Personalis, Inc.

Previous wording

We develop, market, and sell advanced cancer genomic tests and services. Our services are used by pharmaceutical companies for translational research, biomarker discovery, the development of personalized cancer therapies, and for clinical trials. Our tests are used by physicians to detect residual or recurrent cancer in patients, monitor cancer response to therapy, and uncover insights for therapy selection. We also provide whole exome and whole genome sequencing services for other diagnostic companies and population sequencing initiatives.

Current wording

We develop, market, and sell advanced cancer genomic tests and services. Our services are used by pharmaceutical companies for translational research, biomarker discovery, the development of personalized cancer therapies, and for clinical trials. Our tests are used by physicians to detect residual or recurrent cancer in patients, monitor cancer response to therapy, and uncover insights for therapy selection. We also provide whole exome and whole genome sequencing (“WGS”) services for other diagnostic companies and population sequencing initiatives.

Previous wording

Today, our products are routinely used by many of the largest oncology-focused pharmaceutical companies for analysis of patient samples in their clinical trials and drug development programs. Our advanced genomic sequencing and analytics also support the development of personalized neoantigen therapies for cancer and other next-generation cancer immunotherapies. For example, we are providing genomic testing to Moderna, Inc. ("Moderna") in its ongoing clinical trials evaluating a personalized cancer therapy. In addition, we partner with diagnostics companies by providing our advanced tumor profiling and analysis capabilities as an input to their products. More recently, we launched new diagnostic offerings for the clinical setting and, in November 2023, entered into an agreement with Tempus to commercialize our NeXT Personal Dx test. We have also pursued non-cancer related business opportunities, specifically within the population sequencing market, by providing whole genome sequencing ("WGS") services under contract with the U.S. Department of Veterans Affairs Million Veteran Program ("VA MVP").

Current wording

Today, our products are routinely used by many of the largest oncology-focused pharmaceutical companies for analysis of patient samples in their clinical trials and drug development programs. Our advanced genomic sequencing and analytics also support the development of personalized neoantigen therapies for cancer and other next-generation cancer immunotherapies. For example, we are providing genomic testing to ModernaTX, Inc. ("Moderna") in its ongoing clinical trials evaluating a personalized cancer therapy. In addition, we partner with diagnostics companies by providing our advanced tumor profiling and analysis capabilities as an input to their products. More recently, we launched new diagnostic offerings for the clinical setting and, in November 2023, entered into an agreement with Tempus AI, Inc. (“Tempus”) to commercialize our NeXT Personal Dx test. We have also pursued non-cancer related business opportunities, specifically within the population sequencing market, by providing WGS services under contract with the U.S. Department of Veterans Affairs Million Veteran Program ("VA MVP").

Previous wording

Key business accomplishments and financial updates in the first quarter of 2025 include:

Current wording

Key business accomplishments and financial updates in the second quarter of 2025 include:

Previous wording

Pharma tests and services includes sales of testing services and data analytics for clinical trials and research to pharmaceutical companies in support of their drug development programs.

Current wording

Pharma tests and services includes sales of testing services and data analytics for clinical trials and research to pharmaceutical companies in support of their oncology drug development programs.

Previous wording

Our ability to increase revenue will depend on our ability to further increase sales to these groups of customers and expand our customer base within each group. To do this, we are developing a growing set of state-of-the-art services and products; advancing our operational infrastructure; building our regulatory credentials; focusing our marketing efforts on large pharmaceutical companies; building and publishing the clinical evidence-base to support our products and services in our key indications, pursuing reimbursement coverage from Medicare and other payors; and seeking additional partnerships. We market to biopharma customers and doctors through a small direct sales force. In late 2023, we entered into an agreement with Tempus to commercialize NeXT Personal Dx in the clinical diagnostics market and will be leveraging Tempus' significantly larger sales force as a key vector to grow our clinical diagnostic business. In late 2024, we expanded our collaboration partnership with Tempus to enable Tempus to market and sell NeXT Personal to Tempus' pharmaceutical and biotech customers who wish to bundle MRD testing with other Tempus offerings in a given study.

Current wording

Our ability to increase revenue will depend on our ability to further increase sales to these groups of customers and expand our customer base within each group. To do this, we are developing a growing set of state-of-the-art services and products; advancing our operational infrastructure; building our regulatory credentials; focusing our marketing efforts on large pharmaceutical companies; building and publishing the clinical evidence-base to support our products and services in our key indications, pursuing reimbursement coverage from Medicare and other payors; and seeking additional partnerships. We market to biopharma customers and doctors through a small direct sales force. In late 2023, we entered into the Tempus Agreement to commercialize NeXT Personal Dx in the clinical diagnostics market and will be leveraging Tempus' significantly larger sales force as a key vector to grow our clinical diagnostic business. In late 2024, we expanded our collaboration partnership with Tempus to enable Tempus to market and sell NeXT Personal to Tempus' pharmaceutical and biotech customers who wish to bundle MRD testing with other Tempus offerings in a given study. In July 2025, we further expanded our collaboration partnership with Tempus to authorize Tempus to market NeXT Personal Dx for colorectal cancer and extend the term of the Tempus Agreement through November 25, 2029.

Previous wording

Other income (expense), net includes foreign currency exchange gains and losses. Other income (expense), net during the first quarter of 2024 consists primarily of a noncash gain related to the remeasurement of the warrants issued in connection with our November 2023 agreement with Tempus.

Current wording

Other income (expense), net includes foreign currency exchange gains and losses. Other income (expense), net during the three and six months ended June 30, 2024 consisted primarily of a noncash gain related to the remeasurement of the warrants issued in connection with our November 2023 agreement with Tempus.

Previous wording

(2) Includes related party sales and marketing expenses of $0.6 million for the three months ended March 31, 2025.

Current wording

(2) Includes related party sales and marketing expenses of $0.9 million and $1.5 million for the three and six months ended June 30, 2025, respectively.

Previous wording

(1) Includes related party accounts receivable of $0.5 million and $2.5 million as of March 31, 2025 and December 31, 2024, respectively.

Current wording

(1) Includes related party accounts receivable of $1.9 million and $2.5 million as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

(2) Includes related party liabilities of $4.0 million and $2.9 million as of March 31, 2025 and December 31, 2024, respectively.

Current wording

(2) Includes related party liabilities of $4.8 million and $2.9 million as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

The following table shows customers that made up at least 10% of total revenue in each period presented:

Current wording

The following table shows customers that made up at least 10% of total revenue in at least one of the periods presented:

Previous wording

The increase in pharma tests and services revenue in the first quarter of 2025 was due to higher clinical trial samples processed for Moderna. We may see some variability in revenue for this customer over the next few quarters depending on timing of their ongoing trial enrollments. We expect continued growth in revenue from pharma tests and services as demand increases for our Next Personal MRD tests.

Current wording

The decrease in pharma tests and services revenue in the second quarter of 2025 was primarily due to fewer clinical trial samples processed for Moderna. We expect variability in revenue from pharmaceutical companies in the future due to the timing of their trial enrollments or project schedules. The increase in revenue from pharma tests and service revenue for the first half of 2025 compared to the same period of 2024 reflected an increased demand for our Next Personal MRD tests.

Previous wording

Revenue from enterprise sales decreased in the first quarter of 2025 due to a decrease of approximately 65% in the number of samples we processed for Natera compared to the same quarter in 2024.

Current wording

The decreases in revenue from enterprise sales in the second quarter of 2025 and the first half of 2025 were mainly due to a 74% and a 70% decrease in the number of samples we processed for Natera compared to the same periods of 2024.

Previous wording

Our total revenue from Natera in 2025 is expected to be lower from comparable periods in 2024 due to a forecasted decrease in the number of samples processed. Our agreement with Natera includes minimum volume commitments through the second quarter of 2025 and we do not expect a long-term commercial relationship with Natera beyond this year.

Current wording

Our total revenue from Natera in 2025 is expected to be lower from comparable periods in 2024 due to the expected decrease in the number of samples processed. Our agreement with Natera included minimum volume commitments through the second quarter of 2025 and we do not expect to continue a long-term commercial relationship with Natera beyond this year.

Previous wording

Revenue recognized each period from population sequencing is impacted by timing of our fulfillment of samples under each annual task order. The increase in revenue in the first quarter of 2025 compared to the same quarter in 2024 was due to an increase in the number of samples we processed.

Current wording

Revenue recognized each period from population sequencing is impacted by timing of our fulfillment of samples under each annual task order. The increases in revenue in the second quarter of 2025 and in the first half of 2025 compared to the same periods of 2024 were due to increases in the number of samples processed.

Previous wording

Our annual task orders received from the VA MVP in 2024 and 2023 were $7.5 million each year. Our contract with the VA MVP does not include specific testing turnaround times. Therefore, we may modulate the volume of samples processed from the VA MVP to accommodate sample volumes from other customers, which can vary from period to period. We anticipate fulfilling the task order received in September 2024 during the first two quarters of 2025.

Current wording

Our annual task orders received from the VA MVP in 2024 and 2023 were $7.5 million each year. Our contract with the VA MVP does not include specific testing turnaround times. Therefore, we may modulate the volume of samples processed from the VA MVP to accommodate sample volumes from other customers in order to utilize lab capacity efficiently, which may vary from period to period. We fulfilled the task order received in September 2024 during the first two quarters of 2025.

Previous wording

Clinical diagnostic revenue is generated from Medicare and private insurance payors. In January 2024, we received a Medicare coverage determination for NeXT Dx, our ultra-comprehensive tumor genomic profiling assay. The revenue of $0.3 million in the first three months of 2025 was mainly attributable to an increase in NeXT Dx test volume and NeXT Personal Dx reimbursements received from some private payors.

Current wording

Clinical diagnostic revenue is generated from Medicare and private insurance payors. In January 2024, we received a Medicare coverage determination for NeXT Dx, our ultra-comprehensive tumor genomic profiling assay. The increases in clinical diagnostic revenue in the second quarter of 2025 and in the first half of 2025 compared to the same periods of 2024 were mainly attributable to an increase in NeXT Dx test volume and NeXT Personal Dx reimbursements received from certain private payors.

Previous wording

Selling, general and administrative expenses increased due to our marketing efforts related to NeXT Personal Dx in the first quarter of 2025 compared to the same quarter in 2024.

Current wording

The increases in selling, general and administrative expenses in the second quarter of 2025 and in the first half of 2025 compared to the same periods of 2024 were primarily due to expanded marketing programs related to NeXT Personal Dx.

Previous wording

Specific components of the increase in the first quarter of 2025 were a $0.8 million increase in marketing and marketing-related expenses and a $0.8 million increase in personnel costs, partially offset by a $0.5 million decrease in professional outside services and a $0.4 million decrease in allocated facilities costs.

Current wording

Specific components of the increase in the second quarter of 2025 were a $1.4 million increase in marketing and marketing related activities such as trade show expenses and Tempus' sales & marketing expenses, a $0.8 million increase in personnel costs and a $0.5 million increase in costs for marketing to physicians, partially offset by a $0.5 million decrease in professional outside services.

Previous wording

The increase in interest income in the first quarter of 2025 compared to the same quarter in 2024 was driven by higher average investment balances, partially offset by decreased yields. Interest expense is the recognition of imputed interest on noninterest bearing loans.

Current wording

The increases in interest income in the second quarter of 2025 and the first half of 2025 compared to the same periods of 2024 were driven by higher average investment balances, partially offset by decreased yields. Interest expense is the recognition of imputed interest on noninterest bearing loans.

Previous wording

Other income (expense), net, in the first quarter of 2025, consisted mainly of foreign currency remeasurements. Other income (expense), net, in the first quarter of 2024, consisted mainly of a $4.8 million noncash gain as a result of remeasurement of the Tempus Warrants (classified as liability instruments), partially offset by a $0.2 million reclassification of accumulated foreign currency translation loss to other income (expense), net, upon dissolution of our China entity (Personalis (Shanghai) Ltd.)

Current wording

Other income (expense), net, in the second quarter of 2025 and the first half of 2025, consisted mainly of foreign currency remeasurements. Other income (expense), net in the second quarter of 2024 and the first half of 2024 consisted mainly of a $3.0 million and a $7.7 million noncash gain, respectively, recognized as a result of remeasurement of the Tempus Warrants (classified as liability instruments). These noncash gains were partially offset by a $0.2 million reclassification of accumulated foreign currency translation loss to other income (expense), net, upon dissolution of our China entity (Personalis (Shanghai) Ltd.) in the first quarter of 2024.

Previous wording

From our inception through March 31, 2025, we have funded our operations primarily from net proceeds from issuance of redeemable convertible preferred stock, issuance of common stock through our initial public offering ("IPO"), follow-on equity offerings and ATM facility (see Note 2, Summary of Significant Accounting Policies, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information). Additionally, we have funded our operations from Tempus exercising warrants and purchasing additional shares of our common stock under an investment agreement, and Merck purchasing shares of our common stock under an investment agreement (see Note 8, Related Party Transactions, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), as well as debt financings. As of March 31, 2025, we had cash and cash equivalents of $71.0 million and short-term investments of $114.7 million.

Current wording

From our inception through June 30, 2025, we have funded our operations primarily from net proceeds from issuance of redeemable convertible preferred stock, issuance of common stock through our initial public offering, follow-on equity offerings and our ATM facility (see Note 2, Summary of Significant Accounting Policies, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information). Additionally, we have funded our operations from Tempus exercising warrants and purchasing additional shares of our common stock under an investment agreement, and Merck & Co., Inc.(“Merck”) purchasing shares of our common stock under an investment agreement (see Note 8, Related Party Transactions, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), as well as cash from operations and debt financings. As of June 30, 2025, we had cash and cash equivalents of $53.4 million and short-term investments of $119.9 million.

Previous wording

The decrease in cash used in operating activities in the first quarter of 2025 compared to the same quarter in 2024 was due to higher gross margin (due to a combination of higher revenue levels and higher gross margin percentage) and reduced working capital needs.

Current wording

The decrease in cash used in operating activities was primarily due to reduced working capital needs.

Previous wording

The increase in cash used by investing activities in the first quarter of 2025 compared to the same quarter in 2024 was due to investment of our cash into short-term investments and $2.4 million increase in capital expenditures.

Current wording

The increase in cash used by investing activities was due to investment of our cash into short-term investments and a $2.7 million increase in capital expenditures.

Previous wording

The increase in cash provided by financing activities in the first quarter of 2025 compared to the same quarter in 2024 was due to $16.3 million higher net proceeds from sales of common stock under our ATM facility and $2.6 million in proceeds from loans, partially offset by $0.3 million repayments of loans.

Current wording

The increase in cash provided by financing activities was due to $15.0 million higher net proceeds from sales of common stock under our ATM facility, $2.6 million in proceeds from loans and $0.3 million higher proceeds from our employee stock purchase program, partially offset by $0.8 million higher repayments of loans.

Previous wording

Our material cash requirements in the short- and long-term consist primarily of variable costs of revenue, operating expenditures, capital expenditures, property leases, and other spend. We plan to fund our material cash requirements with our existing cash and cash equivalents and short-term investments, which amounted to $185.7 million as of March 31, 2025, as well as anticipated cash receipts from customers. To fund our material cash requirements in the short- and long-term, we may also seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing.

Current wording

Our material cash requirements in the short- and long-term consist primarily of variable costs of revenue, operating expenditures, capital expenditures, property leases, and other spend. We plan to fund our material cash requirements with our existing cash and cash equivalents and short-term investments, which amounted to $173.2 million as of June 30, 2025, as well as anticipated cash receipts from customers. To fund our material cash requirements in the short- and long-term, we may also seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing.

Previous wording

Variable costs of revenue. From time to time in the ordinary course of business, we enter into agreements with vendors for the purchase of raw materials, laboratory supplies and consumables to be used in the sequencing of customer samples. However, we generally do not have binding and enforceable purchase orders beyond the short term, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project. We currently expect spending in this area to increase in 2025 in order to support the planned increase in clinical test volumes ahead of expected reimbursement.

Current wording

Variable costs of revenue. From time to time in the ordinary course of business, we enter into agreements with vendors for the purchase of raw materials, laboratory supplies and consumables to be used in the sequencing of customer samples. However, we generally do not have binding and enforceable purchase orders beyond the short term, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project. We currently expect spending in this area to increase in 2025 in order to support the planned increase in clinical test volumes ahead of expected Medicare reimbursement.

Previous wording

Capital expenditures. Capital expenditures are expected to increase from 2024 levels as we expect to expand NeXT Personal Dx capacity. Going forward, our capital expenditures are expected to consist primarily of laboratory equipment and computer equipment. We currently expect capital expenditures to be approximately $8.0 million in 2025 and between $7 million to $10 million in each of the years 2026 and 2027.

Current wording

Capital expenditures. Capital expenditures are expected to increase from 2024 levels as we expect to expand NeXT Personal Dx capacity. Going forward, our capital expenditures are expected to consist primarily of laboratory equipment and computer equipment. We currently expect capital expenditures to be approximately $7.0 million in 2025 and between $13.0 million to $14.0 million in each of the years 2026 and 2027.

Previous wording

Property leases. Our noncancelable operating lease payments were $68.4 million as of March 31, 2025. The timing of these future payments, by year, can be found in Note 7, Leases, in Part I, Item 1 of this Form 10-Q in the Consolidated Financial Statements.

Current wording

Property leases. Our noncancelable operating lease payments were $66.3 million as of June 30,2025. The timing of these future payments, by year, can be found in Note 7, Leases, in Part I, Item 1 of this Form 10-Q in the Consolidated Financial Statements.

Previous wording

Other. As of March 31, 2025, we have an outstanding noninterest bearing loan that was used to finance the purchase of lab equipment and software licenses. We owe a total of $3.9 million, of which the majority is payable in the next twelve months. Further discussion of the loan can be found in Note 6, Loans, in Part I, Item 1 of this Form 10-Q in the Consolidated Financial Statements.

Current wording

Other. As of June 30, 2025, we have an outstanding noninterest bearing loan that was used to finance the purchase of lab equipment and software licenses. We owe a total of $2.9 million, of which the majority is payable in the next twelve months. Further discussion of the loan can be found in Note 6, Loans, in Part I, Item 1 of this Form 10-Q in the Consolidated Financial Statements.