Personalis, Inc.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
PSNL$15.79+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-211896
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001193125-26-332817
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 102 current paragraphs.
58 unchanged; 33 reworded; 11 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
On July 20, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tempus (sometimes referred to as Parent), Aviary Development, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub I”) and Toucan Development, LLC, a Nevada limited liability company and a wholly owned subsidiary of Parent (“Merger Sub II”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, (a) Merger Sub I will be merged with and into Personalis (the “First Merger”), with Personalis surviving the First Merger as a wholly owned subsidiary of Parent (the “First Surviving Corporation”), and (b) as part of the same overall transaction, immediately after the First Merger, the First Surviving Corporation will merge with and into Merger Sub II (together, with the First Merger, referred to collectively as the “Merger”), with Merger Sub II surviving as a wholly owned subsidiary of Parent (see Note 13, Subsequent Events, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information).
Current report
Second Quarter 2026 Strategic and Operational Highlights
Current report
Secured Medicare Coverage for IO Monitoring: Received Medicare coverage approval for NeXT Personal® for immunotherapy monitoring for patients with late-stage solid tumors;
Current report
Secured Medicare Coverage for Neoadjuvant Therapy Monitoring for Breast Cancer: Received Medicare coverage approval for NeXT Personal for monitoring treatment response to NAT in patients diagnosed with Stage II-III Triple-Negative Breast Cancer (TNBC) or HER2-positive (HER2+) breast cancer;
Current report
Presented Compelling Colorectal Cancer Recurrence Detection: The prospective VICTORI study led by the University of British Columbia showed NeXT Personal detected 100% of all patient relapses, including all distant metastases in historically difficult-to-detect regions like the lung. Notably, just four weeks after surgery, NeXT Personal detected over 80% of patients who later relapsed, providing clinicians with an early signal of cancer to inform treatment pathways;
Current report
Highlighted Importance of Sub-10 ppm Sensitivity in Lung Cancer: Approximately 21% of pre-operative adenocarcinoma and 18% of post-operative landmark detections in the TRACERx study were below 10 ppm—thresholds frequently missed by less sensitive assays. Patients detected in this range experienced a three-fold increased risk of recurrence compared to patients with undetectable ctDNA, potentially enabling much earlier clinical intervention.
Current report
(1) Includes related party revenue of $8.4 million and $1.9 million for the three months ended June 30, 2026 and 2025, respectively, and $11.5 million and $2.4 million for the six months ended June 30, 2026 and 2025, respectively.
Current report
(1) Includes related party revenue of $8.4 million and $1.9 million for the three months ended June 30, 2026 and 2025, respectively, and $11.5 million and $2.4 million for the six months ended June 30, 2026 and 2025, respectively.
Current report
Specific components of the increase in the first half of 2026 were a $3.8 million increase in diagnostic test costs, a $1.2 million increase in direct material costs due to higher biopharma revenue, a $1.8 million increase in personnel costs, a $0.4 million increase in equipment maintenance costs, and a $0.3 million increase in facilities costs, offset partially by a $0.5 million decrease in laboratory supplies costs.
Current report
Specific components of the increase in the second quarter of 2026 were a $2.2 million increase in personnel and personnel-related costs driven by increased headcount and employee compensation and a $1.8 million increase due to higher lab supplies utilized, IT and internal operation supports, and consulting services for R&D projects.
Current report
Specific components of the increase in the first half of 2026 were a $6.6 million increase in Tempus' sales and marketing expenses and commercial-related expenses associated with higher NeXT Personal Dx testing volume, a $5.9 million increase in personnel and personnel-related expenses due to higher sales commission, headcount, and employee compensation, and a $1.6 million increase in professional services primarily associated with the Merger Agreement, partially offset by a $0.6 million decrease in depreciation expenses.
Removed paragraphs (11)
Previous report
First Quarter 2026 Highlights
Previous report
Secured Milestone Medicare Coverage for Lung Cancer: Received Medicare coverage approval in the first quarter for the surveillance of cancer recurrence in lung cancer patients for Stage I to III non-small cell lung cancer (NSCLC). This marks the Company's second major Medicare coverage decision in six months, alongside breast cancer
Previous report
Announced Early Access Launch of Real-Time Variant Tracker™: Launched a pioneering new feature for NeXT Personal® that empowers clinicians to longitudinally track resistance and therapeutically targetable mutations during routine disease monitoring, and potentially optimize treatment
Previous report
Published Neoadjuvant Treatment Monitoring Results in Breast Cancer: Featured data in the Journal of Clinical Oncology from the PREDICT-DNA prospective study for Triple-Negative (TNBC) and HER2+ breast cancer patients that showed NeXT Personal can outperform current standard approaches for predicting patient outcomes following neoadjuvant therapy (NAT)
Previous report
Presented Compelling Data at the American Association for Cancer Research (AACR) Annual Meeting:
Previous report
o
Previous report
Colorectal Cancer (CRC) Podium Presentation: Highlighted the ultrasensitive ctDNA detection by NeXT Personal for predicting and tracking response to neoadjuvant immunotherapy in CRC patients, demonstrating a remarkable 100% negative predictive value and 100% specificity for disease relapse following surgery
Previous report
o
Previous report
Lung Cancer Poster Presentation: Demonstrated that ultrasensitive ctDNA monitoring with NeXT Personal successfully predicts the early response of immunotherapy in recurrent metastatic NSCLC patients
Previous report
(1) Includes related party revenue of $3.1 million and $0.5 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
Previous report
(1) Includes related party revenue of $3.1 million and $0.5 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
Reworded paragraphs (33)
Previous wording
We develop, market, and sell advanced cancer genomic testing services. Our testing services are used by physicians to detect residual or recurrent cancer in patients, monitor cancer response to therapy, and uncover insights for therapy selection. Our testing services are used by pharmaceutical companies for translational research, biomarker discovery, the development of personalized cancer therapies, and clinical trials. We also provide whole exome sequencing services for other diagnostic companies and whole genome sequencing services for population sequencing initiatives.
Current wording
We develop, market, and sell advanced cancer genomic testing services. Our testing services are used by physicians to detect residual or recurrent cancer in patients, monitor cancer response to therapy, and uncover insights for therapy selection. Our testing services are also used by pharmaceutical companies for translational research, biomarker discovery, the development of personalized cancer therapies, and clinical trials. We also provide whole exome sequencing services for other diagnostic companies and whole genome sequencing services for population sequencing initiatives.
Previous wording
Today, our testing services are routinely used by many of the largest oncology-focused pharmaceutical companies for analysis of patient samples in their clinical trials and drug development programs. Our advanced genomic sequencing and analytics also support the development of personalized neoantigen therapies for cancer and other next-generation cancer immunotherapies. For example, we are providing genomic testing services to ModernaTX, Inc. ("Moderna") in its ongoing clinical trials evaluating a personalized cancer therapy. In addition, we have partnered with diagnostics companies by providing our advanced tumor profiling and analysis capabilities as an input to their products. We also have a collaboration with Tempus that enables Tempus to market our NeXT Personal® Dx test to physicians for breast cancer, lung cancer, colorectal cancer and immuno-oncology monitoring, and to market and sell NeXT Personal to Tempus' pharmaceutical and biotech customers who wish to bundle MRD testing with other Tempus offerings in a given study, through November 25, 2029. We have also pursued non-cancer related business opportunities, specifically within the population sequencing market, by providing whole genome sequencing ("WGS") services under contract with the U.S. Department of Veterans Affairs Million Veteran Program ("VA MVP").
Current wording
Currently, our testing services are routinely used by many of the largest oncology-focused pharmaceutical companies for analysis of patient samples in their clinical trials and drug development programs. Our advanced genomic sequencing and analytics also support the development of personalized neoantigen therapies for cancer and other next-generation cancer immunotherapies. For example, we are providing genomic testing services to ModernaTX, Inc. ("Moderna") in its ongoing clinical trials evaluating a personalized cancer therapy. In addition, we have partnered with diagnostics companies by providing our advanced tumor profiling and analysis capabilities as an input to their products. We also have a collaboration with Tempus that enables Tempus to market our NeXT Personal® Dx test to physicians for breast cancer, lung cancer, colorectal cancer and immuno-oncology monitoring, and to market and sell NeXT Personal to Tempus' pharmaceutical and biotech customers who wish to bundle MRD testing with other Tempus offerings in a given study, through November 25, 2029. We have also pursued non-cancer related business opportunities, specifically within the population sequencing market, by providing whole genome sequencing ("WGS") services under contract with the U.S. Department of Veterans Affairs Million Veteran Program ("VA MVP").
Previous wording
Our work in oncology is underpinned by our experience and capacity for next-generation sequencing at scale. We have the capacity to sequence and analyze over 350 trillion bases of DNA per week in our facility. We believe that our capacity is already larger than most cancer genomics companies, and we continue to build automation and other infrastructure to scale further as demand increases. To date, we have sequenced approximately 585,000 human samples, of which approximately 227,000 were whole human genomes.
Current wording
Our work in oncology is underpinned by our experience and capacity for next-generation sequencing at scale. We have the capacity to sequence and analyze over 350 trillion bases of DNA per week in our facility. We believe that our capacity is already larger than most cancer genomics companies, and we continue to build automation and other infrastructure to scale further as demand increases. To date, we have sequenced approximately 605,000 human samples, of which approximately 237,000 were whole human genomes.
Previous wording
Total revenue of $15.5 million decreased 25%, or $5.1 million, during the first quarter of 2026 compared to the first quarter of 2025, due to (i) lower revenue from pharma testing services and other customers; (ii) an expected revenue decline from Enterprise sales, which was primarily Natera; and (iii) planned lower population sequencing revenue from the VA MVP. Revenue from Enterprise sales was $0.4 million in the first quarter of 2026 compared to $2.4 million in the first quarter of 2025 and the decline was due to the expected winding down of the project with Natera. These decreases were partially offset by higher clinical test revenue, which increased $1.1 million, or 365%, compared to the first quarter of 2025, as a result of obtaining Medicare reimbursement coverage decisions in November 2025 and February 2026 for breast and lung cancer, respectively.
Current wording
Total revenue of $22.4 million increased 30%, or $5.2 million, during the second quarter of 2026 compared to the second quarter of 2025, due to (i) higher revenue from pharma testing services and (ii) higher clinical test revenue as a result of obtaining Medicare reimbursement coverage decisions in November 2025, February 2026 and May 2026 for breast cancer, lung cancer, immunotherapy monitoring for patients with late-stage solid tumors and neoadjuvant therapy (NAT) monitoring for breast cancer, respectively. These increases were partially offset by (i) the expected revenue decline from Enterprise sales due to the completion of the project with Natera, and (ii) planned lower population sequencing revenue from the VA MVP.
Previous wording
Key business accomplishments and financial updates in the first quarter of 2026 include:
Current wording
Key business accomplishments and financial updates in the second quarter of 2026 include:
Previous wording
Enterprise sales includes sales of tumor profiling and diagnostic tests directly to other businesses as an input to their products. Revenue from our commercial relationship with Natera to provide advanced tumor analysis for use in Natera's MRD test currently makes up substantially all of the revenue in this category.
Current wording
Enterprise sales includes sales of tumor profiling and diagnostic tests directly to other businesses as an input to their products. Revenue from our previous commercial relationship with Natera to provide advanced tumor analysis for use in Natera's MRD test made up substantially all of the revenue in this category.
Previous wording
Cost of revenue consists of raw materials costs, personnel costs (salaries, bonuses, stock-based compensation, payroll taxes, and benefits), laboratory supplies and consumables, depreciation and maintenance on equipment, allocated facilities and information technology (“IT”) costs and clinical diagnostic test costs. We expect variability in our gross margins over the medium-term due to fluctuations in customer mix and volume, investments in newer sequencing platforms and new capabilities such as automation of laboratory workflows, processing of diagnostic tests for the clinical market while we work to secure reimbursement, and costs related to our Fremont facility. Over the long-term, we anticipate higher gross margins as growing revenue leads to economies of scale.
Current wording
Cost of revenue includes costs for materials, personnel (salaries, bonuses, stock-based compensation, payroll taxes, and benefits), laboratory supplies and consumables, depreciation and equipment maintenance, allocated facilities and information technology (“IT”) costs and clinical diagnostic test costs. We expect variability in our gross margins over the medium-term due to fluctuations in customer mix and volume, investments in newer sequencing platforms and new capabilities, such as automation of laboratory workflows, and processing of diagnostic tests for the clinical market while we work to secure reimbursement. Over the long-term, we anticipate gross margin expansion as we expect increases in revenue to result in economies of scale.
Previous wording
Research and development expenses consist of costs incurred for the research and development of our testing services and costs related to conducting studies and collaborations with partners to validate the clinical utility of our offerings. The expenses primarily consist of personnel costs (salaries, bonuses, stock-based compensation, payroll taxes, and benefits); laboratory supplies and consumables; costs of processing samples for research, product development, collaborations and studies; depreciation and maintenance on equipment; and allocated facilities and IT costs. We include in research and development expenses the costs to further develop software we use to operate our laboratory, analyze the data it generates, and automate our operations.
Current wording
Research and development expenses includes costs incurred to develop technology and offerings, expenses for conducting clinical studies with collaborators and partners to validate the clinical benefits of our offerings and develop and implement workflow automation technologies. The expenses primarily consist of personnel costs (salaries, bonuses, stock-based compensation, payroll taxes, and benefits); laboratory supplies and consumables; costs of processing samples for research, product development, collaborations and studies; depreciation and maintenance on equipment; and allocated facilities and IT costs. We include in research and development expenses the costs to further develop software we use to operate our laboratory, analyze the data it generates, and automate our operations.
Previous wording
Selling expenses consist of personnel costs (salaries, commissions, bonuses, stock-based compensation, payroll taxes, and benefits), customer support expenses, direct marketing expenses, and market research. Our general and administrative expenses include costs for our executive, accounting, finance, legal, and human resources functions. These expenses consist of personnel costs (salaries, bonuses, stock-based compensation, payroll taxes, and benefits), corporate insurance, audit and legal expenses, consulting costs, and allocated facilities and IT costs. We expense all selling, general and administrative costs as incurred.
Current wording
Selling expenses consist of personnel costs (salaries, commissions, bonuses, stock-based compensation, payroll taxes, and benefits), customer support expenses, fees paid to Tempus (see Note 8, Related Party Transactions, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), marketing communication expenses, and market research. Our general and administrative expenses include costs for administration, finance and accounting, legal, and human resources functions. These expenses consist of personnel costs (salaries, bonuses, stock-based compensation, payroll taxes, and benefits), corporate insurance, audit and legal expenses, consulting costs, and facilities and IT costs. We expense all selling, general and administrative costs as incurred.
Previous wording
We expect selling, general and administrative expenses to continue to increase over time to support the growth of our clinical diagnostic offerings and expected gain of market share.
Current wording
We expect selling, general and administrative expenses to continue to increase over time to support the growth of our clinical diagnostic offerings.
Previous wording
(2) Includes related party sales and marketing expenses of $2.9 million and $0.6 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
Current wording
(2) Includes related party sales and marketing expenses of $3.8 million and $0.9 million for the three months ended June 30, 2026 and 2025, respectively, and $6.7 million and $1.5 million for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
(1) Includes related party accounts receivable of $4.5 million and $2.5 million as of March 31, 2026 and December 31, 2025, respectively.
Current wording
(1) Includes related party accounts receivable of $7.5 million and $2.5 million as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
(2) Includes related party liabilities of $4.4 million and $5.7 million as of March 31, 2026 and December 31, 2025, respectively.
Current wording
(2) Includes related party liabilities of $5.4 million and $5.7 million as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
(3) Includes related party contract liabilities of $2.7 million and nil as of March 31, 2026 and December 31, 2025, respectively.
Current wording
(3) Includes related party contract liabilities of $1.7 million and nil as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
The decrease in pharma testing services revenue in the first quarter of 2026 was primarily due to a decrease in the clinical trial samples processed for Moderna in addition to a small decline in selling prices. We expect variability in revenue from pharmaceutical companies in the future due to the timing of their patient enrollment for clinical trials or project schedules.
Current wording
The increase in pharma testing services revenue in the second quarter of 2026 and the first half of 2026 compared to the same periods of 2025 was primarily due to an increase in the number of clinical trial samples processed for Merck. We expect variability in revenue from pharmaceutical companies in the future due to the timing of their patient enrollment for clinical trials or project schedules.
Previous wording
The decrease in revenue from enterprise sales in the first quarter of 2026 was mainly due to the expected decrease in the number of samples processed for Natera after the second quarter of 2025 when the minimum volume commitments in our agreement with Natera expired. We no longer have a material commercial relationship with Natera and do not expect to have one going forward.
Current wording
The decrease in revenue from enterprise sales in the second quarter of 2026 and the first half of 2026 compared to the same periods of 2025 was due to the expected decrease in the number of samples processed for Natera after the second quarter of 2025 when the minimum volume commitments in our agreement with Natera expired. We no longer have a commercial relationship with Natera and do not expect to have one going forward.
Previous wording
Revenue recognized each period from population sequencing is impacted by timing of our fulfillment of samples under each annual task order. The decrease in revenue in the first quarter of 2026 was due to a planned decrease in the number of samples we processed. Our annual task orders received in 2025 and 2024 were $13.5 million and $7.5 million, respectively. Our contract with the VA MVP does not include specific testing turnaround times. Therefore, we may modulate the volume of samples processed from the VA MVP to accommodate sample volumes from other customers, which can vary from period to period. We anticipate fulfilling the task order received in August 2025 during the first three quarters of 2026.
Current wording
Revenue recognized each period from population sequencing is impacted by timing of our fulfillment of samples under each annual task order. The decrease in revenue in the second quarter of 2026 and in the first half of 2026 compared to the same periods of 2025 was due to a planned decrease in the number of samples we processed. Our annual task orders received in 2025 and 2024 were $13.5 million and $7.5 million, respectively. Our contract with the VA MVP does not include specific testing turnaround times. Therefore, we may modulate the volume of samples processed from the VA MVP to accommodate sample volumes from other customers, which can vary from period to period. We anticipate fulfilling the task order received in August 2025 during the first three quarters of 2026.
Previous wording
Clinical diagnostic revenue is generated from Medicare and private insurance payors. In January 2024, we received a Medicare coverage determination for NeXT Dx, our ultra-comprehensive tumor genomic profiling assay. In November 2025, we received Medicare coverage determination for NeXT Personal Dx for post-treatment surveillance of cancer recurrence in patients with Stage II and III breast cancer, with an effective date of October 7, 2025. In February 2026, we also received Medicare coverage for NeXT Personal Dx for surveillance of patients with Stage I to III NSCLC, with an effective date of January 9, 2026. The increase in clinical diagnostic revenue in the first three months of 2026 was mainly attributable to an increase in NeXT Dx test volume and NeXT Personal Dx reimbursements received from certain private payors and Medicare for breast cancer and NSCLC surveillance.
Current wording
Clinical diagnostic revenue is generated from Medicare and private insurance payors. In January 2024, we received a Medicare coverage determination for NeXT Dx, our ultra-comprehensive tumor genomic profiling assay. In November 2025, we received Medicare coverage determination for NeXT Personal Dx for post-treatment surveillance of cancer recurrence in patients with Stage II and III breast cancer, with an effective date of October 7, 2025. In February 2026, we received Medicare coverage for NeXT Personal Dx for surveillance of patients with Stage I to III NSCLC, with an effective date of January 9, 2026. In May 2026, we received Medicare coverage for NeXT Personal Dx for immunotherapy monitoring for patients with late-stage solid tumors, with an effective date of March 16, 2026. In May 2026, we also received Medicare coverage for NeXT Personal Dx for monitoring treatment response to NAT in patients diagnosed with Stage II-III TNBC or HER2+ breast cancer, with an effective date of April 6, 2026. The increases in clinical diagnostic revenue in the second quarter of 2026 and in the first half of 2026 compared to the same periods of 2025 were mainly attributable to an increase in NeXT Dx test volume and NeXT Personal Dx reimbursements received from certain private payors and Medicare for breast cancer, NSCLC surveillance, immunotherapy monitoring for patients with late-stage solid tumors and NAT monitoring for breast cancer.
Previous wording
The increase in cost of revenue in the first quarter of 2026 was primarily due to increased clinical diagnostic test costs where the corresponding revenue and reimbursement amounts were less than the cost of the testing services due to selling testing services in advance of reimbursement in order to gain market share.
Current wording
The increase in cost of revenue in the second quarter of 2026 and in the first half of 2026 compared to the same periods of 2025 was primarily due to increased clinical diagnostic test costs where the corresponding revenue and reimbursement amounts were less than the cost of the testing services due to selling testing services in advance of Medicare reimbursement in order to gain market share.
Previous wording
Specific components of the increase were a $1.3 million increase in diagnostic test costs, a $0.8 million increase in personnel costs, and a $0.2 million increase in facilities expenses, offset partially by a $0.5 million decrease in direct material costs due to lower biopharma revenue.
Current wording
Specific components of the increase in the second quarter of 2026 were a $3.2 million increase in diagnostic test costs, a $1.6 million increase in direct material costs due to higher biopharma revenue, a $1.1 million increase in personnel costs, and a $0.3 million increase in equipment maintenance costs, offset partially by a $1.0 million decrease in laboratory supplies costs.
Previous wording
The increase in research and development expenses in the first quarter of 2026 was primarily due to an increase in personnel and personnel-related costs, expenses related to IT support, and lab supplies utilized. These expenses increased in order to further and complete clinical evidence studies, process development work to enhance laboratory operations’ productivity, and technology development.
Current wording
The increases in research and development in the second quarter of 2026 and in the first half of 2026 compared to the same periods of 2025 were primarily due to increased personnel and personnel-related costs due to higher compensation costs and increased headcount and R&D lab activities. These expenses increased in order to further and complete clinical evidence studies, process development work to enhance laboratory operations’ productivity, and technology development.
Previous wording
Specific components of the increase were a $1.4 million increase in personnel and personnel-related costs driven by increased headcount and employee compensation in the first quarter of 2026, a $0.3 million increase in IT-related expenses, and a $0.2 million increase in lab supplies utilized.
Current wording
Specific components of the increase in the first half of 2026 were a $3.7 million increase in personnel and personnel-related costs driven by increased headcount and employee compensation and a $2.2 million increase in lab supplies utilized, IT related expenses, and consulting services to support R&D projects and volume growth.
Previous wording
The increase in selling, general and administrative expenses was primarily due to an increase in selling related expenses associated with increases in testing volume for NeXT Personal Dx.
Current wording
The increases in selling, general and administrative expenses in the second quarter of 2026 and in the first half of 2026 compared to the same periods of 2025 were primarily due to increased personnel and personnel related expenses due to higher compensation costs and increased headcount and marketing expenses associated with increases in testing volume for NeXT Personal Dx.
Previous wording
Specific components of the increase were a $2.4 million increase in Tempus' sales & marketing expenses, a $1.8 million increase in personnel and personnel-related costs driven by increased headcount and employee compensation in the first quarter of 2026, and a $0.8 million increase in commercial related expenses associated with higher testing volume for NeXT Personal Dx. These expenses were further impacted by a $0.6 million increase in equipment-related expenses and subscription fees and a $0.3 million increase in professional services, partially offset by a $0.3 million decrease in depreciation costs.
Current wording
Specific components of the increase in the second quarter of 2026 were a $3.3 million increase in Tempus' sales and marketing expenses and commercial-related expenses associated with higher NeXT Personal Dx testing volume, a $3.5 million increase in personnel and personnel related expenses due to higher headcount and employee compensation, and a $1.3 million increase in professional services primary associated with the Merger Agreement, partially offset by a $0.3 million decrease in depreciation expenses.
Previous wording
The increase in interest income in the first quarter of 2026 compared to the same quarter in 2025 was driven by higher average investment balances, partially offset by decreased yields. Interest expense is the recognition of imputed interest on noninterest bearing loans.
Current wording
The increases in interest income in the second quarter of 2026 and the first half of 2026 compared to the same periods of 2025 were driven by higher average investment balances, partially offset by decreased yields. Interest expense is the recognition of imputed interest on noninterest bearing loans.
Previous wording
From our inception through March 31, 2026, we have funded our operations primarily from net proceeds from issuance of redeemable convertible preferred stock, IPO, follow-on equity offerings, At-the-Market ("ATM") facility (see Note 9, Stock-Based Compensation, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), Tempus exercising warrants and purchasing additional shares under an investment agreement, and Merck purchasing shares of our common stock under an investment agreement (see Note 8, Related Party Transactions, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), as well as debt financings. As of March 31, 2026, we had cash and cash equivalents of $73.6 million and short-term investments of $159.6 million.
Current wording
From our inception through June 30, 2026, we have funded our operations primarily from net proceeds from issuance of redeemable convertible preferred stock, IPO, follow-on equity offerings, At-the-Market ("ATM") facility (see Note 9, At-the-Market Equity Offerings, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), Tempus exercising warrants and purchasing additional shares under an investment agreement, and Merck purchasing shares of our common stock under an investment agreement (see Note 8, Related Party Transactions, in Part 1, Item 1 of this Form 10-Q in our Consolidated Financial Statements for additional information), as well as debt financings. As of June 30, 2026, we had cash and cash equivalents of $94.0 million and short-term investments of $118.7 million.
Previous wording
We have based these future funding requirements on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of lower demand for our testing services or other risks described in this Quarterly Report on Form 10-Q, we may seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing. We filed a sales agreement prospectus supplement in November 2025, pursuant to which we offered and sold $100.0 million of shares of our common stock through our ATM facility. As of March 31, 2026, no shares of our common stock remain available for sale. The sale of equity and convertible debt securities may result in dilution to our stockholders and, in the case of convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations. Additional capital may not be available on reasonable terms, or at all.
Current wording
We have based these future funding requirements on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. If the Merger is not completed and our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of lower demand for our testing services or other risks described in this Quarterly Report on Form 10-Q, we may seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing. We filed a sales agreement prospectus supplement in May 2026, pursuant to which we may offer and sell $150.0 million of shares of our common stock through our ATM facility, of which approximately $145.4 million remains available for sale as of June 30, 2026, provided that we may not sell any shares through the ATM facility while the closing of the Merger is pending. The sale of equity and convertible debt securities may result in dilution to our stockholders and, in the case of convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations. Additional capital may not be available on reasonable terms, or at all.
Previous wording
The increase in cash used in operating activities was primarily due to working capital needs and lower revenue with reduced gross margin.
Current wording
The increase in cash used in operating activities was primarily due to an increase in net loss.
Previous wording
The increase in cash used by investing activities was due to a $2.7 million increase in investment of our cash into short-term investments, $20.2 million lower proceeds from the maturity of short-term investments, and a $0.6 million increase in capital expenditures.
Current wording
The decrease in cash used by investing activities was primarily due to a $14.2 million decrease in investment of our cash into short-term investments, $9.0 million higher proceeds from the maturity of short-term investments, partially offset by a $4.0 million increase in capital expenditures.
Previous wording
The decrease in cash provided by financing activities was due to a $2.6 million decrease in proceeds from loans, a $2.1 million payment of a finance lease, and $1.0 million higher repayments of loans, partially offset by $3.3 million higher net proceeds from sales of common stock under our ATM facility and our equity incentive plans, and $0.1 million lower payments of costs associated with the Tempus and Merck investment agreements.
Current wording
The increase in cash provided by financing activities was primarily due to $7.7 million higher net proceeds from sales of common stock under our ATM facility and $3.1 million higher proceeds from issuance of common stock under equity incentive plans, partially offset by a $2.6 million decrease in proceeds from loans and a $2.1 million payment of a finance lease.
Previous wording
Our material cash requirements in the short- and long-term consist primarily of variable costs of revenue, operating expenditures, capital expenditures, property leases, and other spend. We plan to fund our material cash requirements with our existing cash and cash equivalents and short-term investments, which amounted to $233.2 million as of March 31, 2026, as well as anticipated cash receipts from customers. To fund our material cash requirements in the short- and long-term, we may also seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing.
Current wording
Our material cash requirements in the short- and long-term consist primarily of variable costs of revenue, operating expenditures, capital expenditures, property leases, and other spend. We plan to fund our material cash requirements with our existing cash and cash equivalents and short-term investments, which amounted to $212.7 million as of June 30, 2026, as well as anticipated cash receipts from customers. If the Merger is not completed, to fund our material cash requirements in the short- and long-term, we may also seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing.
Previous wording
Variable costs of revenue. From time to time in the ordinary course of business, we enter into agreements with vendors for the purchase of raw materials, laboratory supplies and consumables to be used in the sequencing of customer samples. However, we generally do not have binding and enforceable purchase orders beyond the short term, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project. We currently expect spending in this area to increase compared to the levels in 2025 to support expected higher levels of revenue.
Current wording
Variable costs of revenue. From time to time in the ordinary course of business, we enter into agreements with vendors for the purchase of raw materials, laboratory supplies and consumables to be used in the sequencing of customer samples. However, we generally do not have binding and enforceable purchase orders beyond the short term, and the timing and magnitude of purchase orders beyond such period is difficult to accurately project. We currently expect spending in this area to increase compared to the levels in 2025 in order to support expected higher levels of revenue.
Previous wording
Property leases. Our noncancelable operating lease payments were $60.6 million as of March 31, 2026. The timing of these future payments, by year, can be found in Note 7, Leases, in Part I, Item 1 of this Form 10-Q in the Consolidated Financial Statements.
Current wording
Property leases. Our noncancelable operating lease payments were $58.8 million as of June 30, 2026. The timing of these future payments, by year, can be found in Note 7, Leases, in Part I, Item 1 of this Form 10-Q in the Consolidated Financial Statements.