Fulgent Genetics, Inc.

Note 1. Overview and Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. These financial statements include the assets, liabilities, revenues and expenses of all subsidiaries and entities in which the Company has a controlling financial interest or is deemed to be the primary beneficiary. In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach that determines whether it has both (i) the power to direct the economically significant activities of the entity and (ii) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. The Company uses the equity method to account for its investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. All intercompany accounts and transactions are eliminated from the accompanying condensed consolidated financial statements.

Nature of the Business

Fulgent Genetics, Inc., together with its subsidiaries and affiliated professional corporations, or PCs (collectively referred to as the Company, unless otherwise noted or the context requires otherwise), is a technology-based company with a well-established laboratory services business and a therapeutic development business. Its laboratory services business includes technical laboratory services and testing services and professional interpretation of laboratory results by licensed physicians. Its therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The Company aims to transform from a genomic diagnostic business into a fully integrated precision medicine company.

Unaudited Interim Financial Information

The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2024, which are included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 28, 2025, or the 2024 Annual Report, and, in the opinion of management, include all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the Company’s financial position and results of operations. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or any other period. The accompanying Condensed Consolidated Balance Sheet as of December 31, 2024, has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements included in the 2024 Annual Report, including the notes thereto.

Note 2. Summary of Significant Accounting Policies

See Note 2. Summary of Significant Accounting Policies, to the Company’s Consolidated Financial Statements included in the 2024 Annual Report.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. These estimates, judgments and assumptions are based on historical data and experience available at the date of the accompanying condensed consolidated financial statements, as well as various other factors management believes to be reasonable under the circumstances. The Company’s estimates and assumptions may evolve as conditions change. Actual results could differ significantly from these estimates.

On an ongoing basis, management evaluates its estimates, primarily those related to: (i) revenue recognition criteria, (ii) accounts receivable and allowances for credit losses, (iii) the useful lives of fixed assets and intangible assets, (iv) estimates of tax liabilities, (v) valuation of goodwill and indefinite-lived intangible assets at time of acquisition and on a recurring basis, and (vi) valuation of investments.

Trade Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains an allowance for credit losses for expected uncollectible trade accounts receivable, which is recorded as an offset to trade accounts receivable, and changes in allowance for credit losses are classified as a general and administrative expense in the accompanying Condensed Consolidated Statements of Operations. The Company assesses collectability by reviewing trade accounts receivable on a collective basis where similar risk characteristics exist and on an individual basis when it identifies specific customers that have deterioration in credit quality such that they may no longer share similar risk characteristics with the other receivables. In determining the amount of the allowance for credit losses, the Company uses a loss rate model or probability-of-default and loss-given default model. Following the loss rate method, expected credit losses are determined based on an estimated historical loss rate. The probability of default method allows the ability to define a point of default and measure credit losses for receivables that have reached the point of default for purposes of calculating the allowance for credit losses. Loss-given default represents the likelihood that a receivable that has reached the point of default will not be collected in full. The Company updates its loss rate and factors quarterly to incorporate the most recent historical data and adjusts the quantitative portion of the reserve through its qualitative reserve overlay. The Company looks at qualitative factors such as general economic conditions in determining expected credit losses.

Aroll-forward of the activity in the Company’s allowance for credit losses for the nine months ended September 30, 2025, dollars in thousands, is as follows:

Business Combinations

The Company uses the acquisition method of accounting and allocates the fair value of purchase consideration to the assets acquired and liabilities assumed from an acquiree based on their respective fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair value of these assets acquired and liabilities assumed is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows, which includes consideration of future growth and margins, future changes in technology, expected cost and time to develop in-process research and development, brand awareness and discount rates. Fair value estimates are based on the assumptions that management believes a market participant would use in pricing the asset or liability.

Finite-Lived Intangible Assets

Intangible assets, unless determined to be indefinite-lived, are amortized over their estimated useful lives. The Company amortizes intangible assets with definite lives on a straight-line basis generally over periods ranging from 3 to 18 years. See Note 14. Goodwill and Intangible Assets, for details of intangible assets.

Goodwill and Indefinite-Lived Intangibles

In-process research & development, or IPR&D, costs are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time.

The Company assesses goodwill and indefinite-lived intangibles for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company may choose to bypass a qualitative assessment of impairment for any reporting unit and proceed directly to performing a quantitative assessment. An impairment loss would be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value.

The Company’s quantitative assessment includes estimating the fair value of each reporting unit and comparing it to its carrying value. The Company estimates the fair value of reporting units using both income-based and market-based valuation methods and typically engages a third-party appraisal firm to assist with the valuation. The estimated fair value for each reporting unit is determined based upon the range of estimated values developed from the income and market-based methods. If the estimated fair value of a reporting unit exceeds its carrying value, the goodwill is not impaired, and no further review is required.

The income-based fair value methodology is based on a reporting unit’s forecasted future cash flows that are discounted to the present value using the reporting unit’s weighted-average cost of capital. The income-based approach requires management’s assumptions and judgments regarding economic conditions in the markets in which the company operates and conditions in the capital markets, many of which are outside of management’s control. The market-based fair value methodology looks at the guideline public company valuation method to determine the prices of comparable public companies and looks at merger and acquisition methods, similar businesses that were sold recently, to estimate the value of the reporting units. Under the market-based approach, judgment is required in evaluating market multiples and recent transactions.

Impairment of Long-Lived Assets

The Company evaluates the carrying amount of its long-lived assets whenever events or changes in circumstances indicate that the assets may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of an asset and its eventual disposition are less than the carrying amount of the asset.

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, trade accounts receivable, restricted cash, preferred stock investments, accounts payable, and accrued liabilities. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due to their short maturities. Fair value of marketable securities and the preferred stock investments is disclosed in Note 4. Fair Value Measurements, to the accompanying condensed consolidated financial statements.

Concentrations of Credit Risk, Customers, and Suppliers

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, trade accounts receivable, and marketable securities. As of September 30, 2025, substantially all of the Company’s cash and cash equivalents were deposited in accounts at financial institutions, and amounts typically exceed federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial strength of the depository institutions in which its cash and cash equivalents are held.

In certain periods, a small number of customers have accounted for a significant portion of the Company’s revenue. For the laboratory services segment, aggregating customers under common control, one customer comprised$19.2 million, or 23%, of total revenue in the three months ended September 30, 2025, and$54.4 million, or 23%, of the Company’s revenue in the nine months ended September 30, 2025. The same customer comprised$16.2 million, or 23%, of total revenue in the three months ended September 30, 2024, and$45.7 million, or 22%, of the Company’s revenue in the nine months ended September 30, 2024. The same customer comprised 14% of total accounts receivable, net, as of September 30, 2025, and 15% of total accounts receivable, net, as of December 31, 2024. For the therapeutic development segment, the Company does not have customers or revenue as it does not have any commercialized or approved drug candidates.

The Company’s therapeutic development business relies on ANP Technologies, Inc., or ANP, for certain laboratory services, equipment, tools, and drug intermediates in connection with research and development efforts. In July 2025, the Company completed an acquisition of 100% of the outstanding equity of ANP. See more details in Note 15. Business Combinations. The Company also relies on a limited number of suppliers for certain laboratory substances used in the chemical reactions incorporated into its processes, referred to as reagents, as well as for the sequencers and various other equipment and materials it uses in its laboratory operations. In particular, the Company relies on a sole supplier for the next generation sequencers and associated reagents it uses to perform its genetic tests and as the sole provider of maintenance and repair services for these sequencers. The Company’s laboratory operations would be interrupted if it encountered delays or difficulties securing these reagents, sequencers, other equipment or materials or maintenance and repair services, which could occur for a variety of reasons, including if the Company needs a replacement or temporary substitute for any of its limited or sole suppliers and is not able to locate and make arrangements with an acceptable replacement or temporary substitute. The Company’s development efforts could also be delayed or interrupted if it is unable to procure items needed for its therapeutic development activities. The Company believes there are currently only a few other manufacturers that are capable of supplying and servicing some of the equipment and other materials necessary for its laboratory operations, including sequencers and various associated reagents.

Reportable Segment and Geographic Information

Reportable segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by the Chief Operating Decision Maker, or CODM, in making decisions regarding resource allocation and assessing performance. The Company’s CODM is its Chief Executive Officer. The Company reports its business intwo segments, a laboratory services business and a therapeutic development business. For further financial information about these segments, including information for each of the periods presented regarding revenue, operating income (loss), and other important information, see Note 7. Reportable Segment and Geographic Information, to the accompanying condensed consolidated financial statements.

Foreign Currency Translation and Foreign Currency Transactions

The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Expenses for these subsidiaries are translated using rates that approximate those in effect during the period. These unrealized gains and losses are recognized in accumulated other comprehensive income in the equity section of the accompanying Condensed Consolidated Balance Sheets, and do not impact net income.

The Company and its subsidiaries that use the U.S. dollar as their functional currency remeasure monetary assets and liabilities at exchange rates in effect at the end of each period. The carrying value of these will change with exchange rate fluctuations resulting in a foreign currency transaction gain or loss which is recognized in other income, net in the Condensed Consolidated Statements of Operations. Reagents and supplies, property, and other nonmonetary assets and liabilities are remeasured when the transaction is initially recognized using the historical rate that was in effect when the asset was acquired or liability was incurred. The carrying amounts do not change as a result of exchange rate fluctuations and no foreign currency transaction gain or loss is recognized. Gains and losses from foreign currency exchange were not significant for the three and nine months ended September 30, 2025, and 2024.

Income Taxes

The effective tax rate used for interim periods is the estimated annual effective consolidated tax rate, based on the current estimate of full year results, except that taxes related to specific events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon several significant estimates and judgments, including the estimated annual pre-tax income (loss) of the Company in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, the Company’s tax expense can be impacted by changes in tax rates or laws and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income or loss. Other comprehensive income or loss consists of net unrealized gain or loss on available-for-sale debt securities, net of tax, and foreign currency translation adjustments from the Company’s subsidiaries not using the U.S. dollar as their functional currency. There was no reclassification from other comprehensive income or loss to net loss in thethree and nine months ended September 30, 2025. Reclassifications from other comprehensive loss to net loss were$2.7 million and$3.5 million in the three and nine months ended September 30, 2024, respectively. The tax effect related to net unrealized gain or loss on the available-for-sale debt securities waszero in each of the three and nine months ended September 30, 2025, and 2024, due to the valuation allowance that precludes the Company from recognizing the deferred tax benefit.

Disaggregation of Revenue

The Company classifies its customers into three payor types: (i) Institutional, including hospitals, medical institutions, other laboratories, governmental bodies, and large corporations, (ii) Insurance, or (iii) Patients who pay directly, as the Company believes this best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. The following table summarizes revenue from contracts with customers by payor type for thethree and nine months ended September 30, 2025, and 2024:

During the three and nine months ended September 30, 2024, the Company experienced a change in estimate related to variable consideration, leading to the recognition ofzero and$1.8 million variable consideration, respectively, that related to COVID-19 test services completed in the prior periods due to collection efforts. This was included as revenue from insurance in the table above. There waszero such variable consideration recognized in each of thethree and nine months ended September 30, 2025. The Company estimates variable consideration using the expected value method. Any changes in variable consideration estimates that affect transactions are accounted for on a cumulative catch-up basis.

Contract Balances

Receivables from contracts with customers -Receivables from contracts with customers are included within trade accounts receivable on the Condensed Consolidated Balance Sheets. Receivables from Insurance and Institutional customers represented 52% and 48%, respectively, as of September 30, 2025, and 44% and 56%, respectively, as of December 31, 2024.

Contract assets and liabilities - Contract assets from contracts with customers associated with contract execution and certain costs to fulfill a contract are included in other current assets in the accompanying Condensed Consolidated Balance Sheets. Contract liabilities are recorded when the Company receives payment prior to completing its obligation to transfer goods or services to a customer. Contract liabilities are included in the Condensed Consolidated Balance Sheets. Revenues of$0.2 million and$0.4 million were recognized for the three and nine months ended September 30, 2025, respectively, and$0.8 million and$1.6 million were recognized for the three and nine months ended September 30, 2024, respectively, related to contract liabilities at the beginning of the respective periods.

Prior Period Reclassifications

Certain amounts reported in the prior period have been reclassified to conform with the current period presentation. In Note 6. Other Significant Balance Sheet Accounts, the Company has combined accrued legal liabilities with other accrued liabilities.

Recent Accounting Pronouncements

The Company evaluates all Accounting Standards Updates, or ASUs, issued by the Financial Accounting Standards Board, or FASB, for consideration of their applicability. ASUs not included in the Company’s disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. This update requires more detailed information on certain income tax disclosures including the income tax rate reconciliation and income taxes paid. Amendments in this update are effective for annual periods beginning December 15, 2024, for public entities, and early adoption is permitted. This update is intended to result in enhanced income tax disclosures, and the Company does not expect any impact to income tax expense.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Amendments in this update are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impacts of this amendment on its consolidated financial statements and related disclosure.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update provides all entities with a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Amendments in this update are effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this amendment on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update simplifies the capitalization guidance by removing all references to software development project stages, so that the guidance is neutral to different software development methods. Amendments in this update are effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impacts of this amendment on its financial statements and related disclosures.

The Company does not expect that any other recently issued accounting guidance will have a significant effect on its condensed consolidated financial statements.

Note 3. Equity and Debt Securities

The Company’s investment in equity and debt securities consisted of the following:

Gross unrealized losses on the Company’s equity and debt securities were$0.4 million and$4.1 million as of September 30, 2025, and December 31, 2024, respectively.

There wasno sale of available-for-sale securities for each of thethree and nine months ended September 30, 2025. Proceeds from sale of available-for-sale securities were$25.9 million and$101.5 million for the three and nine months ended September 30, 2024, respectively. Gross realized losses on the Company’s available-for-sale securities were$0.1 million and$1.0 million for the three and nine months ended September 30, 2024, respectively, and the gross realized income was insignificant for each of the three and nine months ended September 30, 2024. The cost of any marketable securities sold is based on the specific-identification method.

The Company did not recognize any credit losses for its marketable available-for-sale debt securities during the three and nine months ended September 30, 2025, and 2024.

Note 4. Fair Value Measurements

The authoritative guidance on fair value measurements establishes a framework with respect to measuring assets and liabilities at fair value on a recurring basis and non-recurring basis. Under the framework, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The framework also establishes a three-tier hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability and are developed based on the best information available in the circumstances. The hierarchy consists of the following three levels:

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis, based on the above three-tier fair value hierarchy:

The Company’s Level 1 assets include U.S. treasury bills and money market instruments and are valued based upon observable market prices. Level 2 assets consist of U.S. government and U.S. agency debt securities, municipal bonds, corporate debt securities and Yankee debt securities. Level 2 securities are valued based upon observable inputs that include reported trades, broker/dealer quotes, bids and offers.

As of September 30, 2025, and December 31, 2024, the Company held preferred stock of two privately-held companies, which were included in other long-term assets in the accompanying Condensed Consolidated Balance Sheets, that were measured using unobservable (Level 3) inputs. For the value of the investment in private equity securities, the Company elected to measure them at cost minus impairment, as the preferred stock of the privately-held companies did not have a readily determinable fair value.

During the nine months ended September 30, 2025, the Company performed a qualitative assessment to determine if any of its equity investments measured at cost minus impairment were impaired. Indicators considered included significant declines in the investee’s operating performance, adverse changes in industry conditions, and deterioration in the investee’s financial condition. As part of this review, the Company identified that Helio Genomics, Inc., or Helio Genomics, an investee in which the Company holds a non-marketable equity investment, exhibited several adverse conditions, including a deterioration in financial condition and the inability to secure sufficient financing to support future operations. Given these developments and their impact on Helio Genomics’ ability to continue funding its operations, management concluded that the Company’s investment in Helio Genomics was impaired. To estimate the fair value of the investment, the Company employed a discounted cash flow analysis, using assumptions including projected revenues and expenses, discount rates, and a terminal value multiple. The resulting estimated fair value was deemed insignificant.

The carrying amount of the investment was $9.9 million. Accordingly, the Company recognized an impairment loss of $9.9 million. The impairment is reflected in “Other Expenses” within the Condensed Consolidated Statement of Operations for the nine months ended September 30, 2025. The carrying amount of the investment in Helio Genomics on the Condensed Consolidated Balance Sheet was reduced to its fair value of an insignificant amount, which now represents its new cost basis. In accordance with Accounting Standards Codification, or ASC, 321, “Investments - Equity Securities” no subsequent increases in the fair value will be recognized in net income for this investment.

The Company continues to monitor its investments for changes in facts and circumstances that may indicate further impairments or observable price changes in orderly transactions.

There was no impairment loss recorded as of September 30, 2025 for the other preferred stock investment.

There wereno transfers between fair value measurement levels during thethree and nine months ended September 30, 2025, and 2024.

Note 5. Fixed Assets

Major classes of fixed assets consisted of the following:

Depreciation expenses on fixed assets totaled$3.9 million and$11.7 million for the three and nine months ended September 30, 2025, respectively, and$3.8 million and$12.4 million for the three and nine months ended September 30, 2024, respectively.

Note 6. Other Significant Balance Sheet Accounts

Other current assets consisted of the following:

Accrued liabilities consisted of the following:

Other accrued liabilities as of September 30, 2025, included $1.6 million for income tax payable, related to the acquisition of ANP, as further described in Note 15. Business Combinations. Other accrued liabilities also included legal accruals, short-term finance lease liabilities, health insurance liabilities, and third-party billing services.

Other long-term liabilities consisted of the following:

Note 7. Reportable Segment and Geographic Information

The Company hastwo distinct reportable segments. The laboratory services segment offers a technical laboratory, testing services, and professional interpretation of laboratory results by licensed physicians who specialize in pathology and oncology. The therapeutic development segment is a pharmaceutical research and development entity.

The Company’s Chief Executive Officer also serves as its CODM. The CODM oversees the Company’s operations and evaluates financial data for itstwo operating segments separately to make resource allocation decisions. The financial information regularly provided to the CODM includes various performance metrics by reportable segment, such as gross profit, operating income or loss, income or loss before income taxes, net income or loss from consolidated operations, and net income or loss attributable to Fulgent, all presented in accordance with U.S. GAAP. Additionally, the CODM receives these metrics including gross profit, operating income or loss, income or loss before income taxes, net income or loss from consolidated operations, and net income or loss attributable to Fulgent on a non-GAAP basis, which excludes the impact of equity-based compensation expenses, acquisition-related costs, amortization of intangible assets, and impairment losses. Although multiple financial metrics are provided, the CODM primarily relies on adjusted operating income or loss, on a non-GAAP basis, to evaluate segment performance and allocate resources as this measure enhances the CODM’sability to compare past financial performance with current performance and analyze underlying business performance and trends. The balance sheet is presented on a consolidated basis, as the CODM does not use asset or liability information, including fixed assets, to assess segment performance. As a result, segment asset and liability details are not disclosed. The non-GAAP financial measures disclosed below should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.

The newly acquired entity, ANP, is considered part of the therapeutic development segment as this acquisition was strategically undertaken to gain full control over the patents and technologies utilized in the development of drug candidates within the therapeutic development segment. Consequently, ANP’s operations are integrated into the therapeutic development segment, with shared resources and collaborative efforts, and the CODM evaluates ANP’s operations as part of the therapeutic development segment’s consolidated financial information. Therefore, ANP’s financial results are grouped within the therapeutic development segment’s reporting. ANP generates revenue from technologies licensed to pharmaceutical and biotech companies, as well as contract research organizations, or CROs.

There is no inter-segment allocation of interest expense and income taxes. There is no inter-segment revenue and operating income or loss. The Company did not allocate income tax by segment. Information regarding the Company’s operations and assets for its reportable segments as well as geographic information are as follows, all dollars are in thousands:

Significant items by segment excluded from the adjusted operating (loss) income:

Revenue by segment:

Depreciation and amortization by segment:

Interest income and expense by segment:

Total assets by segment:

Geographic distribution of revenue:

Geographic distribution of property, plant and equipment, net:

Note 8. Debt, Commitments, and Contingencies

Debt

Notes payable as of September 30, 2025, consisted of$2.4 million of notes payable related to an installment sale contract the Company entered in February 2022 for a building. The notes payable related to the installment sale are due in February 2030, and carry an interest rate of 1.08%. The current portion and noncurrent portion are$0.5 million and$2.0 million, respectively, and the noncurrent portion is included in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. The interest expense for the three and nine months ended September 30, 2025, and 2024, was not significant.

Operating and Finance Leases

See Note 9. Leases, for further information.

Contingencies

From time to time, the Company may be subject to legal proceedings and claims arising in the ordinary course of business.

As previously disclosed in the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Company has received a Civil Investigative Demand, or CID, issued by the U.S. Department of Justice, or the DOJ, pursuant to the False Claims Act related to its investigation of allegations of medically unnecessary laboratory testing, improper billing for laboratory testing, and remuneration received or provided in violation of the Anti-Kickback Statute and the Stark Law. Among other things, this CID requests information and records relating to certain of the Company’s customers named in this CID.

Similar to other laboratories in the industry, the Company has been subject to an audit by the U.S. Health Resources and Services Administration, or HRSA, with respect to its reimbursement for COVID-19 tests furnished to patients believed to be uninsured. The Company recorded approximately $548.9 million of reimbursements from HRSA under the Uninsured Program during the years ended December 31, 2022, 2021, and 2020. There is uncertainty with respect to the methodology HRSA will use in its audit and whether and how HRSA will extrapolate audit results. The Company has provided HRSA’s auditors with requested information in connection with its audit in an effort to resolve any issues related to its audit, including any reimbursed amounts that may need to be returned to HRSA. The Company has also received a CID issued by the DOJ pursuant to the False Claims Act related to the DOJ’s investigation as to whether the Company submitted or caused to be submitted false claims to the Uninsured Program.

The Company is fully cooperating with the DOJ in connection with the CIDs that it has received. The Company cannot currently predict when these CIDs and HRSA audit matters will be resolved, the reasonable or likely outcome of these matters, or their potential impact, which may materially and adversely affect the Company’s business, prospects, and financial condition. These matters are not formal claims, and discussions and investigations remain ongoing. As such, the Company cannot reasonably estimate the loss or range of loss, if any, that may result from any material government investigations, audits, and reviews in which it is currently involved, given the inherent difficulty in predicting regulatory action, fines and penalties, if any, and the various remedies and levels of judicial review available to the Company in the event of an adverse finding. As a result, the Company has not recorded any liability related to these CIDs or audit matters.

Note 9. Leases

Lessee

The Company is party as a lessee to various non-cancelable operating leases with varying terms through March 2034 primarily for laboratory and office space and equipment. The Company has options to renew some of these leases after their expirations. On a lease-by-lease basis, the Company considers such options, which may be elected at the Company’s sole discretion, in determining the lease term. The Company also has a finance lease for lab equipment with a term through December 2026, some of which were acquired in business combinations. The Company does not have any leases with variable lease payments. The Company’s operating lease agreements do not contain any residual value guarantees, material restrictive covenants, bargain purchase options, or asset retirement obligations.

The Company’s headquarters are located in El Monte, California, which is comprised of various corporate offices and a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988, or CLIA, accredited by the College of American Pathologists, or CAP, and licensed by the State of California Department of Public Health. Other CLIA-certified laboratories are located in Coppell, Texas; Needham, Massachusetts; Phoenix, Arizona; and Alpharetta, Georgia. The Company has also obtained National Association of Testing Authorities, or NATA, accreditation in Dulwich, Australia.

The operating and finance lease right-of-use asset, or ROU asset, short-term lease liabilities, and long-term lease liabilities as of September 30, 2025, and December 31, 2024, were as follows:

The following was operating and finance lease expense:

Supplemental information related to leases was the following:

The following is a maturity analysis of operating and finance lease liabilities using undiscounted cash flows on an annual basis with renewal periods included:

Note 10. Equity-Based Compensation

The Company has included equity-based compensation expense as part of cost of revenue and operating expenses in the accompanying Condensed Consolidated Statements of Operations as follows:

Note 11. Income Taxes

The Company recorded consolidated benefit from income taxes of$0.7 million and$2.8 million for the three and nine months ended September 30, 2025, respectively, compared to$3.8 million and$6.3 million for the three and nine months ended September 30, 2024, respectively. The Company’s effective tax rates were 9% and 7% for the three and nine months ended September 30, 2025, respectively, compared to 21% and 14% for the three and nine months ended September 30, 2024, respectively. The change in the effective tax rate compared to prior periods is due to the valuation allowance in the current period that precludes the Company from recognizing the benefit from net operating losses.

The Company is under examination by certain tax authorities for the 2020 to 2021 and 2023 tax years. While the timing of the conclusion of the examination is uncertain, the Company believes that adequate amounts have been reserved for adjustments that may result. During 2025, the statutes of limitations will lapse on the Company’s 2021 federal tax year and certain 2020 and 2021 state tax years. The Company does not believe the federal or state statute lapses or any other event will significantly impact the balance of unrecognized tax benefits in the next 12 months.

The Company received$0.1 million and$1.8 million in income tax refunds in the three and nine months ended September 30, 2025, respectively, and$2.9 million and$9.8 million in the three and nine months ended September 30, 2024, respectively. The income tax refunds received were not netted in the income tax paid amounts included in the supplemental disclosure in the accompanying Condensed Consolidated Statements of Cash Flows.

During the nine months ended September 30, 2025, the Company purchased $33.8 million of Investment Tax Credits, or ITCs, under the transferability provisions of the Inflation Reduction Act of 2022 for $31.7 million in cash. The $2.1 million difference between the purchase price and the face value of the credits has been recorded as an increase to the Company’s income tax benefit for the period. The Company will not utilize any of the acquired credits on its 2024 tax return. Instead, the Company will carry back the credits to its 2021 and 2022 tax years and file a request for a refund. As such, the entire $33.8 million is reflected as an increase in the Company’s prepaid income taxin other current assets in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2025. The payment of this refund may be delayed during the pendency of and as a result of the U.S. “government shutdown” in effect as of the date of these financial statements.

On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law, making permanent certain provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing. In accordance with ASC 740, “Income Taxes,” the Company has recognized the effects of the new tax law in the period of enactment. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The legislation does not have a material impact on our consolidated financial statements for the quarter ended September 30, 2025. The Company is still evaluating the potential impact of the changes in the OBBBA on future periods.

Note 12. Loss per Share

The following table presentsthe calculation of basic and diluted loss per share for the three and nine months ended September 30, 2025, and 2024:

The following securities have been excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive:

In the three and nine months ended September 30, 2025, and 2024, the Company had outstanding stock options and restricted stock units that were excluded from the weighted-average share calculation for continuing operations due to the Company’s net loss positions.

In the three and nine months ended September 30, 2025, the Company also had contingently issuable shares for contingent consideration to the acquisition of ANP that were excluded from the weighted-average share calculation for continuing operations due to the Company’s net loss positions. The milestones have not been satisfied as of September 30, 2025, thus, nothing was included in dilutive shares. See more details in Note 15. Business Combinations.

Note 13. Related Party

Prior to April 25, 2025, Ming Hsieh, the Chief Executive Officer and Chairperson of the Board of Directors, was on the board of directors and an approximately 20% owner of ANP, with which the Company entered into certain drug-related licensing and development service agreements.

The Chief Executive Officer of Fulgent Pharma, Ray Yin, is the Founder, President and Chief Technology Officer of ANP. The Company incurred zero and$0.6 million related to the licensing and development services in the three and nine months ended September 30, 2025, prior to April 25, 2025, respectively, and$0.6 million and$1.6 million in the three and nine months ended September 30, 2024, respectively. As of April 25, 2025, and December 31, 2024, the Company owed$0.3 million and$0.2 million, respectively, to ANP in connection with these relationships. The Company also entered into an employee service agreement with ANP in April 2023 and recognized insignificant amounts in the three and nine months ended September 30, 2025, and 2024. Insignificant amounts were owed to the Company by ANP in connection with the employee service agreement as of April 25, 2025, and December 31, 2024. In July 2025, the Company completed an acquisition of 100% of the outstanding equity of ANP, which included the settlement of all outstanding liabilities and receivables. See more details in Note 15. Business Combinations.

Note 14. Goodwill and Intangible Assets

The Company has identified its laboratory services business and its therapeutic development business as itstwo operating segments, and the Company determined that the operating segments represented thetwo reporting units. The newly acquired entity, ANP, is considered part of therapeutic development segment.

Therapeutic Development

The changes in the carrying amounts of goodwill for the therapeutic development segment in thenine months ended September 30, 2025 were as follows:

The Company tests for goodwill impairment at the reporting unit level on December 31st of each year and more frequently if events or circumstances indicate a potential impairment. Based upon the results of the quantitative assessments the Company performed as of December 31, 2024, the Company concluded that the fair values of the therapeutic development reporting unit and the IPR&D asset at December 31, 2024, were greater than the carrying values and that there was no impairment.

During the nine months ended September 30, 2025, there have been no significant changes except for the acquisition of ANP. The acquisition of ANP resulted in $3.0 million in goodwill and $3.9 million in IPR&D. The Company engaged a third-party valuation company for the valuation of the IPR&D on the acquisition date. There is no indication of a potential impairment for the Company's goodwill and IPR&D.

There can be no assurance that the estimates and assumptions management made for the purposes of the goodwill or IPR&D impairment analysis will prove to be accurate predictions of future performance. It is possible that the conclusions regarding impairment or recoverability of goodwill or intangible assets could change in future periods. Management will continue to monitor the therapeutic development reporting unit. For all IPR&D projects, there are major risks and uncertainties associated with the timely and successful completion of development and commercialization of these drug candidates, including the ability to confirm their efficacy based on data from clinical trials, the ability to obtain necessary regulatory approvals, and the ability to successfully complete these tasks within budgeted costs. The Company is not able to market a human therapeutic drug without obtaining regulatory approvals, and such approvals require completing clinical trials that demonstrate a drug candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from insurance payors, including government healthcare programs and private insurance plans, impact the revenues a product can generate. Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values.

Summaries ofbalances for the intangible assets by reporting segment as of September 30, 2025, and December 31, 2024, were as follows:

During the three months ended September 30, 2025, the Company recorded $2.3 million of customer relationships and $3.9 million of IPR&D attributable to the acquisition of ANP. See more details in Note 15. Business Combinations.

Amortization of intangible assets was$2.0 million and$6.0 million in each of the three and nine months ended September 30, 2025, and 2024, respectively.

Based on the carrying value of intangible assets recorded as of September 30, 2025, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for intangible assets is expected to be as follows:

Note 15. Business Combinations

ANP Technologies, Inc.

On July 9, 2025, the Company completed an acquisition of 100% ofthe outstanding equity of ANP, an innovation-driven company, which has developed multiple proprietary product platforms. The acquisition was structured as a combination of cash and stock, net of cash received. This acquisition enables the Company to secure ownership of the patents previously licensed from ANP, which are currently utilized in ongoing clinical studies. By securing full ownership of these intellectual property rights, the Company aims to enhance its control over the development and commercialization of related therapeutic candidates, thereby aligning with its strategic objectives to advance clinical programs.

The financial results of ANP are included in the condensed consolidated financial statements from the date of acquisition. The Company allocated the purchase price to tangible assets and identified intangible assets acquired, liabilities assumed and goodwill based on estimated fair values. As additional information becomes available, including the filing and finalization of federal and state tax returns for periods prior to the acquisition date, the Company may further update the preliminary purchase price allocation during the remainder of the measurement period (up to one year from the acquisition date). The following tables summarize the consideration and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

The acquisition includes a contingent consideration arrangement that requires the Company to issue up to 292,682 shares of the Company’s common stock to the sellers of ANP upon ANP’s achievement of certain minimum levels of cash receipts over the next two years. The contingent consideration is classified as equity, and the fair value of $5.7 million was calculated based on the stock price of the Company’s common stock on the acquisition date. The fair value of the contingent consideration does not need to be remeasured, as the subsequent settlement will be accounted for as equity.

The merger agreement calls for the Company to holdback $1.9 million to serve as collateral for indemnification of the equity holders. $1.0 million of the holdback will be released to the sellers of ANP after the initial survival date (three years after closing) and the remaining amount is to be released four years after the closing date.

The goodwill of$3.0 million arising from the acquisition is attributed to the expected synergies, assembled workforce and other benefits that will potentially be generated from the business combination and deferred tax. The goodwill recognized is not deductible for tax purposes.

The identified intangible assets acquired consisted of $3.9 million IPR&D which is an indefinite-lived asset and as such is not amortized, and$2.3 million customer relationships with an estimated amortization life of 18 years.

The fair value of the IPR&D was estimated using the cost to recreate method of the cost approach. The cost to recreate method estimates the expense to the Company if the intangible assets were to be recreated. The fair value of the customer relationships was estimated using the Multiperiod Excess Earnings Method, or MPEEM, under the income approach. Under the MPEEM, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows attributable only to the subject intangible asset after deducting contributory asset charges. The incremental after-tax cash flows attributable to the customer contract are then discounted to their present value at a risk-adjusted rate of return. The useful lives of the intangible assets for amortization purposes were determined by considering the period of expected cash flows used to measure the fair values of the intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic and other factors that may limit the useful life. The customer relationships are amortized on a straight-line basis over the estimated useful lives.

The revenue and operating loss of the acquiree since the acquisition date are$0.1 million and$0.3 million, respectively, which are included in the accompanying Condensed Consolidated Statements of Operations.

The transaction costs associated with the acquisition of ANP consisted primarily of legal, regulatory and financial advisory fees of approximately$0.1 million and$0.4 million for the three and nine months ended September 30, 2025, respectively. These transaction costs were expensed as incurred as general and administrative expense in the respective periods.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is based on the combined results of operations of Fulgent and ANP as if the acquisition had occurred on January 1, 2024. The unaudited pro forma financial information does not reflect the effect of costs or synergies that may result from the acquisition and has been adjusted for the following:

Acquisition-related costs - Acquisition-related costs incurred by both Fulgent and ANP were excluded from the net loss attributable to Fulgent, and total costs were$2.1 million and$2.4 million for the three and nine months ended September 30, 2025, respectively.

Related-party transactions - Related-party transactions between Fulgent and ANP that would be considered intercompany transactions were excluded from revenue and the net loss attributable to Fulgent, and total costs were zero and$0.6 million for the three and nine months ended September 30, 2025, respectively, and$0.6 million and$1.6 million for the three and nine months ended September 30, 2024, respectively.

Other adjustments to the net income attributable to Fulgent were zero and$0.1 million for the three months ended September 30, 2025, respectively, and insignificant and$0.1 million for the three and nine months ended September 30, 2024, respectively.

The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of future operating results of the combined company. This information should not be used as a predictive measure of the Company's future financial position, results of operations, or liquidity.

Note 16. Stock Repurchase Program

In March 2022, the Company’s Board of Directors authorized a $250.0 million stock repurchase program. Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions. The stock repurchase program has no expiration from the date of authorization.

During the three and nine months ended September 30, 2025, the Company repurchased zero and 0.6 million shares of its common stock, respectively, at an aggregate cost ofzero and$10.9 million, respectively, under the stock repurchase program. During the three and nine months ended September 30, 2024, the Company repurchased zero and 10,000 shares of its common stock, respectively, at an aggregate cost ofzero and$0.2 million, respectively. As of September 30, 2025, a total of approximately$139.6 million remained available for future repurchases of its common stock under the stock repurchase program.

Note 17. Retirement Plans

The Company offers a 401(k) retirement savings plan, or the 401(k) Plan, for its employees, including its executive officers, who satisfy certain eligibility requirements. The Internal Revenue Code of 1986, as amended, allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) Plan. The Company matches contributions to the 401(k) Plan based on the amount of salary deferral contributions the participant makes to the 401(k) Plan. The Company will match up to 4% of an employee’s compensation that the employee contributes to their 401(k) Plan account. Total Company matching contributions to the 401(k) Plan were$1.0 million and$3.2 million for the three and nine months ended September 30, 2025, respectively, and$1.2 million and$3.1 million for the three and nine months ended September 30, 2024, respectively.

Note 18. Subsequent Events

Purchase of Income Tax Credits

On October 9, 2025, the Company purchased $72.4 million of Investment Tax Credits under the transferability provision of the Inflation Reduction Act of 2022 for $67.9 million in cash. Refer to Note 11. Income Taxes, for additional details with regard to the treatment of Investment Tax Credits purchased previously.