MYRIAD GENETICS INC
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
MYGN$5.92-5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000899923-25-000048
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000899923-25-000086
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 120 current paragraphs.
53 unchanged; 14 reworded; 49 added; 13 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 8 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
We believe there are significant growth opportunities in addressing urgent healthcare needs through innovative molecular diagnostic and precision testing services. Our strategy is focused on three strategic pillars. First, we plan to drive accelerated growth and profitability by focusing on the Cancer Care Continuum, or CCC market. We plan to do so by increasing investment in research and development and enhancing our commercial capabilities and customer digital experience to better serve the CCC market. We also plan to leverage strategic partnerships and biopharma services to unlock new growth drivers and expand our portfolio of testing solutions to other high-growth cancer segments such as molecular residual disease (MRD). Second, we aim to grow our Prenatal Health and Mental Health revenues at or above market growth by leveraging our expanded prenatal offerings, including FirstGene Multiple Prenatal Screen, to drive increased volume. We also plan to focus on high value GeneSight accounts and leverage state biomarker laws to improve our reimbursement rates. Third, we plan to complement the revenue growth drivers outlined above with an enhanced focus and commitment on delivering sustained, profitable growth. By maintaining financial discipline, growing revenue faster than operating expenses, and strengthening our planning and execution capabilities, we believe we can increase our profitability while delivering sustained revenue growth.
Current report
•In July 2025, we closed a $125 million secured term debt financing with OrbiMed (“the Agreement”), a leading global healthcare investment firm. This Agreement includes an option to borrow up to an additional $75 million.
Current report
•In July 2025, we earned the Great Place to Work Certification for the third consecutive year.
Current report
•In June 2025, we launched early access of FirstGene Multiple Prenatal Screen, a prenatal genetic risk assessment screen that combines several testing modalities into a single assay, in a large, multi-site study, called CONNECTOR.
Current report
•In May 2025, at the American Society of Clinical Oncology (ASCO) Annual Meeting, our partner the National Cancer Center Hospital East in Japan presented MRD data from the MONSTAR-SCREEN-3 prospective study which we believe demonstrates successful pan-cancer implementation of whole genome sequencing (WGS)-based personalized circulating tumor DNA, or ctDNA, detection. In more than 100 patients, the interim results of this study show 100% baseline detection of ctDNA across tumor types, including those traditionally challenging to assess, detection of tumor fractions as low as 0.0001%, and a lead time in detecting recurrence compared to imaging. We believe this data demonstrates the potential importance of our ultra-sensitive Precise MRD test compared to first-generation MRD tests.
Current report
The following table summarizes year-over-year revenue changes in our core product categories:
Current report
Revenues increased $1.6 million for the three months ended June 30, 2025 compared to the same period in the prior year primarily due to an increase in the average revenue per test, due in part to changes in contracted price and operational improvements, which was partially offset by a 1% decrease in volume. Hereditary Cancer revenues increased $4.8 million for the three months ended June 30, 2025 compared to the same period in the prior year primarily due to a 7% increase in volume. Prenatal revenues increased $3.2 million for the three months ended June 30, 2025 compared to the same period in the prior year due to a 17% increase in average revenue per test partially offset by an 8% decrease in volume. These increases in Hereditary Cancer and Prenatal revenues were partially offset by decreases in Pharmacogenomics and Tumor Profiling revenue. Pharmacogenomics revenues decreased $5.2 million for the three months ended June 30, 2025 compared to the same period in the prior year due to a 16% decrease in average revenue per test. We expect that Pharmacogenomics revenues during the remainder of fiscal year 2025 and thereafter will continue to be negatively impacted by UnitedHealthcare's change in GeneSight test coverage under its commercial and individual exchange benefits plans. Tumor Profiling revenue decreased $1.2 million primarily due to the sale of our EndoPredict business in August 2024.
Current report
Research and Development Expense
Current report
Sales and Marketing Expense
Current report
Sales and marketing expenses for the three months ended June 30, 2025 were relatively consistent with the expenses incurred in the same period of the prior year, reflecting stable operating activities across the business.
Current report
General and Administrative Expense
Current report
General and administrative expense decreased by $5.3 million for the three months ended June 30, 2025 compared to the prior year primarily due to a decrease in consulting fees, a decrease in amortization for previously impaired intangible assets, and compensation expenses.
Current report
Goodwill and Long-lived Asset Impairment Charges
Current report
Goodwill and long-lived asset impairment charges of $316.7 million in the three months ended June 30, 2025 consisted of goodwill impairment charges of $234.7 million and intangible asset impairment charges of $82.0 million related to our Women's Health and Pharmacogenomics reporting units. For additional information regarding the testing and analysis performed, refer to "Critical Accounting Estimates" below. In the prior year, we recognized $11.6 million of losses in connection with the sale of the EndoPredict business.
Current report
Other income (expense), net for the three months ended June 30, 2025 decreased $0.7 million as compared to the same period in the prior year due to an increase in interest expense.
Current report
Income Tax Benefit
Current report
For the three months ended June 30, 2025, there was $0.1 million income tax benefit and our effective tax rate was 0.0%. For the three months ended June 30, 2024, there was $0.5 million income tax benefit and our effective tax rate was 1.3%. For the three months ended June 30, 2025 and 2024, our effective tax rate differs from the U.S. federal statutory rate primarily due to the recognition of valuation allowances and uncertain tax positions. Due to our cumulative loss and the exhaustion of future taxable income from the reversal of taxable temporary differences, our estimated annual effective tax rate for the current year period includes a valuation allowance against the majority of the current year increase in deferred tax assets, including any tax-deductible loss from the $316.7 million of goodwill and long-lived impairment charges recorded during the three months ended June 30, 2025.
Current report
Results of Operations for the Six Months Ended June 30, 2025 and 2024
Current report
Revenue
Current report
Cost of Revenue
Current report
Research and Development Expense
Current report
Research and development expense for the six months ended June 30, 2025 were relatively consistent with the expenses incurred in the same period of the prior year, reflecting stable operating activities across the business.
Current report
Sales and Marketing Expense
Current report
Sales and marketing expense for the six months ended June 30, 2025 were relatively consistent with the expenses incurred in the same period of the prior year, reflecting stable operating activities across the business.
Current report
General and Administrative Expense
Current report
General and administrative expense decreased by $9.4 million for the six months ended June 30, 2025 compared to the prior year primarily due to a decrease of $4.1 million in consulting fees, a $3.4 million decrease in amortization for previously impaired intangible assets, and a $3.2 million decrease in compensation and benefits.
Current report
Goodwill and Long-lived Asset Impairment Charges
Current report
Goodwill and long-lived asset impairment charges in the six months ended June 30, 2025 included goodwill impairment charges of $234.7 million and intangible asset impairment charges of $82.0 million related to our Women's Health and Pharmacogenomics reporting units. For additional information regarding the testing and analysis performed, refer to "Critical Accounting Estimates" in this Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations." In the prior year, we recognized $11.6 million of losses in connection with the sale of the EndoPredict business.
Current report
Other Income (Expense), Net
Current report
Income Tax Benefit
Current report
On July 31, 2025 (the "Closing Date"), we entered into a Credit Agreement (the "Credit Agreement") with the lenders from time to time party thereto, and OrbiMed Royalty & Credit Opportunities IV, LP., as administrative agent (the "Administrative Agent") and as initial lender (“OrbiMed”). The Credit Agreement consists of a $200 million term loan credit facility with an initial term loan of $125 million (the "Initial Loan"), which amount was funded on the Closing Date, and delayed draw term loans (the "Delayed Draw Loans" and together with the Initial Loan, the "Loans"), at our election on or prior to June 30, 2027, in a maximum principal amount of $75 million (the "Credit Facility"). The proceeds of the Credit Facility were or will be used for working capital needs and general corporate purposes, including, without limitation, refinancing existing indebtedness, including $60.2 million of the proceeds to repay the ABL Facility in full.
Current report
The Credit Facility matures on July 31, 2030 (the "Maturity Date"). Loans outstanding under the Credit Facility will bear interest at a rate per annum equal to (x) the greater of the one-month SOFR Rate and 2.50% plus (y) an applicable margin of 6.50%. Commencing on September 30, 2029, and on the last business day of each fiscal quarter thereafter, we are required to make a scheduled principal payment equal to 2.50% of the unpaid principal amount of the loans outstanding on the fourth anniversary of the Closing Date, together with any applicable exit fee and repayment premium.
Current report
We mayelect to prepay all or any portion of the amounts owed prior to the Maturity Date subject to a repayment premium. The Credit Facility is also subject to customary mandatory prepayments with the proceeds of indebtedness and certain asset sales and casualty events. In addition to the repayment premium referenced above, voluntary and mandatory prepayments and all other payments of the Credit Facility must also be accompanied by payment of accrued interest on the principal amount repaid or prepaid. The Credit Facility is also subject to other customary fee arrangements.
Current report
The Credit Facility is secured by substantially all of our assets and those of our subsidiary guarantors under a Pledge and Security Agreement entered into with the Administrative Agent.
Current report
The Credit Facility requires us and our subsidiaries, on a consolidated basis, to comply with a minimum trailing twelve-month revenue test as of the end of each month, commencing with the month ending December 31, 2025 at $615.0 million and increasing quarterly to $974.0 million beginning on December 31, 2029 and thereafter. In addition, the Credit Facility contains customary representations and warranties and affirmative and negative covenants, including covenants that limit or restrict us and our subsidiaries’ ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements. The Credit Facility includes a number of customary events of default, including, among other things, nonpayment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and the occurrence of a change of control. If any event of default occurs (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Credit Facilitymay become due and payable immediately.
Current report
We used $13.9 million more cash for operating activities for the six months ended June 30, 2025 compared to the same period in the prior year. The increase in cash used for operating activities was primarily driven by a $10.9 million decrease in cash collected from accounts receivables driven by timing differences in collections.
Current report
Cash flows used in investing activities for the six months ended June 30, 2025 were relatively consistent with the same period of the prior year, reflecting stable investing activities across the business.
Current report
During the second quarter of 2025, we concluded that an impairment triggering event had occurred due to a further sustained decline in our market capitalization, resulting in our carrying value of these assets exceeding our total market capitalization. Additional factors that contributed to this conclusion included downward revisions to our forecasts. These factors were applicable to all of our reporting units, developed technology intangible assets, and certain other intangible assets. Thus, we performed quantitative impairment testing on our goodwill and intangible assets as discussed above. See also Note 5, "Goodwill and Intangible Assets" in the notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current report
Based on the outcome of these assessments, we recognized goodwill and asset impairment charges totaling $316.7 million.
Current report
Goodwill. We test goodwill for impairment by reporting unit on an annual basis and in the interim if events and circumstances indicate that goodwill may be impaired. The events and circumstances that are considered include business climate and market conditions, legal factors, operating performance indicators and competition. Impairment of goodwill is evaluated on a qualitative basis before calculating the fair value of the reporting unit. If the qualitative assessment suggests that impairment is more likely than not, a quantitative impairment analysis is performed. The quantitative analysis involves comparison of the fair value of a reporting unit with its carrying amount. The valuation of a reporting unit requires judgment in estimating future cash flows, discount rates, residual growth rates and other factors. In making these judgments, we evaluate the financial health of our business, including such factors as industry performance, market saturation and opportunity, changes in technology and operating cash flows, and other relevant entity-specific events. Goodwill impairment testing requires us to make a number of assumptions and estimates concerning future levels of revenue growth, operating margins, and other financial assumptions, which are based upon our long-term plan. The discount rate is an estimate of the overall after-tax rate of return required by a market participant whose weighted average cost of capital includes both debt and equity, including a risk premium. While we use the best available information to prepare our cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances. While changes in assumptions will occur to reflect changing business and market conditions, our overall methodology used has remained unchanged. Changes in our forecasts or decreases in the value of our common stock could cause book value of reporting units to exceed their fair values. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. If an event occurs that would cause a revision to the estimates and assumptions used in analyzing the value of the goodwill, the revision could result in a non-cash impairment charge that could have a material impact on our financial results.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Removed paragraphs (13)
Previous report
Personalized molecular data and digital and virtual consumer trends are converging to transform traditional models of care. We believe that engaging with providers and patients throughout their consumer or patient journey will better enable us to execute our strategies and fulfill our mission. We believe there are significant growth opportunities in addressing the pressing healthcare needs of patient populations through innovative molecular diagnostic testing and precision medicine solutions and services. Our focus is on innovation and growth in three key areas where we have specialized products, capabilities, and expertise: Oncology, Women's Health, and Pharmacogenomics.
Previous report
Our long-term growth strategy is built on investments in science and innovation, technology-enabled operations, an enhanced customer experience, strong commercial execution, and scalable operations. To drive continued growth, we plan to accelerate electronic medical records (EMR) integrations, expand our sales channels, including into large health systems, cross sell our portfolio of testing products to providers, enhance our testing products within medical guidelines, demonstrate our clinical differentiation and value compared to the standard of care, and optimize our revenue cycle processes. We also continue to invest in clinical evidence development to support the growth of our existing products and launch of new products, such as FirstGene, Precise Liquid, and Precise molecular residual disease (MRD) which we expect will help us continue to grow. We intend to continue to develop and enhance our products and services to support growth, improve patient and provider experience, and reach more patients of all backgrounds.
Previous report
In addition, by investing in technology-enabled commercial tools, new laboratory facilities, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow. We are committed to making molecular testing accessible and actionable for patients and providers while driving long-term growth and profitability.
Previous report
•Samraat Raha has been appointed President and Chief Executive Officer, effective April 30, 2025.
Previous report
•Mark Verratti has been appointed Chief Operating Officer, effective April 30, 2025.
Previous report
•Brian Donnelly has been appointed Chief Commercial Officer, effective May 1, 2025.
Previous report
•In April 2025, new clinical data on the Precise MRD test in oligometastatic clear-cell Renal Cell Carcinoma was presented at the American Association for Cancer Research.
Previous report
Operating Expenses
Previous report
Income Tax (Benefit) Expense
Previous report
On June 30, 2023, we entered into an ABL Facility with an initial maximum principal amount of $90.0 million. On October 31, 2023, we entered into an amendment to the ABL Facility pursuant to which we increased the maximum principal amount of the available revolving line of credit by $25.0 million for a total maximum principal commitment of $115.0 million under the ABL Facility.
Previous report
Our ABL Facility has a total maximum principal commitment of $115.0 million. The ABL Facility requires that we and our subsidiaries guaranteeing the indebtedness, on a consolidated basis, maintain a fixed charge coverage ratio of at least 1.0 to 1.0 if availability under the ABL Facility is less than the greater of (a) $10.6 million and (b) 12.5% of the lesser of the maximum commitment amount and the borrowing base. As of March 31, 2025, we had $60.0 million outstanding under the ABL Facility and our availability under the ABL Facility was $41.9 million.
Previous report
We used $2.3 million less cash for operating activities for the three months ended March 31, 2025 compared to the same period in the prior year. The improvement in cash used for operating activities was driven by an overall improvement in our operating assets and liabilities of $6.7 million and annual cash bonuses for senior leaders not being paid until the second quarter of 2025, whereas in the prior year annual bonuses were paid in the first quarter of 2024.
Previous report
Cash flows used in investing activities increased $1.2 million for the three months ended March 31, 2025 compared to the same period in the prior year. The increase was primarily due to an increase in the capitalization of intangible assets expenditures for software developed for internal use.
Reworded paragraphs (14)
Previous wording
•other factors discussed under the heading "Risk Factors" contained in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on February 28, 2025, as updated in Part II, Item 1A of this Quarterly Report on Form 10-Q, and subsequent filings we make with the SEC.
Current wording
•other factors discussed under the heading "Risk Factors" contained in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on February 28, 2025 as updated under the heading "Risk Factors" in Part II, Item 1A of our Quarterly Report on Form 10-Q filed with the SEC on May 7, 2025 and this Quarterly Report on Form 10-Q, and subsequent filings we make with the SEC.
Previous wording
We are a leading molecular diagnostic testing and precision medicine company dedicated to advancing health and well-being for all. We develop and offer molecular tests that help assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where molecular insights can significantly improve patient care and lower health care costs. Our molecular tests provide insights that help people take control of their health and enable healthcare providers to better detect, treat, and prevent disease.
Current wording
We are a leading molecular diagnostic testing and precision company dedicated to advancing health and well-being for all. We develop and offer molecular tests that help assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where molecular insights can significantly improve patient care and lower health care costs. Our molecular tests provide insights that help people take control of their health and enable healthcare providers to better detect, treat, and prevent disease.
Previous wording
Cost of revenue for the three months ended March 31, 2025 decreased $2.9 million compared to the same period in the prior year primarily due to a reduction in the cost per test for the current period.
Current wording
Cost of revenue for the three months ended June 30, 2025 decreased $3.1 million compared to the same period in the prior year primarily due to a reduction in the cost per test for the current period driven by reductions in the cost of laboratory reagents and supplies.
Previous wording
For the three months ended March 31, 2025, operating expenses were relatively consistent with the expenses incurred in the same period of the prior year, reflecting stable operating activities across the business. The Company remains committed to disciplined cost management while maintaining investments in key strategic areas, such as research and development.
Current wording
Research and development expenses for the three months ended June 30, 2025 were relatively consistent with the expenses incurred in the same period of the prior year, reflecting stable operating activities across the business. We remain committed to disciplined cost management while maintaining investments in key strategic areas, such as research and development.
Previous wording
Revenue decreased $6.3 million for the three months ended March 31, 2025 compared to the same period in the prior year. For the three months ended March 31, 2024, the Company recognized $7.0 million of revenue for tests in which the performance obligation was met in a prior period, including $3.0 million in revenue due to a retroactive coverage change by a payor for one of its prenatal products. For the three months ended March 31, 2025, revenue for tests in which the performance obligation was met in a prior period was immaterial.
Current wording
Revenue decreased $4.7 million for the six months ended June 30, 2025 compared to the same period in the prior year. For the six months ended June 30, 2024, we recognized $9.3 million of revenue for tests in which the performance obligation was met in a prior period, including $3.0 million in revenue due to a retroactive coverage change by a payor for one of its prenatal products. For the six months ended June 30, 2025, revenue for tests in which the performance obligation was met in a prior period was immaterial.
Previous wording
Pharmacogenomics revenue decreased $7.9 million for the three months ended March 31, 2025 compared to the same period in the prior year due primarily to a 22% decrease in the average revenue per test. Pharmacogenomics revenue for the three months ended March 31, 2025 has been negatively impacted by UnitedHealthcare’s recent change in coverage of the GeneSight test under its commercial, individual exchange benefit, and certain managed Medicaid plans. We expect this coverage decision will continue to negatively affect revenue in future periods. Hereditary Cancer revenue decreased $1.8 million for the three months ended March 31, 2025 compared to the same period in the prior year due to a 5% decrease in average revenue per test, partially offset by a 3% increase in testing volume. Tumor Profiling revenue decreased $1.6 million for the three months ended March 31, 2025 compared to the same period in the prior year due primarily to a decrease in testing volume for EndoPredict due to the sale of our EndoPredict business in August 2024. These decreases were partially offset by an increase in revenue from Prenatal.
Current wording
Pharmacogenomics revenue decreased $13.1 million for the six months ended June 30, 2025 compared to the same period in the prior year due primarily to a 19% decrease in the average revenue per test. Pharmacogenomics revenue for the six months ended June 30, 2025 has been negatively impacted by UnitedHealthcare’s change in coverage of the GeneSight test under its commercial, individual exchange benefit, and certain managed Medicaid plans. We expect this coverage decision will continue to negatively affect revenue in future periods. Tumor Profiling revenue decreased $2.8 million for the six months ended June 30, 2025 compared to the same period in the prior year due primarily to a decrease in volume for EndoPredict due to the sale of our EndoPredict business in August 2024. These decreases in revenue were partially offset by growth in our Prenatal and Hereditary Cancer revenues. Prenatal revenue increased $8.2 million for the six months ended June 30, 2025 compared to the same period in the prior year due to a 14% increase in average revenue per test, partially offset by a 4% decrease in volume primarily driven by decline in volume for SneakPeek. Hereditary Cancer revenue increased $3.0 million for the six months ended June 30, 2025 compared to the same period in the prior year due to a 5% increase in volume, partially offset by a 3% decrease in average revenue per test.
Previous wording
Other income (expense), net decreased for the three months ended March 31, 2025 as compared to the same period in the prior year due primarily to the $2.2 million gain recognized on the Precise Tumor acquisition in the prior period.
Current wording
Other income (expense), net changed for the six months ended June 30, 2025 as compared to the same period in the prior year due primarily due to an increase in interest expense for the current period and due to the $2.2 million gain recognized on the Precise Tumor acquisition in the prior period
Previous wording
Income tax benefit for the three months ended March 31, 2025 was $29.3 million and our effective tax rate was 99.7%. Income tax expense for the three months ended March 31, 2024 was $0.1 million and our effective tax rate was (0.4)%. For the three months ended March 31, 2025 and 2024, our recognized effective tax rate differs from the U.S. federal statutory rate primarily due to the release of unrecognized tax benefits and the recognition of valuation allowances. The unrecognized tax benefits released were primarily related to tax refund claims following the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, that allowed the carryback of losses related to tax years ended June 30, 2017 through June 30, 2020. During the three months ended March 31, 2025, we were notified by the Joint Committee on Taxation that it had concluded its review of these tax refund claims.
Current wording
Income tax benefit for the six months ended June 30, 2025 was $29.4 million and our effective tax rate was 8.2%. Income tax benefit for the six months ended June 30, 2024 was $0.4 million and our effective tax rate was 0.6%. For the three and six months ended June 30, 2025 and 2024, our recognized effective tax rate differs from the U.S. federal statutory rate primarily due to the release of unrecognized tax benefits and the recognition of valuation allowances. The unrecognized tax benefits released were primarily related to tax refund claims following the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. Following the success of these claims, we remeasured or released the unrecognized benefits resulting in a discrete tax benefit of $29.6 million during the six months ended June 30, 2025. Due to our cumulative loss and the exhaustion of future taxable income from the reversal of taxable temporary differences, our estimated annual effective tax rate for the current year includes a valuation allowance against the majority of the current year increase in deferred tax assets, including any tax-deductible loss from the $316.7 million of goodwill and long-lived impairment charges recorded for the six months ended June 30, 2025.
Previous wording
Our primary sources of liquidity are our cash and cash equivalents, our expected cash flows from operations, and, in certain circumstances as discussed below, amounts available for borrowing under our asset-based revolving credit facility ("ABL Facility"). As of March 31, 2025, we had cash and cash equivalents of $91.8 million and our availability under the ABL Facility was $41.9 million. Our capital deployment strategy focuses on use of resources in the key areas of research and development, technology, and acquisitions. We believe that investing organically through research and development and new product development or acquisitively to support our business strategy provides the best return on invested capital.
Current wording
Our primary sources of liquidity are our cash and cash equivalents, our expected cash flows from operations, and, in certain circumstances as discussed below, amounts available for borrowing under our new debt financing with Orbimed discussed below. Our capital deployment strategy focuses on use of resources in the key areas of research and development, technology, and collaborations. We believe that investing organically through research and development and new product development or collaborations to support our business strategy provides the best return on invested capital.
Previous wording
We believe that our existing capital resources will be sufficient to meet our projected operating requirements for at least the next 12 months. Our available capital resources, however, may be consumed more rapidly than currently expected, or may be insufficient for our business needs for many reasons, including as a result of our operational cash needs or capital expenditures. As a result, we may need or want to raise additional financing. We may not be able to secure such financing in a timely manner or on favorable terms, if at all. In addition, we are subject to covenants under our ABL Facility which could limit our ability to incur additional indebtedness or impact our ability to pursue other financing. Our ability to raise capital through equity or equity-based financing may also be constrained by the current price of our common stock, and any such financing could result in dilution to existing stockholders. If we do not gene rate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our ABL Facility and we are unable to secure additional funds on acceptable terms, or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations; or delay development of our tests in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals could be adversely affected.
Current wording
We believe that our existing capital resources will be sufficient to meet our projected operating requirements for at least the next 12 months. Our available capital resources, however, may be consumed more rapidly than currently expected, or may be insufficient for our business needs for many reasons, including as a result of our operational cash needs or capital expenditures. Our available cash from operations has been and may continue to be impacted by delays in the timing of the payment of receivables due to claims review, audit and appeal processes. In addition, we are subject to covenants under our Credit Facility which could limit our ability to incur additional indebtedness or impact our ability to pursue other financing. If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our Credit Facility and we are unable to secure additional funds on acceptable terms, or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations; or delay development of our tests in an effort to provide sufficient funds to continue our operations. If any of these events occur, our ability to achieve our development and commercialization goals could be adversely affected.
Previous wording
Third-party payors, including state and federal health care programs such as Medicare, managed care organizations, and other private health insurers, are increasingly attempting to contain health care costs by limiting or denying coverage for certain tests and reducing reimbursement rates for both new and existing tests. We have experienced and may continue to experience coverage limitations or denials for many of our products. For example, UnitedHealthcare updated its medical policies for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial, individual exchange benefit, and certain managed Medicaid plans, effective during the first half of 2025. The change in UnitedHealthcare coverage has negatively impacted our revenue, profitability, and cash flow in the first quarter of 2025 and we expect that these negative impacts will continue into future periods.
Current wording
Third-party payors, including state and federal health care programs such as Medicare, managed care organizations, and other private health insurers, are increasingly attempting to contain health care costs by limiting or denying coverage for certain tests and reducing reimbursement rates for both new and existing tests. We have experienced and may continue to experience coverage limitations or denials for many of our products. For example, UnitedHealthcare updated its medical policies for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial, individual exchange benefit, and certain managed Medicaid plans, effective during the first half of 2025. The change in UnitedHealthcare coverage has negatively impacted our revenue, profitability, and cash flow in the first half of 2025 and we expect that these negative impacts will continue into future periods.
Previous wording
The decrease in cash and cash equivalents as of March 31, 2025 as compared to December 31, 2024 was primarily driven by $16.3 million in cash used by operations, $5.3 million in cash used for capital expenditures, $3.0 million in cash used for the capitalization of internal-use software, and $5.8 million in cash used for the payment of withholding tax for the issuance of common stock, net of proceeds from the issuance of common stock. The decrease in cash was partially offset by $19.5 million increase in net borrowings under the ABL Facility.
Current wording
The decrease in cash and cash equivalents as of June 30, 2025 as compared to December 31, 2024 was primarily driven by $29.9 million in cash used by operations, $15.2 million in cash used for capital expenditures including the capitalization of internal-use software, and $3.1 million in cash used for the payment of withholding tax for the issuance of common stock, net of proceeds from the issuance of common stock. The decrease in cash was partially offset by $19.5 million increase in net borrowings under the ABL Facility.
Previous wording
Cash flows from financing activities increased $22.4 million for the three months ended March 31, 2025 compared to cash flows used in financing activities in the same period in the prior year, primarily due to the incremental borrowing of $19.5 million from the ABL Facility.
Current wording
Cash flows from financing activities increased $22.6 million for the six months ended June 30, 2025 compared to cash flows used in financing activities in the same period in the prior year, primarily due to the incremental borrowing of $19.5 million from the ABL Facility.
Previous wording
Critical accounting estimates are those policies which are both important to the presentation of a company’s financial condition and results and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a further discussion of our critical accounting estimates, see our Annual Report on Form 10-K filed with the SEC on February 28, 2025. No significant changes to our accounting policies took place during the three months ended March 31, 2025.
Current wording
Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on a company's financial condition or results of operations. For a further discussion of our critical accounting estimates, see our Annual Report on Form 10-K filed with the SEC on February 28, 2025. No significant changes to our critical accounting estimates took place during the three months ended June 30, 2025, except as described below:
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Our tax rate is the product of a U.S. federal effective rate of 21.0% and a blended state income tax rate of approximately 3.4%. Certain significant or unusual items are separately recognized during the period in which they occur and can be a source of variability in the effective tax rates from period to period.
Current report — wording carried from elsewhere
The results of operations for the six months ended June 30, 2025 and 2024 are discussed below.
Current report — wording carried from elsewhere
The following table summarizes volume changes in our core product categories:
Current report — wording carried from elsewhere
Cost of revenue for the six months ended June 30, 2025 decreased $5.9 million compared to the same period in the prior year primarily due to a reduction in the cost per test for the current period driven by reduction in the cost of laboratory reagents and supplies.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Prenatal revenue increased $5.0 million for the three months ended March 31, 2025 compared to the same period in the prior year due to an 11% increase in average revenue per test.
Previous report — wording carried elsewhere
We remeasured or released the unrecognized benefits resulting in a discrete tax benefit of $29.6 million. Due to our cumulative loss and the exhaustion of future taxable income from the reversal of taxable temporary differences, our estimated annual effective tax rate for the current year includes a valuation allowance against the majority of the current year increase in deferred tax assets.