30, 2026 and 2025, the Company recorded total income tax expense of approximately $0.3 million and $0.2 million, respectively. During the nine months ended September 30, 2026 and 2025, the Company recorded total income tax expense of approximately $0.3 million and $0.7 million, respectively. The income tax expense is primarily attributable to state income tax and foreign income tax. Due to the Company’s history of
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cumulative operating losses, the Company concluded that, after considering all the available objective evidence, it is not more likely than not that all of the Company’s net deferred tax assets will be realized. Accordingly, all of the Company’s deferred tax assets, which includes net operating loss carryforwards and tax credits related primarily to research and development, continue to be subjected to a valuation allowance as of September 30, 2026. The Company will continue to maintain a valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets.
Interest and/or penalties related to income tax matters are recognized as a component of income tax expense. As of September 30, 2026 and December 31, 2025, there were no
14. Net Loss per Share
The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would be anti-dilutive, as of September 30, 2026 and 2025:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Options to purchase common stock | |||||||||||
| Performance-based awards and restricted stock units | |||||||||||
| Employee stock purchase plan | |||||||||||
| Contingent consideration | |||||||||||
| Total | |||||||||||
In March 2026, the Company finalized a post-closing working capital adjustment related to the acquisition of Foresight Diagnostics. Certain escrowed shares that were returned to the Company in the second quarter of 2026 have been excluded from the calculation of basic and diluted earnings per share.
15. Segment Reporting
The Company currently operates as a single reporting segment entity with the Chief Executive Officer as the chief operating decision maker (the “CODM”). The CODM relies on the financial statements presented within the annual report Form 10-K and quarterly Form 10-Q to evaluate the Company’s financial performance and make key operating decisions. The key area of focus of the CODM for the allocation of resources is the cash and investments used in supporting the Company’s business. These financial statements provide a comprehensive view of the Company’s overall financial condition, including information on expenses, assets, and liabilities. The significant expense categories are consistent with those presented on the face of the condensed consolidated statements of operations and comprehensive loss. The CODM does not receive or use any other segmented or disaggregated financial or any significant expense information for decision-
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making purposes. Additionally, gross profit and gross margin percentage are regularly provided to the CODM and are derived based on the condensed consolidated statements of operations and comprehensive loss as follows:
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands except percentages) | |||||||||||
| Revenue | $ | $ | |||||||||
| Cost of product revenues | |||||||||||
| Cost of licensing and other revenues | |||||||||||
| Gross profit | $ | $ | |||||||||
| Gross margin percentage | % | % | |||||||||
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands except percentages) | |||||||||||
| Revenue | $ | $ | |||||||||
| Cost of product revenues | |||||||||||
| Cost of licensing and other revenues | |||||||||||
| Gross profit | $ | $ | |||||||||
| Gross margin percentage | % | % | |||||||||
16. Subsequent Events
On November 2, 2026, the Company acquired one of its strategic partners, pursuant to an Agreement and Plan of Merger. The total purchase price consideration is up to $30.0 million, which includes up to $5.0 million in performance milestones. Due to the proximity of the acquisition to the filing of this Form 10-Q, the accounting for the acquisition is incomplete. As a result, the Company has not yet completed the allocation of the purchase price, including determining the fair value of consideration transferred, assets acquired, and liabilities assumed, and has not provided acquisition-related costs. Pro forma financial information and results of the acquiree’s operations since the acquisition date are not material.
On November 4, 2026, Steve Chapman resigned from service as the Company’s Chief Executive Officer and President and as a director on the Company’s Board of Directors, effective November 5, 2026. On November 4, 2026, the Board appointed Solomon Moshkevich as Chief Executive Officer and President of the Company, effective November 5, 2026. As Chief Executive Officer, Mr. Moshkevich will serve as the Company’s principal executive officer, and as a Class III director filling the vacancy created by Mr. Chapman’s resignation.
The Company entered into a Transition and Consulting Agreement with Mr. Chapman. Subject to the Transition and Consulting Agreement, Mr. Chapman will be entitled to receive:
•a lump-sum transition payment of $1,000,000 , payable within 10 days after the Transition Agreement becomes effective;
•a 2026 annual bonus with a target of $1,500,000 payable consistently with other employees no later than March 15, 2027;
•payment or reimbursement of COBRA premiums for up to 12 months; and
•92,933 Time-Based RSUs that are unvested as of November 5, 2026 will vest between the date the Transition Agreement becomes effective through November 5, 2027.
•2024, 2025 and 2026 Performance-Based RSUs will remain outstanding and will vest, subject to certain conditions, based on actual achievement of the applicable performance goals for each respective award, and will be settled at the same time that the corresponding performance-based RSU awards held by the Company’s other executive officers are settled, provided the Consulting Agreement service period is completed.
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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 in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this report. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 27, 2026.
Overview
We are a diagnostics company with proprietary molecular and bioinformatics technology that we are applying to change disease management worldwide. Our cell-free DNA ("cfDNA") technology combines our novel molecular assays, which reliably measure many informative regions across the genome, from samples as small as a single cell, with our statistical algorithms that incorporate data available from the broader scientific community to identify genetic variations, covering a wide range of serious conditions with high accuracy and coverage. We aim to make personalized genetic testing and diagnostics part of the standard of care to protect health and inform earlier and provide more targeted interventions that help lead to longer, healthier lives.
We provide a comprehensive suite of products to improve patient care outcomes in three main areas of healthcare – oncology, women’s health, and organ health. We generate the majority of our revenues from the sale of Panorama, our non-invasive prenatal test (“NIPT”) and Horizon, our genetic carrier screening test. In addition to Panorama, our product offerings in women’s health include Fetal Focus, our noninvasive prenatal test for single-gene inherited conditions, Vistara, our single-gene NIPT that screens for conditions that may affect quality of life, and Anora, our test to help determine underlying reasons for occurrence of miscarriage, and Empower, our hereditary cancer screening test which we also offer through our oncology sales channel. In oncology, we offer Signatera, our personalized ctDNA blood test for MRD assessment, early recurrence monitoring, and evaluation of treatment response in patients previously diagnosed with cancer. We also offer Latitude, our blood-based MRD test for colorectal cancer that does not require a tumor tissue sample, as well as Altera, a comprehensive genomic profiling test to support treatment decisions and therapy selection.
We process tests in our laboratories certified under the Clinical Laboratory Improvement Amendments of 1988, or CLIA, primarily in Austin, Texas and San Carlos, California; our laboratory in Boulder, Colorado performs clinical trials testing. A portion of our testing is performed by third-party laboratories. Our customers include independent laboratories, national and regional reference laboratories, medical centers and physician practices for our screening tests, and research laboratories and pharmaceutical companies. We market and sell our tests through our direct sales force and, for our women’s health tests, through our laboratory distribution partners. We bill clinics, laboratory distribution partners, patients, pharmaceutical companies and insurance payers for the tests we perform. In cases where we bill laboratory distribution partners, our partners in turn bill clinics, patients and insurers. The majority of our revenue comes from insurers with whom we have in-network contracts. Such insurers reimburse us for our tests pursuant to our in-network contracts with them, based on positive coverage determinations, which means that the insurer has determined that the test in general is medically necessary for this category of patient.
In addition to offering tests to be performed at our laboratories, either directly or through our laboratory distribution partners, we also establish licensing arrangements with laboratories under Constellation, our cloud-based distribution model, whereby our laboratory licensees run the molecular workflows themselves and then access our bioinformatics algorithms through our cloud-based software. This cloud-based distribution model results in lower revenues and gross profit per test than cases in which we process a test ourselves; however, because we do not incur the costs of processing the tests, our costs per test under this model are also lower.
The principal focus of our commercial operations is to offer our tests through both our direct sales force and laboratory distribution partners. The number of tests that we accession is a key indicator that we use to assess our business. A test is accessioned when we receive the test at our laboratory, the relevant information about the test is entered into our computer system, and the test sample is routed into the appropriate workflow. This number is a subset of the number of tests that we process. The number of tests that we process is a key metric as it tracks overall volume growth.
During the nine months ended September 30, 2026, we processed approximately 3,150,600 tests, comprised of approximately 3,109,500 tests accessioned in our laboratory, compared to approximately 2,601,900 tests processed, comprised of approximately 2,559,800 tests accessioned in our laboratory, during the nine months ended September 30,
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2025. This increase in volume primarily represents continued commercial growth of Signatera, Panorama and Horizon, both as tests performed in our laboratories as well as through our Constellation software platform.
The percent of our revenues attributable to our U.S. direct sales force for the nine months ended September 30, 2026 was 95%, a decrease compared to 96% for the nine months ended September 30, 2025. The percent of our revenues attributable to U.S. laboratory distribution partners for the nine months ended September 30, 2026 was 3%, an increase compared to 2% from the same period in the prior year. Our ability to increase our revenues and gross profit will depend on our ability to further penetrate the U.S. market with our direct sales force. The percent of our revenues attributable to international laboratory distribution partners and other international sales for the nine months ended in both September 30, 2026 and 2025 was 2%.
For the nine months ended September 30, 2026, total revenues were $2,243.4 million compared to $1,640.6 million in the nine months ended September 30, 2025. Product revenues accounted for $2,231.8 million, nearly 99% of total revenues for the nine months ended September 30, 2026 compared to $1,634.7 million, representing nearly 100% of total revenues for the nine months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, no customers exceeded 10% of the total revenues on an individual basis. Revenues from customers outside the United States were $40.1 million, representing approximately 2% of total revenues for the nine months ended September 30, 2026. For the nine months ended September 30, 2025, revenues from customers outside the United States were $28.1 million, representing approximately 2% of total revenues. Most of our revenues have been denominated in U.S. dollars, though we generate some revenue in foreign currency, primarily denominated in Euros and Singapore Dollars.
Our net loss for the nine months ended September 30, 2026 and 2025 was $212.0 million and $255.4 million, respectively. This included non-cash stock compensation expense of $304.3 million and $261.8 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, we had an accumulated deficit of $3.0 billion.
Components of the Results of Operations
Revenues
Product Revenues
We generate revenues from the sale of our tests, primarily from the sale of our Signatera, Panorama and Horizon tests. Our two primary distribution channels are our direct sales force and our laboratory partners. In cases where we promote our tests through our direct sales force, we generally bill directly to a patient, clinic or insurance carrier, or a combination of the insurance carrier and patient, for the fees.
Sales of our clinical tests are recorded as product revenues. Revenues recognized from tests processed through our Constellation model, and from our strategic partnership agreements, are reported in licensing and other revenues.
In cases where we sell our tests through our laboratory partners, the majority of our laboratory partners bill the patient, clinic or insurance carrier for the performance of our tests, and we are entitled to either a fixed price per test or a percentage of their collections.
Our ability to increase our revenues will depend on our ability to further penetrate our core markets in oncology, organ health, and women’s health and, in particular, generate sales through our direct sales force, develop and commercialize additional tests, obtain reimbursement from additional third-party payers and maintain our reimbursement rates for tests performed. For example, we believe that the market for minimal residual disease (MRD) testing is significantly underpenetrated today, as Signatera was among the first of its kind of blood-based MRD personalized to be launched commercially in 2020. In order to further penetrate this market, we must continue to deliver excellent customer service, scale our laboratory operations, update the performance and features of our offering, and effectively communicate our offering to physicians via effective sales and marketing efforts. Beyond increasing volumes, an additional pathway to increasing revenues depends on increasing third party reimbursement for Signatera. Many third-party payers do not currently reimburse for Signatera, in part because Signatera is not yet broadly included in oncology clinical practice guidelines. In order to gain broader guideline inclusion, we will need to continue to publish positive clinical trial results in a wide array of cancer types.
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Licensing and Other Revenues
Revenues recognized from tests processed through our Constellation model and from our strategic partnership agreements are reported in licensing and other revenues. We also recognize licensing revenues through the licensing and the provisioning of services to support the use of our proprietary technology by licensees under our cloud-based distribution model.
Our strategy to offer access to our algorithm to laboratory licensees via our Constellation cloud-based software platform may also cause our revenues to decrease because we do not process the tests and perform the molecular biology analysis in our own laboratory under this model, and therefore are not able to charge as high an amount and, as a result, realize lower revenues per test than when we perform the entire test ourselves.
Cost of Product Revenues
The components of our cost of product revenues are material and service costs, depreciation charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical records, order and delivery systems, shipping charges to transport samples, costs incurred from third party test processing fees, and allocated overhead such as rent, information technology costs, leasehold depreciation and utilities. Costs associated with Whole Exome Sequencing, are also included, as well as labor costs, relating to our Signatera CLIA and Signatera research use only offerings. Costs associated with performing tests are recorded when the test is accessioned. We expect cost of product revenues to increase as the number of tests we perform increases.
As we continue to achieve scale, we have increased our focus on more efficient use of labor, automation, and DNA sequencing. For example, we updated the molecular and bioinformatics process for Panorama to further reduce the sequencing reagents, test steps and associated labor costs required to obtain a test result, while increasing the accuracy of the test to allow it to run with lower fetal fraction input. These improvements also reduced the frequency of the need to require blood redraws from the patient.
Cost of Licensing and Other Revenues
The components of our cost of licensing and other revenues are material costs associated with test kits sold to Constellation clients, development and support services relating to our strategic partnership agreements and other costs.
We consider our cost of licensing and other revenues for the Constellation software platform to be relatively low, and therefore we expect its associated gross margin is higher. We expect our cost of licensing will increase in relation to volume growth.
Expenses
Research and Development
Research and development expenses include costs incurred to develop our technology, collect clinical samples and conduct clinical studies to develop and support our products. These costs consist of personnel costs, including stock-based compensation expense; prototype materials; laboratory supplies; consulting costs; regulatory costs; electronic medical record set up costs; and costs associated with setting up and conducting clinical studies at domestic and international sites and allocated overhead, including rent, information technology, equipment depreciation and utilities. We expense all research and development costs in the periods in which they are incurred. We expect our research and development expenses to increase in absolute dollars as we continue to invest in research and development activities related to developing enhanced and new products.
Selling, General and Administrative
Selling, general and administrative expenses include executive, selling and marketing, legal, finance and accounting, human resources, billing and client services. These expenses consist of personnel costs, including stock-based compensation expense; direct marketing expenses; audit and legal expenses; consulting costs; training and medical
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education activities; payer outreach programs and allocated overhead, including rent, information technology, equipment depreciation, and utilities.
Interest Expense
Interest expense is attributable to borrowing under our credit line with UBS (the “Credit Line”).
Interest Income and Other (Expense) Income, Net
Interest income and other (expense) income, net is comprised of interest earned on our cash; realized gains and losses on investments and assets, sublease rental income, and foreign currency remeasurement gains and losses.
Critical Accounting Policies
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make 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 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 on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We consider our critical accounting policies and estimates to be revenue recognition, stock-based compensation attributable to performance-based awards, and certain management assumptions used in the estimation of the fair value of intangible assets acquired in a business combination.
There have been no material changes to our other critical accounting policies and estimates as compared to the disclosures in our Annual Report on Form 10-K for the year ended December 31, 2025.
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Results of Operations
Comparison of the three months ended September 30, 2026 and 2025
| Three months ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Amount | Percent | ||||||||||||||||||||
| (in thousands except percentage) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Product revenues | $ | 789,981 | $ | 590,197 | $ | 199,784 | 33.9 | % | |||||||||||||||
| Licensing and other revenues | 4,000 | 1,986 | 2,014 | 101.4 | |||||||||||||||||||
| Total revenues | 793,981 | 592,183 | 201,798 | 34.1 | |||||||||||||||||||
| Cost and expenses | |||||||||||||||||||||||
| Cost of product revenues | 279,636 | 207,253 | 72,383 | 34.9 | |||||||||||||||||||
| Cost of licensing and other revenues | 871 | 548 | 323 | 58.9 | |||||||||||||||||||
| Research and development | 242,433 | 173,412 | 69,021 | 39.8 | |||||||||||||||||||
| Selling, general and administrative | 333,656 | 308,546 | 25,110 | 8.1 | |||||||||||||||||||
| Amortization of acquired intangible assets | 5,707 | — | 5,707 | 100.0 | |||||||||||||||||||
| Total cost and expenses | 862,303 | 689,759 | 172,544 | 25.0 | |||||||||||||||||||
| Loss from operations | (68,322) | (97,576) | 29,254 | (30.0) | |||||||||||||||||||
| Interest expense | (903) | (1,045) | 142 | (13.6) | |||||||||||||||||||
| Interest and other income, net | 9,612 | 11,284 | (1,672) | (14.8) | |||||||||||||||||||
| Loss before income taxes | (59,613) | (87,337) | 27,724 | (31.7) | |||||||||||||||||||
| Income tax benefit (expense) | (299) | (207) | (92) | 44.4 | |||||||||||||||||||
| Net loss | $ | (59,912) | $ | (87,544) | $ | 27,632 | (31.6 | %) | |||||||||||||||
Revenues
Total revenues are comprised of product revenues, which are primarily driven by sales of our Panorama and Horizon tests, Signatera and other oncology testing, and licensing and other revenues, which primarily includes development licensing revenue and licensing of our Constellation software. Total revenues for the three months ended September 30, 2026 increased by $201.8 million, or 34.1%, when compared to the three months ended September 30, 2025.
We derive our revenues from tests based on units reported to customers—tests delivered with a result. All reported units are either accessioned in our laboratories or processed outside of our laboratories. As noted in the section titled “Overview” above, the number of tests that we process is a key metric as it tracks our overall volume growth. During the three months ended September 30, 2026, total reported units were approximately 1,024,800, comprised of approximately 1,012,100 tests reported in our laboratories. Comparatively, during the three months ended September 30, 2025, total reported units were approximately 832,900, which is comprised of approximately 819,900 tests reported in our laboratory. During the three months ended September 30, 2026 and 2025, total oncology units processed were approximately 339,500 and 211,000, respectively.
Product Revenues
During the three months ended September 30, 2026, product revenues increased by $199.8 million, or 33.9%, compared to the three months ended September 30, 2025, as a result of the continued revenue growth from increased test volumes, and average selling price improvements. During the three months ended September 30, 2026, there was an increase in total reported units by approximately 191,900 units, or 23.0%, in comparison with the three months ended September 30, 2025. Average selling price (“ASP”, calculated as total product revenue divided by total reported units) increased during the three months ended September 30, 2026 by approximately 8.8% in comparison with the three months ended September 30, 2025. The increase in ASP was due to an increase in the proportion of product revenues derived from Signatera, which commands higher ASPs than our women's health products, and improved coverage from third party payers, primarily for Signatera. In addition, we recognized additional revenue as part of the change in estimate process due
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to excess collections for tests delivered in prior periods which were deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur. This change in estimate decreased by approximately $22.8 million during the three months ended September 30, 2026 compared with the three months ended September 30, 2025. The total change in estimate recorded during the three months ended September 30, 2026 was $32.3 million. The decrease in the change in estimate reflects the continued accumulation of historical collection experience, which has resulted in our estimates of variable consideration at the time of revenue recognition more closely approximating subsequent cash collections.
Licensing and Other Revenues
Licensing and other revenues increased by $2.0 million, or 101.4%, during the three months ended September 30, 2026 when compared to the three months ended September 30, 2025. The increase was primarily due to an increase in revenue from our collaborative agreements.
Cost of Product Revenues
During the three months ended September 30, 2026, cost of product revenues increased compared to the three months ended September 30, 2025 by approximately $72.4 million, or 34.9%, primarily due to higher costs related to inventory consumption of $24.3 million, a $17.9 million increase in third-party fees, and a $13.8 million increase in other costs including equipment and related depreciation, shipping, and overhead expenses, all of which were driven by expansion of the business with an increase in accessioned cases by approximately 200,600 units, or 22.8%, during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Additionally, labor costs increased $16.4 million due to the increase in hiring to support lab operations and increased volume of tests processed. Overall the cost of product revenues as a percent of total product revenues were 35.4% and 35.1% for the three months ended September 30, 2026 and 2025, respectively. The increase in cost of product revenue as a percentage of product revenues was primarily due to a reduction in the change in estimate of $22.8 million in the three months ended September 30, 2026 in comparison with the three months ended September 30, 2025.
Cost of Licensing and Other Revenues
The cost of licensing and other revenues for the three months ended September 30, 2026 increased by $0.3 million, or 58.9%, compared to the three months ended September 30, 2025, primarily due to a net increase in costs to support our collaborative agreements.
Expenses
Research and Development (R&D)
Research and development expenses during the three months ended September 30, 2026, increased by $69.0 million, or 39.8%, when compared to the three months ended September 30, 2025. The increase was attributable to a $25.8 million increase in salary and related compensation expenditures due to an increase in headcount (including a $7.3 million increase in stock-based compensation expense) to support clinical research, clinical publications, and development of our new products during the three months ended September 30, 2026 in comparison with the three months ended September 30, 2025, a $24.7 million increase in lab and clinical trial-related expenses where we continue investing in new product launches and clinical trials, such as early cancer detection, a $13.0 million increase in office related expenses, and a $5.5 million net increase in consulting, travel, facilities, and other expenses.
Selling, General and Administrative (SG&A)
Selling, general, and administrative expenses increased by $25.1 million, or 8.1%, during the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was attributable to a $19.7 million increase in salary and related compensation expenditures due to an increase in headcount (including a $6.7 million increase in stock-based compensation expense) to support expanded general operations and billing during the three months ended September 30, 2026 in comparison with the three months ended September 30, 2025, a $9.8 million increase in marketing expenses to expand our market penetration and adoption, a $7.7 million increase for change in valuation of contingent consideration, and a $10.6 million net increase in certain travel, facilities, office and other costs, offset by a $22.7 million decrease in legal and consulting expenses.
Amortization of Acquired Intangibles
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Amortization of acquired intangibles increased by $5.7 million, or 100.0%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was attributed to the amortization of intangibles acquired as part of the business combination with Foresight Diagnostics. The acquired intangibles are primarily used for research and development of future products.
Interest Expense
Interest expense slightly decreased in the three months ended September 30, 2026 compared to the same period in the prior year due to lower interest rates.
Interest and Other Income
Interest and other income for the three months ended September 30, 2026, decreased by $1.7 million, or 14.8%, compared to the same period in the prior year, primarily due to lower interest income driven by lower interest rates.
Income Tax Benefit (Expense)
Income tax expense was $0.3 million for the three months ended September 30, 2026, compared to an income tax expense of $0.2 million for the three months ended September 30, 2025, primarily due to state taxes.
Comparison of the nine months ended September 30, 2026 and 2025
| Nine months ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Amount | Percent | ||||||||||||||||||||
| (in thousands except percentage) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Product revenues | $ | 2,231,778 | $ | 1,634,660 | $ | 597,118 | 36.5 | % | |||||||||||||||
| Licensing and other revenues | 11,599 | 5,955 | 5,644 | 94.8 | |||||||||||||||||||
| Total revenues | 2,243,377 | 1,640,615 | 602,762 | 36.7 | |||||||||||||||||||
| Cost and expenses | |||||||||||||||||||||||
| Cost of product revenues | 791,435 | 591,397 | 200,038 | 33.8 | |||||||||||||||||||
| Cost of licensing and other revenues | 2,443 | 1,465 | 978 | 66.8 | |||||||||||||||||||
| Research and development | 681,206 | 448,917 | 232,289 | 51.7 | |||||||||||||||||||
| Selling, general and administrative | 988,798 | 885,962 | 102,836 | 11.6 | |||||||||||||||||||
| Amortization of acquired intangible assets | 17,123 | — | 17,123 | 100.0 | |||||||||||||||||||
| Total cost and expenses | 2,481,005 | 1,927,741 | 553,264 | 28.7 | |||||||||||||||||||
| Loss from operations | (237,628) | (287,126) | 49,498 | (17.2) | |||||||||||||||||||
| Interest expense | (2,685) | (3,078) | 393 | (12.8) | |||||||||||||||||||
| Interest and other income, net | 28,665 | 35,441 | (6,776) | (19.1) | |||||||||||||||||||
| Loss before income taxes | (211,648) | (254,763) | 43,115 | (16.9) | |||||||||||||||||||
| Income tax benefit (expense) | (324) | (655) | 331 | (50.5) | |||||||||||||||||||
| Net loss | $ | (211,972) | $ | (255,418) | $ | 43,446 | (17.0) | % | |||||||||||||||
Revenues
Total revenues are comprised of product revenues, which are primarily driven by sales of our Panorama and Horizon tests, oncology testing, and licensing and other revenues, which primarily includes development licensing revenue and licensing of our Constellation software. Total revenues for the nine months ended September 30, 2026 increased by $602.8 million, or 36.7%, when compared to the nine months ended September 30, 2025.
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We derive our revenues from tests based on units reported to customers—tests delivered with a result. All reported units are either accessioned in our laboratory or processed outside of our laboratory. As noted in the section titled “Overview” above, the number of tests that we process is a key metric, as it tracks overall volume growth. During the nine months ended September 30, 2026, total reported units were approximately 2,941,900, comprised of approximately 2,902,200 tests reported in our laboratory. Comparatively, during the nine months ended September 30, 2025, total reported units were approximately 2,450,100, which is comprised of approximately 2,410,600 tests reported in our laboratory. During the nine months ended September 30, 2026 and 2025, total oncology units processed were approximately 895,100 and 567,500, respectively.
Product Revenues
During the nine months ended September 30, 2026, product revenues increased by $597.1 million, or 36.5%, compared to the nine months ended September 30, 2025, primarily as a result of the continued revenue growth from increased test volumes, and average selling price improvements. During the nine months ended September 30, 2026 there was an increase in reported units by approximately 491,800 units, or 20.1%, in comparison with the nine months ended September 30, 2025. Average ASP increased during the nine months ended September 30, 2026 by approximately 13.7% in comparison with the nine months ended September 30, 2025. The increase in ASP was due to better reimbursement for our major products and an increase in the proportion of product revenues derived from Signatera, which commands higher ASPs than our women's health products. We also recognized additional revenue as part of the change in estimate process due to excess collections for the tests delivered in prior periods which were deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur. This change in estimate increased by approximately $10.9 million during the nine months ended September 30, 2026 compared with the nine months ended September 30, 2025. The total change in estimate recorded during the nine months ended September 30, 2026 was $145.6 million. The increase in change in estimate reflects higher changes in estimate in the first half of 2026, partially offset by a lower change in estimate in the third quarter, as the continued accumulation of historical collection experience has resulted in our estimates of variable consideration at the time of revenue recognition more closely approximating subsequent cash collections.
Licensing and Other Revenues
Licensing and other revenues increased by $5.6 million, or 94.8%, during the nine months ended September 30, 2026 when compared to the nine months ended September 30, 2025. The increase was primarily due to an increase in revenue from our collaborative agreements.
Cost of Product Revenues
During the nine months ended September 30, 2026, cost of product revenues increased compared to the nine months ended September 30, 2025 by approximately $200.0 million, or 33.8%, due to a $47.5 million increase in third-party fees, higher costs related to inventory consumption of $68.9 million driven by expansion of the business with an increase in accessioned cases by approximately 549,700 units during the nine months ended September 30, 2026 in comparison with the nine months ended September 30, 2025. In addition, labor costs increased by $49.7 million due to the increase in hiring to support lab operations and increased volume of tests processed during the nine months ended September 30, 2026 in comparison with the nine months ended September 30, 2025, and shipping, equipment and related depreciation expense, overhead, and other related costs increased by $33.9 million driven by headcount growth and product support. Overall, the cost of product revenues as a percent of total product revenues were 35.5% and 36.2% for the nine months ended September 30, 2026 and 2025, respectively. The improvement was primarily the result of a change in product mix where certain products have a lower cost per test. Additionally, the reduction was partially driven by a change in estimate related to excess cash collections for tests delivered in prior periods which were deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which resulted in an increase in revenue of approximately $10.9 million in the nine months ended September 30, 2026 in comparison with the nine months ended September 30, 2025.
Cost of Licensing and Other Revenues
Cost of licensing and other revenues for the nine months ended September 30, 2026, when compared to the nine months ended September 30, 2025, increased by $1.0 million, or 66.8%, primarily due to a net increase in costs to support our collaborative agreements.
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Expenses
Research and Development
Research and development expenses during the nine months ended September 30, 2026, increased by $232.3 million, or 51.7%, when compared to the nine months ended September 30, 2025. The increase was attributable to an increase of $91.8 million in salary and related compensation expenditures (including a $20.7 million increase in stock-based compensation expense) during the nine months ended September 30, 2026 in comparison with the nine months ended September 30, 2025 to support clinical research, clinical publications, and development of our new products, a $5.9 million increase in consulting expenses, a $35.3 million increase in office related expenses, a $89.8 million increase in lab related and clinical trial expenses where we continue investing in new product launches and clinical trials designed to accelerate guideline adoption, and a $9.5 million net increase in facilities, travel, and other expenses.
Selling, General and Administrative
Selling, general and administrative expenses increased by $102.8 million, or 11.6%, during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was attributable to an increase of $105.0 million in salary and related compensation expenditures (including a $17.9 million increase in stock-based compensation expense) during the nine months ended September 30, 2026 in comparison with the nine months ended September 30, 2025, a $35.0 million increase in marketing expenses for continued product expansion and market penetration, a $8.7 million increase in travel related costs, a $11.3 million increase in office costs, a $8.2 million increase for change in valuation of contingent consideration, and a $14.8 million net increase in facilities and other costs, offset by a $80.2 million decrease in legal and consulting expenses.
Amortization of Acquired Intangibles
Amortization of acquired intangibles increased by $17.1 million, or 100.0%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was attributed to the amortization of intangibles acquired as part of the business combination with Foresight Diagnostics. The acquired intangibles are primarily used for research and development of future products.
Interest Expense
Interest expense decreased $0.4 million, or 12.8%, in the nine months ended September 30, 2026 compared to the same period in the prior year due to lower interest rates.
Interest and Other Income
Interest and other income for the nine months ended September 30, 2026 decreased $6.8 million, or 19.1%, compared to the same period in the prior year, primarily due to a reduction in the revaluation of warrants and preferred shares along with lower interest income driven by lower interest rates.
Income Tax Benefit (Expense)
Income tax expense slightly decreased in the nine months ended September 30, 2026, compared to the same period in the prior year, primarily due to state and foreign taxes.
Liquidity and Capital Resources
We have incurred net losses each year since our inception. For the nine months ended September 30, 2026, we had a net loss of $212.0 million, and we expect to continue to incur net losses in future periods as we continue to devote a substantial portion of our resources to our research and development and commercialization efforts for our existing and new products. As of September 30, 2026, we had an accumulated deficit of $3.0 billion. As of September 30, 2026, we had $1.1 billion in cash and cash equivalents and restricted cash, and $80.3 million of outstanding balance on the Credit Line, including accrued interest. As of September 30, 2026, we have $20.0 million remaining and available on the Credit Line.
While we have introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations. Accordingly, we have funded the portion of operating costs that exceeds revenues through a
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combination of equity issuances and debt, and other financings. We expect to develop and commercialize future products and continue to invest in the growth of our business, and consequently, we will need to generate additional revenues to achieve future profitability and may need to raise additional equity or incur additional debt. If we raise additional funds by issuing equity securities, our stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to us. If we are unable to obtain additional financing, we may be required to delay the development and commercialization of our products and significantly scale back our business and operations.
Our contractual obligations and other commitments have been satisfied by equity offerings, our convertible note financing conducted in April 2020, the Credit Line described below, and our product, licensing, and other sales. For our commitments, refer to the “Contractual Obligations and Other Commitments” section below.
Refer to additional disclosures associated with risks and our ability to generate and obtain adequate amounts of cash to meet capital requirements for both short-term and long-term obligations.
Based on our current business plan, we believe that our existing cash will be sufficient to meet our anticipated cash requirements for at least 12 months after the date of issuance of the accompanying financial statements.
Credit Line Agreement
In September 2015, we entered into a Credit Line with UBS, or the Credit Line, providing for a $50.0 million revolving line of credit which could be drawn in increments at any time. The Credit Line is secured by a first priority lien and security interest in our money market and marketable securities held in our managed investment account with UBS. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate it, in its discretion and without cause, at any time. The interest rate is the 30-day Secured Overnight Financing Rate (or “SOFR”) average, plus 0.5%. The SOFR rate is variable. The Credit Line was subsequently changed from $50.0 million to $100.0 million. As of September 30, 2026, the total principal amount outstanding with accrued interest was $80.3 million, and $20.0 million is remaining and available under the Credit Line.
Cash Flows
The following table summarizes our condensed consolidated cash flows for the periods indicated:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Cash provided by operating activities | $ | 138,895 | $ | 141,413 | |||||||
| Cash used in investing activities | (134,488) | (60,617) | |||||||||
| Cash provided by financing activities | 16,648 | 15,055 | |||||||||
| Net change in cash, cash equivalents and restricted cash | 21,055 | 95,851 | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 1,076,140 | 945,587 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 1,097,195 | $ | 1,041,438 | |||||||
Cash Provided by Operating Activities
Overall, our cash flow position is significantly influenced by the timing of customer cash collections and the continued growth of the business. As our operations have expanded, including increased testing volumes, additional third-party vendors, and higher headcount, corresponding increases in operating cash outflows have occurred and are expected to continue. In addition, we invested heavily into research and development with focused efforts on building new products to support our patients, clinical trials to ensure our tests provide enhanced health benefits to patients and the ability to adopt clinical guidelines, and obtain test reimbursements from payors and patients. We expect to continue to invest heavily in research and development activities.
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During the nine months ended September 30, 2026, our reported test units increased by 491,800 compared to the nine months ended September 30, 2025. This growth resulted in higher revenue and an increase in accounts receivable of $174.8 million. The increase in accounts receivable is consistent with our normal revenue cycle, as cash collections are generally received over an average period of approximately six to nine months following the delivery of test results.
Operating liabilities were primarily driven by an aggregate increase in accounts payable, accrued compensation, and other accrued liabilities of approximately $165.0 million during the nine-month period ended September 30, 2026. The increase primarily reflects the overall growth of the business, including higher expenditures for third-party vendors, consulting services, and employee-related costs where total employee headcount increased by approximately 1,200, to support expanded lab operations, research and development, clinical trials, billing and other critical functions, as well as normal timing differences between the recognition of expenses and the related cash payments.
As discussed in Note 4, Revenue Recognition, during the nine months ended September 30, 2026, we also recognized $145.6 million, as compared to $134.7 million for the nine months ended September 30, 2025, related to favorable changes in estimate that increased revenue for tests delivered in prior periods that were deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur. This $10.9 million increase directly increased our cash provided by operating activities and helped fund our increased clinical trials, research and development expenses. To the extent we record a change in estimate that increases revenue for tests delivered in prior periods that were deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur, we expect to continue reinvesting into future clinical trials, research and development.
During the nine months ended September 30, 2025, cash provided by operating activities was $141.4 million. Operating cash flows benefited from approximately $134.7 million of cash collections related to favorable changes in estimates for tests delivered in prior periods that were deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur. In addition, accounts receivable decreased by $27.8 million as overall payor collections improved and cash collection cycles accelerated. Operating liabilities were primarily driven by an aggregate increase in accounts payable, accrued compensation, and other accrued liabilities of approximately $108.7 million, primarily due to the timing of cash payments for operating expenses, which also contributed positively to operating cash flows.
Cash Used in Investing Activities
Cash used in investing activities for the nine months ended September 30, 2026 totaled $134.5 million, comprised of $124.2 million in acquisitions of property and equipment to support expanded facilities to accommodate growth of the business, $10.0 million of investment in a related party, and $0.2 million of cash paid for a business combination.
Cash used in investing activities for the nine months ended September 30, 2025 totaled $60.6 million, comprised of $70.1 million in acquisitions of property and equipment to support expanded facilities to accommodate growth of the business and $12.5 million in acquisition of intangible assets offset by $22.0 million from proceeds of investments maturities.
Cash Provided by Financing Activities
Cash provided by financing activities for the nine months ended September 30, 2026, totaled $16.6 million which was comprised of $5.7 million from proceeds from the exercise of stock options, and $16.4 million proceeds from the issuance of common stock under the employee stock purchase plan offset by a payment to process $5.4 million employment taxes from the issuance of common stock upon cashless exercise of stock options and $0.1 million of stock issuance costs.
Cash provided by financing activities for the nine months ended September 30, 2025, totaled $15.1 million which was comprised of $2.9 million from proceeds from the exercise of stock options and $12.2 million from the issuance of common stock under the employee stock purchase plan.
Contractual Obligations and Other Commitments
We have entered into arrangements that contractually obligate us to make payments that will affect our liquidity and cash flows in future periods. Such arrangements include those related to our lease commitments, Credit Line, commercial supply agreements and other agreements.
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Credit Line
The short-term debt obligations consist of the $80.3 million principal amount drawn from the UBS Credit Line, or the Credit Line, and applicable interest. The Credit Line is secured by a first priority lien and security interest in our money market and marketable securities held in our managed investment account with UBS. We are required to maintain a minimum of at least $150.0 million in our UBS accounts as collateral which has been classified as cash, cash equivalents, and restricted cash in the consolidated balance sheets. The interest rate is the 30-day SOFR average, plus 0.5%. The SOFR rate is variable. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate it, in its discretion and without cause, at any time. Please refer to Note 12, Debt, for further details.
Inventory purchase and other contractual obligations
We enter into contracts in the normal course of business with various third parties for clinical trials, preclinical research studies, testing, manufacturing, and other services for operational purposes. Payments due upon cancellation generally consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation. These payments have not been included separately within these contractual and other obligations disclosures. Please refer to Note 10, Commitments and Contingencies, for further details.
Operating leases
Our future minimum lease payments consist of $199.8 million of payments, as described in Note 9, Leases, of which none was for payments for leases executed but not yet commenced. The leases have not commenced under Accounting Standards Codification, or ASC, Topic 842, Leases (ASC 842), as of September 30, 2026. As a result, these leases are not reflected within the consolidated balance sheets.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements during the periods presented.
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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 Credit Line has an interest rate set at the 30-day Secured Overnight Financing Rate, or SOFR, average, plus 0.5%. The SOFR rate is variable. An incremental change in the borrowing rate of 100 basis points would increase our annual interest expense by $0.8 million based on our $80.3 million gross debt outstanding on our Credit Line, including principal and accrued interest as of September 30, 2026. Our investment portfolio is exposed to market risk from changes in interest rates for cash equivalents held. This risk is mitigated as we have maintained a relatively short average maturity for our investment portfolio. We do not hold any investments as of September 30, 2026.
Foreign Currency Exchange Rate Fluctuations
Our operations are currently conducted primarily in the United States. As we expand internationally, our results of operations and cash flows may become subject to fluctuations due to changes in foreign currency exchange rates. In periods when the U.S. dollar declines in value as compared to the foreign currencies in which we incur expenses, our foreign currency-based expenses will increase when translated into U.S. dollars. In addition, future fluctuations in the value of the U.S. dollar may affect the price at which we sell our tests outside the United States. To date, our foreign currency risk has been minimal and we have not historically hedged our foreign currency risk; however, we may consider doing so in the future.
Inflation Risk
As of the date of filing of this Quarterly Report on Form 10-Q, we do not believe that inflation has had a material effect on our business, financial condition, or results of operations. If the Company’s costs were to become subject to significant inflationary pressures, the Company may not be able to fully offset such higher costs through increases in revenue as increases in core inflation rates, higher interest rates, and lower equity prices may also negatively affect demand for our product offerings, our ability to raise capital and cashflow impact. The Company’s inability or failure to fully offset any such higher costs could harm the Company’s business, financial condition, and results of operations.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. The term “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures as of September 30, 2026, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no
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matter how well designed 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, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in legal proceedings. The results of such legal proceedings and claims cannot be predicted with certainty and regardless of the outcome, legal proceedings could have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors.
For information regarding certain current legal proceedings, see “Note 10—Commitments and Contingencies—Legal Proceedings” in the Notes to Unaudited Interim Condensed Consolidated Financial Statements, which is incorporated herein by reference.
ITEM 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk. In addition to the information set forth in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, you should consider carefully the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission on February 27, 2026. The occurrence of any of the risks and uncertainties described in such Annual Report could materially and adversely affect our business, financial condition, results of operations and prospects. In that event, the price of our common stock could decline and you could lose part or all of your investment. Furthermore, such risks are not the only ones we face; additional risks and uncertainties not currently known or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or results of operations.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a)Recent Sales of Unregistered Securities
None.
(b)Use of Proceeds
Not applicable.
(c)Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5 OTHER INFORMATION
(a) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Chief Executive Officer Transition
On November 4, 2026, Steve Chapman resigned from service as the Company’s Chief Executive Officer and President and as a director on the Company’s Board of Directors (the “Board”), effective November 5, 2026. Mr. Chapman’s departure and resignation from the Board were not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Chapman was in good standing throughout his career with the Company, and he will remain as an advisor to the Company.
Appointment of Chief Executive Officer
On November 4, 2026, the Board appointed Solomon Moshkevich as Chief Executive Officer and President of the Company, effective November 5, 2026. As Chief Executive Officer, Mr. Moshkevich will serve as the Company’s principal executive officer.
Mr. Moshkevich, age 44, served as the Company’s President, Clinical Diagnostics from September 2023 until his appointment as Chief Executive Officer, overseeing productization, clinical validation, commercialization and quality across the Company. From January 2019 to September 2023, he served as the Company’s Senior Vice President and General Manager of Oncology, where he led the Company’s efforts to achieve Medicare coverage for Signatera across multiple cancer types. Since joining the Company in 2011, Mr. Moshkevich has built and led multiple teams, including global marketing, product management, medical and scientific affairs, commercial operations, clinical trial operations, business development, international sales, program management and portfolio strategy, and has played a leading role in the development, clinical validation and commercialization of the Company’s cell-free DNA products, including Panorama, Prospera and Signatera. Prior to joining the Company, Mr. Moshkevich was a consultant with Bain & Company in New York and was a member of the private equity investment team at Parthenon Capital in Boston. He currently serves on the board of directors of Ronald McDonald House Charities of the Bay Area. Mr. Moshkevich holds a B.A. in Economics and Mathematics, summa cum laude, from Columbia University and an M.B.A. from Stanford University.
There are no family relationships between Mr. Moshkevich and any director or executive officer of the Company. Other than the Moshkevich Employment Agreement (as defined below), there is no arrangement or understanding between Mr. Moshkevich and any other person pursuant to which he was selected as an officer or director of the Company. Mr. Moshkevich has no direct or indirect material interest in any transaction or proposed transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Moshkevich Employment Agreement
In connection with his appointment, the Company and Mr. Moshkevich entered into an employment agreement, effective as of November 5, 2026 (the “Moshkevich Employment Agreement”), which supersedes Mr. Moshkevich’s prior employment agreement with the Company. Mr. Moshkevich’s employment is at will.
Under the Moshkevich Employment Agreement, Mr. Moshkevich will receive an initial annual base salary of $900,000, subject to adjustment in accordance with the Company’s compensation policies. Mr. Moshkevich will be eligible for an annual incentive bonus under the Company’s annual cash incentive program with a target of 110% of his base salary. His target bonus for fiscal 2026 will be prorated, equal to the sum of (i) his target bonus percentage in effect immediately before November 5, 2026 multiplied by his base salary for the portion of fiscal 2026 before that date, plus (ii) 110% multiplied by his new base salary for the portion of fiscal 2026 on and after that date. His fiscal 2026 bonus will be determined based on the achievement of Company performance goals previously approved by the Human Capital Committee for fiscal 2026.
Mr. Moshkevich is also eligible to receive annual equity awards under the Company’s 2015 Equity Incentive Plan (the “Plan”) in connection with the Company’s annual equity award process, subject to approval by the Board or its Human Capital Committee. The Moshkevich Employment Agreement provides that Mr. Moshkevich’s 2027 annual equity award will have a target grant date value of $10,500,000, delivered 50% in performance-based restricted stock units and 50% in time-based restricted stock units, and will be granted at the same time as the Company’s 2027 annual equity grants to the
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Company’s other executive officers (currently expected to occur in January 2027), subject to approval by the Board or its Human Capital Committee at the time of grant. The performance-based restricted stock units will be subject to the terms of the Company’s 2027-2029 performance-based restricted stock unit program, as approved by the Human Capital Committee. In connection with his promotion, the Board, upon the recommendation of the Human Capital Committee, also approved a grant to Mr. Moshkevich of time-based restricted stock units under the Plan with a grant date value of $1,750,000, which will vest over four years, with 25% vesting on November 5, 2027 and the remainder vesting in 12 substantially equal quarterly installments thereafter, subject to his continued service with the Company. He will continue to participate in the Company’s employee benefit plans available to its employees generally.
If Mr. Moshkevich’s employment is terminated by the Company without “cause” or he resigns for “good reason” (each as defined in the Moshkevich Employment Agreement, and each such termination, an “involuntary termination”), then, subject to his return of Company property, resignation from all officer and director positions with the Company and its subsidiaries, and execution and non-revocation of separation agreement, which will include a general release of claims, in a form prescribed by the Company, Mr. Moshkevich will be eligible to receive the following:
•Involuntary termination not in connection with a change in control: (i) a lump-sum payment equal to 12 months of his base salary; (ii) payment of COBRA premiums for up to 12 months; (iii) accelerated vesting of his time-based equity awards equal to the greater of 50% of the then-unvested portion of such awards or the portion that would have vested had he completed an additional 18 months of service; and (iv) with respect to his performance-based equity awards, vesting in the number of shares eligible to vest based on actual performance through the end of the applicable measurement period, multiplied by the greater of 50% or the portion of the measurement period during which he would have provided service had he completed an additional 18 months of service (with full vesting of the earned shares under any award that would vest within that 18-month period, and no vesting unless the minimum performance condition is achieved).
•Involuntary termination at the time of or within 18 months following a change in control: (i) a lump-sum payment equal to the sum of 18 months of his base salary plus his target annual bonus for the year of termination; (ii) payment of COBRA premiums for up to 18 months; and (iii) full accelerated vesting of all outstanding time-based and performance-based equity awards, with performance-based awards vesting based on the greater of actual achievement as of the change in control or 100% achievement.
The foregoing description of the Moshkevich Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Moshkevich Employment Agreement, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2026.
Appointment of Mr. Moshkevich to the Board
On November 4, 2026, the Board appointed Mr. Moshkevich as a Class III director to fill the vacancy created by Mr. Chapman’s resignation, effective November 5, 2026. Mr. Moshkevich will serve for a term expiring at the Company’s 2027 annual meeting of stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation or removal. Mr. Moshkevich was appointed to the Board pursuant to the Moshkevich Employment Agreement, which also provides that the Company will nominate him for re-election to the Board at each annual meeting of stockholders at which his term as a director expires during his service as Chief Executive Officer. Mr. Moshkevich has not been appointed to, and is not expected to be appointed to, any committee of the Board. As an employee director, Mr. Moshkevich will not receive any additional compensation for his service on the Board. Mr. Moshkevich is party to the Company’s standard form of indemnification agreement for its directors and executive officers, the form of which was filed as Exhibit 10.9 to the Company’s Form 10-K for the fiscal year ending December 31, 2016, filed with the Securities and Exchange Commission on March 16, 2017.
Transition and Consulting Agreement with Mr. Chapman
On November 4, 2026, the Company and Mr. Chapman entered into a Transition and Consulting Agreement (the “Transition Agreement”), which provides Mr. Chapman with the benefits described below in lieu of any severance payments or benefits under his Amended and Restated Employment Agreement with the Company, effective as of August 1, 2024. Subject to the Transition Agreement (which includes a mutual release of claims) becoming effective, Mr. Chapman’s delivery of his Board resignation and his return of Company property, Mr. Chapman will be entitled to receive:
•a lump-sum transition payment of $1,000,000, equal to 12 months of his base salary, payable within 10 days after the Transition Agreement becomes effective;
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•a 2026 annual bonus (with a target of $1,500,000) determined based on the fiscal 2026 performance criteria previously approved by the Human Capital Committee, using the same determination of the achievement of such performance criteria used for the Company’s other executive officers, and payable at the same time that fiscal 2026 annual bonuses are paid to the Company’s other executive officers (and in any event no later than March 15, 2027);
•payment or reimbursement of COBRA premiums for Mr. Chapman and his eligible dependents for up to 12 months; and
•the continued vesting and award treatment described below.
Pursuant to the Transition Agreement, the Company and Mr. Chapman entered into a consulting agreement (the “Consulting Agreement”), under which Mr. Chapman will provide transition and advisory services to the Company’s Chief Executive Officer and the Board, as reasonably requested (the “Consulting Period”), which may be extended by mutual written agreement. Mr. Chapman will be paid $500 per hour for up to eight hours of requested services per month. Either party may terminate the Consulting Agreement on five days’ written notice, and the Company may terminate it immediately for “Cause” (as defined in the Consulting Agreement).
Mr. Chapman’s consulting services will constitute continuous service under the Plan, and his outstanding restricted stock unit (“RSU”) awards will be treated as follows:
•Time-Based RSUs that are unvested as of November 5, 2026 will vest as to 35,000 RSUs on the date the Transition Agreement becomes effective, and as to the remaining 57,933 RSUs in 12 substantially equal monthly installments from December 5, 2026 through November 5, 2027, subject to Mr. Chapman’s continued service through each monthly vesting date.
•2024 and 2025 Performance-Based RSUs will remain outstanding and will vest in the number of shares earned based on actual achievement of the applicable three-year cumulative revenue goals, multiplied by a service credit percentage. The service credit percentage will reflect Mr. Chapman’s service completed through November 5, 2026, plus the remaining service credit, which accrues ratably over the Consulting Period, and will equal 100% if Mr. Chapman provides services through the end of the Consulting Period. Vested shares will be settled at the same time that the corresponding performance-based RSU awards held by the Company’s other executive officers are settled.
•2026 Performance-Based RSU award will be amended to provide that, if Mr. Chapman provides consulting services through the end of the Consulting Period, executes and does not revoke a bring-down release of claims thereafter, he will be deemed to have satisfied 100% of the service requirement under the award, and the award will remain outstanding following the end of the Consulting Period and will vest based on the Company’s actual achievement of the performance goals for fiscal years 2026 through 2028. Vested shares will be settled at the same time that the corresponding performance-based RSU awards held by the Company’s other executive officers are settled.
No performance-based RSUs will vest unless the minimum performance condition under the applicable award is achieved. The number of shares earned under each performance-based RSU award will be based on the Company’s actual performance as of the end of the applicable measurement period. If the Company terminates the Consulting Agreement before the end of the Consulting Period other than for Cause, then, subject to Mr. Chapman’s execution and non-revocation of a bring-down release of claims, his RSU awards will be treated as though he had continued to provide services through the end of the Consulting Period, such that his unvested time-based RSUs will vest in full and he will be deemed to have satisfied 100% of the service requirement under his 2024, 2025 and 2026 performance-based RSU awards, with vesting remaining subject to the Company’s actual performance at the end of the respective performance period for each award. If the Company terminates the Consulting Agreement for Cause before the end of the Consulting Period, or if Mr. Chapman’s service terminates due to his death or disability before the end of the Consulting Period, then, subject to Mr. Chapman’s (or his estate’s) execution and non-revocation of a bring-down release of claims, he will vest in 67,354 time-based RSUs, plus 2,132 time-based RSUs for each month of service he provides under the Consulting Agreement before his termination, death or disability, 100% of the earned shares under his 2024 and 2025 performance-based RSU awards and 77.78% of the earned shares under his 2026 performance-based RSU award.
The Transition Agreement and the Consulting Agreement also include customary provisions regarding cooperation, confidentiality and continued compliance with Mr. Chapman’s Proprietary Information and Inventions Agreement; a covenant by Mr. Chapman not to provide services to certain named competitors of the Company for six months following November 5, 2026; a covenant by Mr. Chapman not to solicit Company employees for 12 months; and mutual non-disparagement covenants by Mr. Chapman and the Company.
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The foregoing description of the Transition Agreement and the Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Transition Agreement and the Consulting Agreement, copies of which will be filed as exhibits to the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2026.
(c) Securities Trading Plans of Directors and Executive Officers
On September 14, 2026 , Matthew Rabinowitz , our executive chairman , adopted a trading arrangement for the sale of shares of our common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c). Dr. Rabinowitz’s Rule 10b5-1 Trading Plan provides for the potential sale of up to 200,000 shares of our common stock pursuant to the terms of the plan between January 19, 2027 and July 19, 2027 .
On September 14, 2026 , Daniel Rabinowitz , our chief legal officer and secretary , adopted a Rule 10b5-1 Trading Plan that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c). Mr. Rabinowitz’s Rule 10b5-1 Trading Plan provides for the potential sale of up to 60,000 shares of our common stock pursuant to the terms of the plan between January 2, 2027 and December 31, 2028.
On September 14, 2026 , John Fesko , our chief business officer , adopted a Rule 10b5-1 Trading Plan that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c). Mr. Fesko’s Rule 10b5-1 Trading Plan provides for the potential sale of up to 90,000 shares of our common stock pursuant to the terms of the plan between December 14, 2026 and December 31, 2027 .
On September 14 2026 , Roy Baynes , a member of the Company's board of directors , adopted a Rule 10b5-1 Trading Plan that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c). Mr. Baynes’ Rule 10b5-1 Trading Plan provides for the exercise of up to 6,869 stock options and sale of underlying shares of common stock pursuant to the terms of the plan, between December 14, 2026 and December 15, 2027.
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ITEM 6 EXHIBITS
INDEX TO EXHIBITS
| Incorporated by Reference | |||||||||||||||||||||||
| Exhibit No. | Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | |||||||||||||||||
| 31.1 | X | ||||||||||||||||||||||
| 31.2 | X | ||||||||||||||||||||||
| 32.1† | X | ||||||||||||||||||||||
| 32.2† | X | ||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | X | |||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. | X | |||||||||||||||||||||
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | |||||||||||||||||||||
†The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Natera, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, regardless of any general incorporation language contained in any filing.
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SIGNATURES
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.
| NATERA, INC. | |||||||||||
Date: November 5, 2026 | By: | / s / Steve Chapman | |||||||||
| Name: | Steve Chapman | ||||||||||
| Title: | Chief Executive Officer, President, and Director | ||||||||||
| (Principal Executive Officer) | |||||||||||
| By: | / s / Michael Brophy | ||||||||||
| Name: | Michael Brophy | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||
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Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steve Chapman, certify that:
1.I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2026 of Natera, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026 | By: | / s / Steve Chapman | |||||||||
| Name: | Steve Chapman | ||||||||||
| Title: | Chief Executive Officer and President | ||||||||||
| (Principal Executive Officer) | |||||||||||
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Brophy, certify that:
1.I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2026 of Natera, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026 | By: | / s / Michael Brophy | |||||||||
| Name: | Michael Brophy | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Steve Chapman, Chief Executive Officer and President of Natera, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1)The quarterly report on Form 10-Q for the Company for the quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2026 | By: | / s / Steve Chapman | |||||||||
| Name: | Steve Chapman | ||||||||||
| Title: | Chief Executive Officer and President | ||||||||||
| (Principal Executive Officer) | |||||||||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Brophy, Chief Financial Officer of Natera, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1)The quarterly report on Form 10-Q for the Company for the quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2026 | By: | / s / Michael Brophy | |||||||||
| Name: | Michael Brophy | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||