Natera, Inc.

Previous wording

We are a diagnostics company with proprietary molecular and bioinformatics technology that we are applying to change the management of disease worldwide. Our cell-free DNA, or 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, which 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 more targeted interventions that help lead to longer, healthier lives.

Current wording

We are a diagnostics company with proprietary molecular and bioinformatics technology that we are applying to change disease management worldwide. Our cell-free DNA, or 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.

Previous wording

We currently provide a comprehensive suite of products in women’s health, oncology, and organ health, and our Constellation cloud-based platform. We generate a majority of our revenues from the sale of Panorama, our non-invasive prenatal test, or NIPT, as well as Horizon, our Carrier Screening test. In addition to Panorama and Horizon, our product offerings in women’s health include Spectrum Preimplantation Genetics, our Anora miscarriage test, and Vistara single-gene NIPT, as well as our Empower hereditary cancer screening test, which we also offer through our oncology sales channel. We also offer our Signatera molecular residual disease test for oncology applications, which we commercialize as a test run in our CLIA (as defined below) laboratories and offer on a research use only basis to research laboratories and pharmaceutical companies; and our Prospera organ transplant assessment tests.

Current wording

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.

Previous wording

We process tests in our laboratories certified under the Clinical Laboratory Improvement Amendments of 1988 (or CLIA) in Austin, Texas and San Carlos, California. 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, 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.

Current wording

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.

Previous wording

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. We began entering into these licensing arrangements starting in the fourth quarter of 2015.

Current wording

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.

Previous wording

The principal focus of our commercial operations is to offer our tests through both our direct sales force and laboratory distribution partners, and our Constellation licensees under our cloud-based distribution model. 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, which includes tests distributed through our Constellation licensees. The number of tests that we process is a key metric as it tracks overall volume growth, particularly as our laboratory partners may transition from sending samples to our laboratory to our cloud-

Current wording

The principal focus of our commercial operations is to offer our tests through both our direct sales force and laboratory distribution partners, and our Constellation licensees under our cloud-based distribution model. 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, which includes tests distributed through our Constellation licensees. The number of tests that we process is a key metric as it tracks overall volume growth, particularly as our laboratory partners may transition from sending samples to our laboratory to our cloud-based distribution model, as a result of which our tests accessioned would decrease but our tests processed would remain unchanged.

Previous wording

During the year ended December 31, 2024, we processed approximately 3,064,600 tests, comprised of approximately 3,001,900 tests accessioned in our laboratories. During the year ended December 31, 2023, we processed approximately 2,496,100 tests, comprised of approximately 2,426,500 tests accessioned in our laboratories. During the year ended December 31, 2022, we processed approximately 2,066,500 tests, comprised of approximately 2,004,000 tests accessioned in our laboratories. 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.

Current wording

During the year ended December 31, 2025, we processed approximately 3,525,500 tests, comprised of approximately 3,468,700 tests accessioned in our laboratories. During the year ended December 31, 2024, we processed approximately 3,064,600 tests, comprised of approximately 3,001,900 tests accessioned in our laboratories. During the year ended December 31, 2023, we processed approximately 2,496,100 tests, comprised of approximately 2,426,500 tests accessioned in our laboratories. 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.

Previous wording

The percent of our revenues attributable to our U.S. direct sales force were 94%, 91% and 89% for the years ended December 31, 2024, 2023, and 2022, respectively. The percent of our revenues attributable to U.S. laboratory partners for the years ended December 31, 2024, 2023, and 2022, was 4%, 6% and 7%, respectively. 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 partners and other international sales was 2%, 3% and 4% for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

The percent of our revenues attributable to our U.S. direct sales force were 95%, 94% and 91% for the years ended December 31, 2025, 2024, and 2023, respectively. The percent of our revenues attributable to U.S. laboratory partners for the years ended December 31, 2025, 2024, and 2023, was 3%, 4% and 6%, respectively. 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 partners and other international sales was 2%, 2% and 3% for the years ended December 31, 2025, 2024 and 2023, respectively.

Previous wording

For the year ended December 31, 2024, total revenues were $1,696.9 million, compared to $1,082.6 million and $820.2 million in the years ended December 31, 2023 and 2022, respectively. Product revenues generated from our testing accounted for $1,685.1 million or 99% of total revenues for the year ended December 31, 2024, compared to $1,068.5 million or 99% of total revenues for the year ended December 31, 2023 and $797.3 million or 97% of total revenues for the year ended December 31, 2022. For the years ended December 31, 2024, 2023, and 2022, there were no customers exceeding 10% of the total revenues on an individual basis. Revenues from customers outside the United States were $39.2 million, representing 2% of total revenues for the year ended December 31, 2024. For the year ended December 31, 2023, revenues from customers outside the United States were $34.9 million, representing approximately 3% of total revenues. For the year ended December 31, 2022, revenues from customers outside the United States were $34.4 million, representing approximately 4% 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.

Current wording

For the year ended December 31, 2025, total revenues were $2,306.1 million, compared to $1,696.9 million and $1,082.6 million in the years ended December 31, 2024 and 2023, respectively. Product revenues generated from our testing accounted for $2,295.8 million or nearly 100% of total revenues for the year ended December 31, 2025, compared to $1,685.1 million or 99% of total revenues for the year ended December 31, 2024 and $1,068.5 million or 99% of total revenues for the year ended December 31, 2023. For the years ended December 31, 2025, 2024, and 2023, there were no customers exceeding 10% of the total revenues on an individual basis. Revenues from customers outside the United States were $41.8 million, representing 2% of total revenues for the year ended December 31, 2025. For the year ended December 31, 2024, revenues from customers outside the United States were $39.2 million, representing approximately 2% of total revenues. For the year ended December 31, 2023, revenues from customers outside the United States were $34.9 million, representing approximately 3% 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.

Previous wording

Our net losses for the years ended December 31, 2024, 2023, and 2022, were $190.4 million, $434.8 million, and $547.8 million, respectively. This included non-cash stock compensation expense of $274.4 million, $191.8 million, and $152.4 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $2.6 billion.

Current wording

Our net losses for the years ended December 31, 2025, 2024, and 2023, were $208.2 million, $190.4 million, and $434.8 million, respectively. This included non-cash stock compensation expense of $354.4 million, $274.4 million, and $191.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, we had an accumulated deficit of $2.8 billion.

Previous wording

Our ability to increase our revenues will depend on our ability to further penetrate the domestic and international markets and, in particular, generate sales through our direct sales force, develop and commercialize additional tests, obtain reimbursement from additional third-party payers and increase our reimbursement rates for tests performed. For example, our financial performance depends on reimbursement for microdeletions testing. Many third-party payers do not currently reimburse for microdeletions screening in part because there has historically been limited published data on the performance of microdeletions screening tests, with our SMART study results being published relatively recently, in early 2022.

Current wording

Our ability to increase our revenues will depend on our ability to further penetrate the domestic and international markets and, in particular, generate sales through our direct sales force, develop and commercialize additional tests, obtain reimbursement from additional third-party payers and increase our reimbursement rates for tests performed. For example, our financial performance depends on reimbursement for microdeletions testing. Many third-party payers do not currently reimburse for microdeletions screening in part because there has historically been limited published data on the performance of microdeletions screening tests, with our single nucleotide polymorphism-based Microdeletion and Aneuploidy RegisTry, or SMART study results only being published in early 2022.

Previous wording

Revenues recognized from tests processed through our Constellation model, and from our strategic partnership agreements (which during the three years ended December 31, 2024, 2023 and 2022 comprised BGI Genomics Co. Ltd., and Foundation Medicine, Inc. 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. As of December 31, 2024, we are recognizing revenues on 7 licensing and service arrangements with laboratories under our Constellation model.

Current wording

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.

Previous wording

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. However, cost of licensing and other revenues for the Constellation software platform are relatively low, and therefore, its associated gross margin is higher.

Current wording

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.

Previous wording

The components of our cost of product revenues are material and service costs, equipment and related depreciation expense, personnel costs, including stock-based compensation expense, 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, equipment depreciation and utilities. Costs associated with Whole Exome Sequencing, or WES, are also included, as well as labor costs, relating to our Signatera CLIAand Signatera research use only offerings. Costs associated with performing tests are recorded when the test is accessioned. Costs associated with collection kits are recorded upon shipment to the clinics. We expect cost of product revenues in absolute dollars to increase as the number of tests we perform increases.

Current wording

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.

Previous wording

We currently have 7 revenue generating licensing and service agreements with laboratories under our Constellation distribution model. 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.

Current wording

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.

Previous wording

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 product revenues recognition and stock-based compensation attributable to restricted stock units and stock options with performance metrics.

Current wording

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.

Previous wording

Stock-based compensation expense for restricted stock units and stock options with performance metrics is calculated based upon probability of achievement of the metrics specified in the grant. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. No compensation cost is recognized on stock options for employees and non-employees who do not render the requisite service and therefore forfeit their rights to the stock options. The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in our statements of operations and comprehensive loss during the period that the related services are rendered.

Current wording

Stock-based compensation expense for restricted stock units and stock options with performance metrics is calculated based upon probability of achievement of the metrics specified in the grant. Stock-based compensation expense for performance-based awards is recognized when it becomes probable that the performance conditions will be met. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. The measurement of stock-based compensation is subject to potential adjustment based on the underlying equity instruments that ultimately vest, with the resulting change in value, if any, recognized in our statements of operations and comprehensive loss during the period that the related services are rendered.

Previous wording

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 year ended December 31, 2024 increased by $614.3 million, or 56.7%, when compared to the year ended December 31, 2023.

Current wording

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 year ended December 31, 2025 increased by $609.2 million, or 35.9%, when compared to the year ended December 31, 2024.

Previous wording

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 our overall volume growth. During the year ended December 31, 2024, total reported units were approximately 2,926,400, comprised of approximately 2,867,400 tests reported in our laboratories. Comparatively, during the year ended December 31, 2023, total reported units were approximately 2,388,200, comprised of approximately 2,323,400 tests reported in our laboratories. During the year ended December 31, 2024 and 2023, total oncology units processed were approximately 528,200 and 341,000 respectively.

Current wording

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 our overall volume growth. During the year ended December 31, 2025, total reported units were approximately 3,342,500, comprised of approximately 3,288,600 tests reported in our laboratories. Comparatively, during the year ended December 31, 2024, total reported units were approximately 2,926,400, comprised of approximately 2,867,400 tests reported in our laboratories. During the year ended December 31, 2025 and 2024, total oncology units processed were approximately 800,800 and 528,200, respectively.

Previous wording

During the year ended December 31, 2024, product revenues increased by $616.6 million, or 57.7% compared to the year ended December 31, 2023, as a result of the continued revenue growth from increased test volumes as well as average selling price improvements.

Current wording

During the year ended December 31, 2025, product revenues increased by $610.7 million, or 36.2%, compared to the year ended December 31, 2024, as a result of the continued revenue growth from increased test volumes as well as average selling price improvements.

Previous wording

Licensing and other revenues decreased by $2.2 million, or 15.7%, during the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to a decrease in revenue from our collaborative agreements.

Current wording

Licensing and other revenues decreased by $1.5 million, or 13.0%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to the termination of certain collaborative agreements.

Previous wording

During the year ended December 31, 2024, cost of product revenues increased by $83.7 million or 14.2% when compared to the year ended December 31, 2023, primarily due to higher costs related to inventory consumption of $28.1 million driven by an increase in accessioned cases, a $32.0 million increase in third-party fees, a $23.6 million increase in shipping, equipment and related depreciation expense, labor, overhead, and other related costs driven by headcount growth and product support.

Current wording

During the year ended December 31, 2025, cost of product revenues increased by $138.3 million or 20.6% when compared to the year ended December 31, 2024, primarily due to higher costs related to inventory consumption of $57.2 million driven by an increase in accessioned cases, a $23.7 million increase in third-party fees, a $57.4 million increase in shipping, equipment and related depreciation expense, labor, overhead, and other related costs driven by headcount growth and product support.

Previous wording

Cost of licensing and other revenues for the year ended December 31, 2024, when compared to the year ended December 31, 2023, increased by approximately $0.2 million, or 14.4%, primarily due to a net increase in costs to support our collaborative agreements.

Current wording

Cost of licensing and other revenues for the year ended December 31, 2025, when compared to the year ended December 31, 2024, increased by approximately $0.9 million, or 59.1%, primarily due to a net increase in costs to support our collaborative agreements.

Previous wording

Research and development expenses during the year ended December 31, 2024 increased by $83.5 million, or 26.0%, when compared to the year ended December 31, 2023. The increase was driven by a $48.3 million increase in salary and related expenditures, which includes a $24.2 million increase in stock-based compensation expense, a $25.7 million increase in lab and clinical trial related expenses, a $6.7 million increase in consulting expenses, and a $2.8 million net increase in office, facilities, and other expenses.

Current wording

Research and development expenses during the year ended December 31, 2025 increased by $220.0 million, or 54.4%, when compared to the year ended December 31, 2024. The increase was attributable to an increase of $127.3 million in salary and related compensation expenditures (including a $32.0 million increase in stock-based compensation expense), a $19.4 million increase in consulting expenses, a $21.6 million increase in office related expenses, a $40.9 million increase in lab related and clinical trial expenses, a $6.5 million net increase in facilities related expenses and a $4.3 million increase in travel and other expenses.

Previous wording

Selling, general and administrative expenses increased by $223.0 million, or 36.1%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was attributable to a $124.4 million increase in salary and related expenditures, which includes a $55.5 million increase in stock-based compensation expense, a $57.2 million increase in consulting and legal expenses, a $8.9 million increase in marketing costs, a $7.4 million increase in travel expenses, a $7.4 million increase in office related expenses, a $16.5 million increase in vendor expenses, and a $1.2 million net increase in facilities and other costs.

Current wording

Selling, general and administrative expenses increased by $335.9 million, or 39.9%, in the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was attributable to an increase of $212.6 million in salary and related compensation expenditures (including a $41.1 million increase in stock-based compensation expense), a $25.2 million increase in consulting expenses, a $28.5 million increase in marketing expenses, a $8.7 million increase in travel related costs, a $14.5 million increase in office costs, a $9.4 million increase in vendor expenses, a $30.6 million increase in legal related expenses, and a $6.4 million increase in facilities and other costs.

Previous wording

Interest expense decreased by $2.0 million, 15.5%, in the year ended December 31, 2024 compared to the same period in the prior year primarily as a result of the slight decrease in interest rate and the redemption of the Convertible Notes in October 2024.

Current wording

Interest expense decreased by $6.6 million, 61.9%, in the year ended December 31, 2025 compared to the same period in the prior year due to the redemption of the Convertible Notes in October 2024.

Previous wording

Interest and other income increased by $18.9 million, or 77.6%, in the year ended December 31, 2024, compared to the same period in the prior year, primarily due to greater average cash and investment balances driving higher interest income.

Current wording

Interest and other income increased by $2.6 million, or 6.1%, in the year ended December 31, 2025, compared to the same period in the prior year, primarily due to unrealized gains on warrant valuations.

Previous wording

We have incurred net losses each year since our inception. For the year ended December 31, 2024, we had a net loss of $190.4 million, and we expect to continue to incur 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 December 31, 2024, we had an accumulated deficit of $2.6 billion. As of December 31, 2024, we had $945.6 million in cash and cash equivalents and restricted cash, $22.7 million in marketable securities, and $80.4 million of outstanding balance on the Credit Line including accrued interest. As of December 31, 2024, we have $20.0 million remaining and available on the Credit Line.

Current wording

We have incurred net losses each year since our inception. For the year ended December 31, 2025, we had a net loss of $208.2 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 December 31, 2025, we had an accumulated deficit of $2.8 billion. As of December 31, 2025, 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 December 31, 2025, we have $20.0 million remaining and available on the Credit Line.

Previous wording

In September 2023, we completed an underwritten equity offering and sold 4,550,000 shares of our common stock at a price of $55 per share to the public. Before offering expenses of approximately $0.4 million, we received proceeds of approximately $235.8 million net of the underwriting discount. In November 2022, we completed an underwritten equity offering and sold 13,144,500 shares of our common stock at a price of $35 per share to the public. Before offering expenses of approximately $0.5 million, we received proceeds of approximately $433.2 million net of the underwriting discount. Additionally, our contractual obligations and other commitments are satisfied by the equity financing described above, our convertible note financing conducted in April 2020 described below, the Credit Facility described below, and our product, licensing, and other sales. For our commitments, refer to the “Contractual Obligations and Other Commitments” section below.

Current wording

In September 2023, we completed an underwritten equity offering and sold 4,550,000 shares of our common stock at a price of $55 per share to the public. Before offering expenses of approximately $0.4 million, we received proceeds of approximately $235.8 million net of the underwriting discount. Additionally, our contractual obligations and other commitments are satisfied by the equity financing described above, our convertible note financing conducted in April 2020 described below, the Credit Facility described below, and our product, licensing, and other sales. For our commitments, refer to the “Contractual Obligations and Other Commitments” section below.

Previous wording

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 was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%, and it 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 was subsequently changed to the 30-day Secured Overnight Financing Rate, or SOFR, average, plus 1.21%. The SOFR rate is variable. The Credit Line was subsequently increased from $50.0 million to $150.0 million. In June 2023, the Credit Line decreased to $100.0 million. In October 2023, the interest rate for the Credit Line was subsequently changed to the 30-day SOFR average, plus 0.5%. As of December 31, 2024, the total principal amount outstanding with accrued interest was $80.4 million and $20.0 million is remaining and available under the Credit Line.

Current wording

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 was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%, and it 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 was subsequently changed to the 30-day Secured Overnight Financing Rate, or SOFR, average, plus 1.21%. The SOFR rate is variable. The Credit Line was subsequently increased from $50.0 million to $150.0 million. In June 2023, the Credit Line decreased to $100.0 million. In October 2023, the interest rate for the Credit Line was subsequently changed to the 30-day SOFR average, plus 0.5%. As of December 31, 2025, the total principal amount outstanding with accrued interest was $80.3 million and $20.0 million is remaining and available under the Credit Line.

Previous wording

The Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 2.25% per year, payable in cash semi-annually in arrears in May and November of each year, beginning in November 2020. The Convertible Notes mature in May 2027, unless earlier converted, repurchased or redeemed in accordance with their terms. Upon conversion, the Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. On July 19, 2024, we elected to exercise our optional redemption right to redeem all $287.5 million aggregate principal amount of our outstanding 2.25% Convertible Notes due 2027 and instructed Wilmington Trust, National Association, as trustee under the Indenture Agreement governing the Convertible Notes, to issue a redemption notice to registered holders of the Convertible Notes. The Redemption Date fixed for the redemption of the Convertible Notes was October 11, 2024. The redemption price for the Convertible Notes was equal to 100% of the principal amount of the Convertible Notes redeemed plus accrued and unpaid interest to, but excluding, the Redemption Date. We elected physical settlement with shares of our common stock as the settlement method to apply to all conversions of the Convertible Notes. On the Redemption Date, $287.4 million of Convertible Notes were converted for approximately 7.5 million shares of our common stock under the terms of the redemption notice. The remaining Convertible Notes not converted under the redemption notice were redeemed in exchange for cash at face value plus any accrued interest totaling $0.1 million.

Current wording

The Convertible Notes were senior, unsecured obligations of the Company and bore interest at a rate of 2.25% per year, payable in cash semi-annually in arrears in May and November of each year, beginning in November 2020. Upon conversion, the Convertible Notes were convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. On July 19, 2024, we elected to exercise our optional redemption right to redeem all $287.5 million aggregate principal amount of our outstanding 2.25% Convertible Notes due 2027 and instructed Wilmington Trust, National Association, as trustee under the Indenture Agreement governing the Convertible Notes, to issue a redemption notice to registered holders of the Convertible Notes. The Redemption Date fixed for the redemption of the Convertible Notes was October 11, 2024. The redemption price for the Convertible Notes was equal to 100% of the principal amount of the Convertible Notes redeemed plus accrued and unpaid interest to, but excluding, the Redemption Date. We elected physical settlement with shares of our common stock as the settlement method to apply to all conversions of the Convertible Notes. On the Redemption Date, $287.4 million of Convertible Notes were converted for approximately 7.5 million shares of our common stock under the terms of the redemption notice. The remaining Convertible Notes not converted under the redemption notice were redeemed in exchange for cash at face value plus any accrued interest totaling $0.1 million.

Previous wording

Cash used in operating activities during the year ended December 31, 2023 was $247.0 million. The net loss of $434.8 million includes $235.8 million in non-cash charges resulting from $24.1 million of depreciation and amortization, $2.7 million milestone expense for in-process research and development, $14.5 million of non-cash lease expense, $191.8 million of stock-based compensation expense, $1.1 million premium amortization and discount accretion on investment securities, $0.3 million in foreign exchange adjustment, and $1.3 million for amortization of debt discount. Operating assets had cash outflows of $57.0 million resulting from $33.9 million in increases in accounts receivable, $5.4 million in increases in inventory, and $26.1 million in increases in prepaid expenses and other current assets, offset by $8.4 million from cash inflows in operating lease right-of-use assets. Operating liabilities resulted in cash inflows of $9.0 million resulting from a $21.6 million increase in accrued compensation, a $10.3 million increase in other accrued liabilities, and a $5.0 million increase in deferred revenue, offset by a $15.5 million decrease in accounts payable and a $12.4 million decrease in operating lease liabilities.

Current wording

Cash provided by operating activities during the year ended December 31, 2025 was $215.3 million. The net loss of $208.2 million includes $413.5 million in non-cash charges resulting from $41.8 million of depreciation and amortization, $1.7 million of amortization of acquired intangibles, $354.4 million of stock-based compensation expense, $20.2 million of non-cash lease expense, offset by a $3.2 million change in fair value of warrants and preferred stock and a $1.4 million decrease in non-cash expense recovery. Operating assets had cash outflows of $4.6 million resulting from a $20.9 million increase in inventory and a $8.6 million increase in prepaid expenses and other assets, offset by a $20.7 million decrease in accounts receivable and a $4.2 million decrease in operating lease right-of-use assets. Operating liabilities had cash inflows of $14.6 million resulting from a $60.3 million increase in accrued compensation, a $0.8 million increase in accounts payable, a $31.3 million increase in other accrued liabilities, and a $2.8 million increase in deferred revenue, offset by a $60.8 million decrease in deferred tax liability and a $19.8 million decrease in lease liabilities.

Previous wording

Cash provided by financing activities for the year ended December 31, 2023 totaled $254.4 million comprised of $235.4 million net proceeds from our equity offering completed in the third quarter of 2023, $15.1 million in issuance of common stock under our employee stock purchase plan, and $3.9 million cash proceeds from the exercise of stock options.

Current wording

Cash provided by financing activities for the year ended December 31, 2025 totaled $47.5 million comprised of $22.5 million from proceeds from the exercise of stock options and $25.0 million from the issuance of common stock under our employee stock purchase plan, offset by $0.1 million related to stock issuance costs.

Previous wording

The short-term debt obligations consist of the $80.4 million principal amount drawn from the UBS Credit Line, or the Credit Line, and applicable interest. The Credit Line was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%, and it 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 short-term investments in the consolidated balance sheets. The interest rate was subsequently changed to the 30-day SOFR average, plus 1.21%. 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. In October 2023, the interest rate was subsequently changed to the 30-day SOFR average, plus 0.5%. Please refer to Note 10,Debt, for further details.

Current wording

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 was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%, and it 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 short-term investments in the consolidated balance sheets. The interest rate was subsequently changed to the 30-day SOFR average, plus 1.21%. 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. In October 2023, the interest rate was subsequently changed to the 30-day SOFR average, plus 0.5%. Please refer to Note 12,Debt, for further details.

Previous wording

Our future minimum lease payments consist of $140.6 million, as described in Note 7,Leases, which excludes $0.7 million of lease commitments related to payments for leases executed but not yet commenced to be paid over the respective terms of such leases. The leases have not commenced under Accounting Standards Codification, or ASC, Topic 842, Leases (ASC 842), as of December 31, 2024. As a result, these leases are not reflected within the consolidated balance sheets.

Current wording

Our future minimum lease payments consist of $169.5 million, as described in Note 9,Leases, which excludes $1.5 million of lease commitments related to payments for leases executed but not yet commenced to be paid over the respective terms of such leases. The leases have not commenced under Accounting Standards Codification, or ASC, Topic 842, Leases (ASC 842), as of December 31, 2025. As a result, these leases are not reflected within the consolidated balance sheets.