CareDx, Inc.
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
CDNA$78.56+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0001217234-26-000046
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001217234-26-000061
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 132 previous paragraphs and 136 current paragraphs.
71 unchanged; 41 reworded; 24 added; 17 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (24)
Current report
•Revenue of $139 million, an increase of 39% year-over-year
Current report
•Testing Services revenue of $119 million, an increase of 65% year-over-year
Current report
•Testing Services volume of approximately 75,900, an increase of 51% year-over-year, including contributions following our acquisition of NavDx
Current report
•Patient and Digital Solutions revenue of $20 million, an increase of 31% year-over-year
Current report
Our product revenue was derived primarily from sales of kitted laboratory products. No product revenue was recognized for the three months ended September 30, 2026.
Current report
*Percentage not meaningful
Current report
The decrease in product revenue was due to the sale of our lab products business, which was completed on June 30, 2026. See Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Current report
The decrease in cost of product was due to the sale of our lab products business, which was completed on June 30, 2026. See Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Current report
Income tax benefit
Current report
Income tax benefit increased by $8.6 million for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a deferred income tax benefit of $9.8 million recognized related to the valuation allowance release in connection with the Naveris Transaction (see Notes 6 and 12 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information) which was partially offset by approximately $1.2 million related to federal and state income tax expense.
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
*Percentage not meaningful
Current report
The decrease in product revenue was due to the sale of our lab products business, which was completed on June 30, 2026, following which no product revenue was recognized. See Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Current report
The decrease in cost of product was due to the sale of our lab products business, which was completed on June 30, 2026. See Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Current report
Income tax benefit
Current report
There have been no material changes to our critical accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, except for the accounting policies and estimates related to the Naveris Transaction and the sale of our lab products business.
Current report
Business Combination - Naveris Transaction
Current report
We account for acquired businesses using the acquisition method of accounting under ASC 805, Business Combinations. With respect to business combinations, we determine the purchase price, including contingent consideration, and allocate the purchase price of acquired businesses to the tangible and intangible assets acquired and liabilities assumed, based on estimated fair values. The excess of the purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill. The allocation of the purchase price for the acquisition of Naveris is preliminary and subject to change during the measurement period, which will not exceed one year from the acquisition date.
Current report
We engaged a third-party professional service provider to assist in determining the fair values of the purchase consideration, assets acquired, and liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to contingent consideration and intangible assets, such as developed technology, trade names, and customer relationships. Critical estimates that we have used in valuing these elements include, but are not limited to, future expected cash flows using valuation techniques (e.g., Monte Carlo simulation models) and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable.
Current report
The fair values of the developed technology and customer relationships were determined using income-based valuation methods, and the trade names were valued using a relief-from-royalty method. Significant inputs used in the intangible asset valuations included forecasted revenue and margins, an obsolescence factor reflecting the expected decline of the existing technology, expected research and development cost savings, contributory asset charges, customer attrition rates, royalty rates, long-term growth rates, and risk-adjusted discount rates.
Current report
The purchase price of Naveris included contingent consideration payable upon the achievement of specified revenue-based milestones in respect of fiscal years ending December 31, 2026 and December 31, 2027, with any payments expected to be made in 2027 and 2028, respectively. A portion of the contingent consideration is attributable to post-combination services and is recognized as compensation expense over the requisite service period. The fair value of the contingent consideration was estimated using a Monte Carlo simulation based on significant unobservable inputs, including projected NavDx revenue, revenue volatility, a revenue risk premium, an operational leverage ratio, a credit spread, and term-matched risk-free rates based on the U.S. Treasury yield curve. The valuation used a risk-neutral framework and a mid-period discounting convention. The contingent consideration is classified within Level 3 of the fair value hierarchy and is remeasured at fair value at each reporting date until settlement, with changes in fair value recognized in operating expenses in the condensed consolidated statements of operations.
Current report
The most significant assumption underlying the fair values of both the acquired intangible assets, principally the NavDx developed technology, and the contingent consideration is our forecast of NavDx revenue, including test volume growth and reimbursement per test. Because the contingent consideration is based on NavDx revenue for fiscal years 2026 and 2027 and is capped at $100.0 million, its fair value is particularly sensitive to near-term deviations from forecast and to the revenue volatility assumption. Our NavDx revenue forecast is subject to a number of risks and uncertainties, many of which are outside of our control, including changes in Medicare and commercial payer coverage and reimbursement, the pace of clinician adoption, competition from other circulating tumor DNA assays, and our ability to successfully integrate Naveris in a specialty oncology market in which we have limited operating experience, each of which is discussed further in Part II, Item 1A, “Risk Factors”. The discount rates and credit spread used in these valuations are also significant assumptions that are affected by interest rates and conditions in the financial markets.
Current report
Accordingly, changes in these assumptions, particularly our forecast of NavDx revenue, could result in material adjustments to the contingent consideration liability and the amounts we ultimately pay, as well as impairment of goodwill or intangible assets, any of which could have a material impact on our results of operations in a given reporting period.
Current report
On June 30, 2026, we completed the sale of our lab products business to Eurobio and received cash proceeds of approximately $171.7 million, reflecting the base purchase price of $170.0 million, as adjusted for estimated working capital, cash, and other adjustments, subject to finalization of other customary post-closing purchase price adjustments, excluding transaction costs. During the nine months ended September 30, 2026, we recognized a gain on sale of lab products business of approximately $113.0 million, measured as the consideration received less the carrying amount of the net assets transferred to Eurobio or otherwise derecognized (including $4.4 million of goodwill allocated to the lab products business, which reduced the gain on sale), net of transaction costs of approximately $4.8 million. The reclassification of accumulated foreign currency translation adjustments related to the foreign entities sold was included in the gain on sale of lab products business. The gain on sale of lab products business was presented within operating expenses in the unaudited condensed consolidated statements of operations.
Removed paragraphs (17)
Previous report
•Revenue of $132 million, an increase of 52% year-over-year
Previous report
• Testing Services revenue of $100 million, an increase of 61% year-over-year, and Testing Services volume of approximately 58,000, an increase of 17% year-over-year
Previous report
• Patient and Digital Solutions revenue of $19 million and Lab Product revenue of $13 million, representing year-over-year growth of 50% and 8%, respectively
Previous report
• Average revenue per test of approximately $1,720, including $16 million in prior period revenue
Previous report
• Closed the sale of the Lab Products business on June 30, recognizing a $113 million gain on sale included in operating income
Previous report
Our product revenue is derived primarily from sales of AlloSeq Tx, Olerup SSP and QTYPE products. Product revenue represented 10% and 9% of our total revenue for the three and six months ended June 30, 2026, respectively, and 14% and 13% of our total revenue for the three and six months ended June 30, 2025, respectively. We recognize product revenue from the sale of products to end-users, distributors and strategic partners when all revenue recognition criteria are satisfied. We generally have a contract or a purchase order from a customer with the specified required terms of order, including the number of products ordered. Transaction prices are determinable and products are delivered and risk of loss passed to the customer upon either shipping or delivery, as per the terms of the agreement. There are no further performance obligations related to a contract and revenue is recognized at the point of delivery consistent with the terms of the contract or purchase order.
Previous report
Product revenue increased by $1.0 million, or 8%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to higher sales of our commercial NGS-based kitted solutions.
Previous report
Cost of product decreased by $0.6 million, or 13%, for the three months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to improved manufacturing efficiencies and lower costs resulting from favorable pricing terms negotiated with key manufacturers.
Previous report
Income tax (expense) benefit
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
Product revenue increased by $0.5 million, or 2%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to higher sales of our commercial NGS-based kitted solutions.
Previous report
Cost of product decreased by $1.4 million, or 13%, for the six months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to improved manufacturing efficiencies and lower costs resulting from favorable pricing terms negotiated with key manufacturers.
Previous report
Litigation settlement expense
Previous report
Income tax (expense) benefit
Previous report
Income tax expense increased by $3.9 million for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a current tax expense of $3.8 million recognized on the taxable gain from the sale of our lab products business, which was completed on June 30, 2026. See Note 1 and Note 11 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Previous report
Sale of Lab Products Business
Previous report
Other than the gain on sale of lab products business, there were no material changes in the matters for which we make critical accounting estimates in the preparation of our unaudited condensed consolidated financial statements during the three and six months ended June 30, 2026 as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 25, 2026.
Reworded paragraphs (41)
Previous wording
Our commercially available post-transplant testing services consist of AlloSure® Kidney, a donor-derived cell-free DNA, or dd-cfDNA, solution for kidney transplant patients, AlloMap® Heart, a gene expression profiling solution for heart transplant patients, AlloSure® Heart, a dd-cfDNA solution for heart transplant patients, HeartCare, the combined use of AlloMap Heart and AlloSure Heart, and AlloSure® Lung, a dd-cfDNA solution for lung transplant patients. Our commercially available specialty oncology service is NavDx®, a blood-based test that detects and monitors human papillomavirus (HPV)-mediated cancers — including head, neck, and anal cancers — from diagnosis through post-treatment molecular residual disease (MRD) surveillance. We have initiated several clinical studies to generate data on our existing and planned future testing services. From time to time, we partner with pharma and biopharma companies to use our technology and tests, often in clinical trials, to identify or screen for patients that may be appropriate candidates for their products. We also provide digital and patient solutions, including clinical practice management software, data and analytics tools, and patient support offerings.
Current wording
Our commercially available post-transplant testing services consist of AlloSure® Kidney, a donor-derived cell-free DNA, or dd-cfDNA, solution for kidney transplant patients, AlloMap® Heart, a gene expression profiling solution for heart transplant patients, AlloSure® Heart, a dd-cfDNA solution for heart transplant patients, HeartCare, the combined use of AlloMap Heart and AlloSure Heart, and AlloSure® Lung, a dd-cfDNA solution for lung transplant patients. Our commercially available specialty oncology service is NavDx®, a blood-based test that detects and monitors human papillomavirus (HPV)-mediated cancers — including head, neck, and anal cancers — from diagnosis through post-treatment molecular residual disease (MRD) surveillance. Our post-transplant testing services and NavDx are collectively referred to as “the CLIA Tests”. We have initiated several clinical studies to generate data on our existing and planned future testing services. From time to time, we partner with pharma and biopharma companies to use our technology and tests, often in clinical trials, to identify or screen for patients that may be appropriate candidates for their products. We also provide digital and patient solutions, including clinical practice management software, data and analytics tools, and patient support offerings.
Previous wording
• Net income of $111 million, compared to net loss of $9 million for the second quarter of 2025
Current wording
•Net income of $19 million, compared with net income of $2 million for the third quarter of 2025
Previous wording
• Cash flow from operations of $31 million
Current wording
•Cash flow from operations of $13 million
Previous wording
Our testing services revenue is derived from AlloSure Kidney, AlloMap Heart, AlloSure Heart and AlloSure Lung tests, which represented 76% and 77% of our total revenue for each of the three and six months ended June 30, 2026, respectively, and 72% of our total revenue for each of the three and six months ended June 30, 2025. Our testing services revenue depends on a number of factors, including (i) the number of tests performed; (ii) establishment of coverage policies by third-party insurers and government payers; (iii) our ability to collect from payers with whom we do not have positive coverage determination, which often requires that we pursue a case-by-case appeals process; (iv) our ability to recognize revenues on tests billed prior to the establishment of reimbursement policies, contracts or payment histories; and (v) how quickly we can successfully commercialize new product offerings.
Current wording
Our testing services revenue is derived from the CLIA Tests, which represented 86% and 80% of our total revenue for the three and nine months ended September 30, 2026, respectively, and 72% of our total revenue for each of the three and nine months ended September 30, 2025. Our testing services revenue depends on a number of factors, including (i) the number of tests performed; (ii) establishment of coverage policies by third-party insurers and government payers; (iii) our ability to collect from payers with whom we do not have positive coverage determination, which often requires that we pursue a case-by-case appeals process; (iv) our ability to recognize revenues on tests billed prior to the establishment of reimbursement policies, contracts or payment histories; and (v) how quickly we can successfully commercialize new product offerings.
Previous wording
Our patient and digital solutions revenue is mainly derived from sales of our Ottr software, XynQAPI, MedActionPlan, mTilda (HLA Data Systems), TransChart and Tx Access licenses, services and SaaS agreements across the digital portfolio, as well as our pharmacy sales at The Transplant Pharmacy, or TTP. Patient and digital solutions revenue represented 15% and 14% of our total revenue for the three and six months ended June 30, 2026, respectively, and 15% and 14% of our total revenue for the three and six months ended June 30, 2025, respectively.
Current wording
Our patient and digital solutions revenue is mainly derived from sales of our Ottr software, XynQAPI, MedActionPlan, mTilda (HLA Data Systems), TransChart and Tx Access licenses, services and SaaS agreements across the digital portfolio, as well as our pharmacy sales at the CareDx Pharmacy (formerly known as The Transplant Pharmacy, or TTP). Patient and digital solutions revenue represented 14% of our total revenue for each of the three and nine months ended September 30, 2026 and 15% of our total revenue for each of the three and nine months ended September 30, 2025.
Previous wording
The Number of AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung Tests We Receive and Report
Current wording
The Number of the CLIA Tests We Receive and Report
Previous wording
The growth of our testing services is tied to the number of AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung patient samples we receive and patient results we report. We incur costs in connection with collecting and shipping all samples and a portion of the costs when we cannot ultimately issue a report. As a result, the number of patient samples received largely correlates directly to the number of patient results reported.
Current wording
The growth of our testing services is tied to the number of patient samples for the CLIA Tests we receive and patient results we report. We incur costs in connection with collecting and shipping all samples and a portion of the costs when we cannot ultimately issue a report. As a result, the number of patient samples received largely correlates directly to the number of patient results reported.
Previous wording
The growth of our patient and digital revenues is tied to the continued successful implementation of our pharmacy solutions, Ottr, MedActionPlan and XynQAPI software businesses, as well as continued support and maintenance of existing pharmacy, MedActionPlan, Ottr and XynManagement customers. The Ottr software, TransChart, Tx Access and XynQAPI are currently implemented in multiple locations in the United States. The Ottr software implementation and XynQAPI implementation and support teams are based in Omaha, Nebraska. In addition, patient solutions offered by TTP in Flowood, Mississippi include hospital-affiliated pharmacies located on-site at the transplant center and specialty pharmacies that provide transplant-specific care and dispensing services. Additionally, with HLA Data Systems, we are able to support HLA laboratories in managing their day-to-day workflow.
Current wording
The growth of our patient and digital revenues is tied to the continued successful implementation of our pharmacy and software solutions, as well as continued support and maintenance of these products and services. Our software is currently implemented in multiple locations in the United States. The software implementation teams are based in Omaha, Nebraska. In addition, the CareDx Pharmacy is located mainly in Flowood, Mississippi and Atlanta, Georgia, and includes hospital-affiliated pharmacies located on-site at the transplant center and specialty pharmacies that provide transplant-specific care and dispensing services. Additionally, with HLA Data Systems, we are able to support HLA laboratories in managing their day-to-day workflow.
Previous wording
Testing services revenue increased by $37.9 million, or 61%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by testing services volume growth of 17% as compared to the same period in 2025. The variance between revenue growth and volume growth was primarily driven by $18.0 million of increased net collections associated with tests performed and revenue recognized in prior periods under ASC 606 and an increase in revenue per test, partially offset by a $2.4 million reduction in testing services revenue related to the recognition of refund reserves payable to third-party payers.
Current wording
Testing services revenue increased by $47.0 million, or 65%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily driven by $12.5 million of revenue from NavDx tests performed following the Naveris Transaction and testing services volume growth of 20.8% (excluding NavDx tests) as compared to the same period in 2025. The variance between revenue growth and volume growth was primarily driven by $17.3 million of revenue recognized during the period associated with tests performed in prior periods under ASC 606, compared to $5.9 million in the same period in 2025, partially offset by a $2.6 million reduction in testing services revenue related to the recognition of refund reserves payable to third-party payers.
Previous wording
Patient and digital solutions revenue increased by $6.4 million, or 50%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by higher pharmacy sales and growth in our digital solutions, particularly an expanded customer base from Ottr software.
Current wording
Patient and digital solutions revenue increased by $4.8 million, or 31%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily driven by higher pharmacy sales and growth in our digital solutions, particularly an expanded customer base from Ottr software.
Previous wording
Cost of testing services increased by $0.5 million, or 3%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributed to higher testing services volume, partially offset by the continuous efficiency measures to lower laboratory expenses.
Current wording
Cost of testing services increased by $10.0 million, or 68%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributed to higher testing services volume, amortization of acquired intangible assets amounting to $2.7 million, and NavDx testing costs following the Naveris Transaction, partially offset by continued efficiency measures to lower laboratory expenses.
Previous wording
Cost of patient and digital solutions increased by $6.4 million, or 78%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to an increase in the cost of goods from our pharmacy business.
Current wording
Cost of patient and digital solutions increased by $5.3 million, or 51%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to an increase in the cost of goods from our pharmacy business.
Previous wording
Research and development expenses increased by $5.5 million, or 33%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $4.0 million in personnel-related costs, $0.8 million in consulting and licensing expense, $0.5 million in partnership milestone expense and $0.2 million in software-related expenses.
Current wording
Research and development expenses increased by $4.6 million, or 27%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $1.0 million in clinical trial and lab supplies expenses, $1.0 million in software-related expenses, $0.9 million in personnel-related costs, $0.8 million in amortization and impairment expense, $0.3 million in consulting and licensing expense, $0.3 million in equipment-related costs and $0.3 million in facilities-related costs.
Previous wording
Sales and marketing expenses increased by $16.5 million, or 35%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $14.1 million in personnel-related costs, $2.4 million in marketing expenses, $0.9 million in travel expenses and $0.3 million in software related expenses, partially offset by a decrease of $1.2 million in stock-based compensation expense.
Current wording
Sales and marketing expenses increased by $7.2 million, or 29%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $7.0 million in personnel-related costs, $0.5 million in travel expenses, $0.4 million in marketing expenses and $0.2 million in software-related expenses, partially offset by a decrease of $0.9 million in stock-based compensation expense.
Previous wording
General and administrative expenses increased by $13.2 million, or 48%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $5.6 million in personnel-related costs, $5.6 million in legal and consulting expenses and $2.3 million in stock-based compensation expense, partially offset by a decrease of $0.3 million in equipment-related costs.
Current wording
General and administrative expenses increased by $9.6 million, or 34%, for the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $4.5 million in personnel-related costs, $2.3 million in stock-based compensation expense, $2.0 million in legal and consulting expenses and $1.8 million in software-related expenses, partially offset by a decrease of $1.0 million in facilities-related costs.
Previous wording
Interest income, net decreased by $0.6 million for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to a lower average balance in cash, cash equivalents and marketable securities.
Current wording
Interest income, net increased by $0.2 million for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to a higher average balance in cash and cash equivalents.
Previous wording
Other (expense) income, net decreased by $0.5 million for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to foreign exchange losses during the three months ended June 30, 2026.
Current wording
Other (expense) income, net increased by $0.5 million for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to foreign exchange losses during the three months ended September 30, 2025.
Previous wording
Testing services revenue increased by $67.4 million, or 54%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by testing services volume growth of 17.3% as compared to the same period in 2025. The variance between revenue growth and volume growth was primarily driven by $35.6 million of increased net collections associated with tests performed and revenue recognized in prior periods under ASC 606 and an increase in revenue per test, partially offset by a $5.8 million reduction in testing services revenue related to the recognition of refund reserves payable to third-party payers.
Current wording
Testing services revenue increased by $114.4 million, or 58%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily driven by $12.5 million of revenue from NavDx tests performed following the Naveris Transaction and testing services volume growth of 18.3% (excluding NavDx tests) as compared to the same period in 2025. The variance between revenue growth and volume growth was primarily driven by $52.9 million of revenue recognized during the period associated with tests performed in prior periods under ASC 606, compared to $1.0 million in the same period in 2025, partially offset by an $8.4 million reduction in testing services revenue related to the recognition of refund reserves payable to third-party payers.
Previous wording
Patient and digital solutions revenue increased by $10.4 million, or 42%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by higher pharmacy sales and growth in our digital solutions, particularly an expanded customer base from Ottr software.
Current wording
Patient and digital solutions revenue increased by $15.2 million, or 38%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily driven by higher pharmacy sales and growth in our digital solutions, particularly an expanded customer base from Ottr software.
Previous wording
Cost of testing services increased by $2.5 million, or 8%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributed to higher testing services volume, partially offset by the continuous efficiency measures to lower laboratory expenses.
Current wording
Cost of testing services increased by $12.5 million, or 28%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributed to higher testing services volume, amortization of acquired intangible assets amounting to $2.7 million, and NavDx testing costs following the Naveris Transaction, partially offset by continued efficiency measures to lower laboratory expenses.
Previous wording
Cost of patient and digital solutions increased by $10.4 million, or 65%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to an increase in the cost of goods from our pharmacy business.
Current wording
Cost of patient and digital solutions increased by $15.7 million, or 60%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to an increase in the cost of goods from our pharmacy business.
Previous wording
Research and development expenses increased by $8.4 million, or 24%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $7.0 million in personnel-related costs, $1.4 million in consulting and licensing expense and $0.5 million in software-related expenses, partially offset by a decrease of $0.5 million in partnership milestone expense.
Current wording
Research and development expenses increased by $13.0 million, or 25%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $7.7 million in personnel-related costs, $1.3 million in consulting and licensing expense, $1.3 million in depreciation and impairment expenses, $1.1 million in clinical trial and lab supplies expenses, $1.0 million in facilities-related expenses, $0.7 million in software-related expenses and $0.2 million in equipment-related expenses, partially offset by a decrease of $0.3 million in stock-based compensation expense.
Previous wording
Sales and marketing expenses increased by $9.2 million, or 38%, for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $8.7 million in personnel-related costs, $1.0 million in marketing expenses and $0.1 million in travel expenses, partially offset by a decrease of $0.6 million in stock-based compensation expense.
Current wording
Sales and marketing expenses increased by $23.7 million, or 33%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $21.1 million in personnel-related costs, $2.9 million in marketing expenses, $1.5 million in travel expenses and $0.4 million in software-related expenses, partially offset by a decrease of $2.2 million in stock-based compensation expense.
Previous wording
General and administrative expenses increased by $20.9 million, or 42%, for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $9.2 million in personnel-related costs, $7.5 million in legal and consulting expenses and $4.3 million in stock-based compensation expense, partially offset by a decrease of $0.1 million in equipment-related costs.
Current wording
General and administrative expenses increased by $30.5 million, or 39%, for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to increases of $13.9 million in personnel-related costs, $7.9 million in legal and consulting expenses, $6.6 million in stock-based compensation expense and $4.4 million in software-related expenses, partially offset by the absence of a $2.3 million one-time impairment charge related to an intangible asset and associated construction in progress recognized in the prior-year period.
Previous wording
Gain on sale of lab products business of $113.0 million in the current period reflects the gain on the sale of our lab products business. For details over the aforementioned sale, see Note 1, Organization and Description of Business, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q under the caption “Sale of lab products business,” which is incorporated herein by reference.
Current wording
Gain on sale of lab products business of $113.0 million in the current period reflects the gain on the sale of our lab products business. For details regarding the sale, see Note 1, Organization and Description of Business, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q under the caption “Sale of Lab Products Business,” which is incorporated herein by reference.
Previous wording
Litigation settlement expenses decreased by $5.1 million, or 89%, for the six months ended June 30, 2026, compared to the same period in 2025. The decrease in litigation settlement expense was mainly due to the settlement of $5.4 million related to the Securities Class Action lawsuit and additional litigation settlement expense of $0.4 million during the six months ended June 30, 2025, which was partially offset by a $0.6 million settlement related to the Derivative Actions Lawsuit during the six months ended June 30, 2026. For details over the aforementioned lawsuits, see Note 8, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q under the caption “Litigation and Indemnification Obligations”, which is incorporated herein by reference.
Current wording
Litigation settlement expenses decreased by $5.1 million, or 89%, for the nine months ended September 30, 2026, compared to the same period in 2025. The decrease in litigation settlement expense was mainly due to the settlement of $5.4 million related to the Securities Class Action and additional litigation settlement expense of $0.4 million during the nine months ended September 30, 2025, which was partially offset by a $0.6 million settlement related to the Edelman Derivative Action and the Burns Derivative Action during the nine months ended September 30, 2026. For details regarding these lawsuits, see Note 9, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q under the caption “Litigation and Indemnification Obligations”, which is incorporated herein by reference.
Previous wording
Interest income, net decreased by $1.5 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to a decrease in average balance of cash, cash equivalents and marketable securities.
Current wording
Interest income, net decreased by $1.3 million for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to a decrease in average balance of cash, cash equivalents and marketable securities.
Previous wording
Other (expense) income, net decreased by $1.1 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to foreign exchange losses during the period.
Current wording
Other (expense) income, net decreased by $0.7 million for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to foreign exchange gain during the nine months ended September 30, 2025.
Previous wording
Income tax expense increased by $4.0 million for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a current tax expense of $3.8 million recognized on the taxable gain from the sale of our lab products business, which was completed on June 30, 2026. See Note 1 and Note 11 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Current wording
Income tax benefit increased by $4.7 million for the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a deferred income tax benefit of $9.8 million related to the valuation allowance partial release in connection with the Naveris Transaction (see Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information) which was partially offset by the current tax expense of $4.6 million recognized on the taxable gain from the sale of our lab products business (see Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information) and approximately $0.5 million related to federal and state income tax expense.
Previous wording
Cash Flows for the Six Months Ended June 30, 2026 and 2025
Current wording
Cash Flows for the Nine Months Ended September 30, 2026 and 2025
Previous wording
Cash provided by operating activities for the six months ended June 30, 2026 was $34.9 million. Net operating assets decreased by $2.9 million. Our noncash items primarily included $113.0 million in gain on sale of lab products business, $20.5 million in stock-based compensation expense, $6.7 million of depreciation and amortization expense, $2.7 million of amortization of right-of-use assets, $1.4 million of amortization of premium on short-term marketable securities, net and $0.2 million of loss on disposal of assets.
Current wording
Cash provided by operating activities for the nine months ended September 30, 2026 was $47.7 million. Net operating assets changed by $12.9 million. Our noncash items primarily included $113.0 million in gain on sale of lab products business, $30.1 million in stock-based compensation expense, $13.9 million of depreciation and amortization expense, $9.8 million of deferred income tax benefit in connection with the Naveris Transaction, $4.5 million of amortization of right-of-use assets, $1.4 million of amortization of premium on short-term marketable securities, net, and $0.2 million of loss on disposal of assets.
Previous wording
Cash used in operating activities for the six months ended June 30, 2025 was $16.7 million. Net operating assets decreased by $27.2 million. Our noncash items primarily included $18.4 million in stock-based compensation expense, $7.3 million of depreciation and amortization expense, $2.7 million of amortization of right-of-use assets, $0.6 million of amortization of premium on short-term marketable securities, net, and $0.5 million of revaluation of contingent consideration to estimated fair value.
Current wording
Cash provided by operating activities for the nine months ended September 30, 2025 was $20.7 million. Net operating assets changed by $8.4 million. Our noncash items primarily included $26.8 million in stock-based compensation expense, $11.1 million of depreciation and amortization expense, $4.0 million of amortization of right-of-use assets, $2.3 million of one-time impairment charge related to an intangible asset and associated construction in progress, $1.5 million of amortization of premium on short-term marketable securities, net, and $0.5 million of revaluation of contingent consideration to estimated fair value.
Previous wording
For the six months ended June 30, 2026, net cash provided by investing activities of $291.6 million was primarily related to net proceeds from the sale of lab products business of $164.8 million, sales of marketable securities of $114.6 million, and maturities of marketable securities of $59.7 million, partially offset by purchases of marketable securities of $39.9 million, $5.7 million related to additions of property and equipment and $2.0 million related to purchase of long-term investments.
Current wording
For the nine months ended September 30, 2026, net cash provided by investing activities of $143.8 million was primarily related to net proceeds from the sale of our lab products business of $164.8 million, sales of marketable securities of $114.6 million, and maturities of marketable securities of $59.7 million, partially offset by the acquisition of Naveris in the amount of $145.8 million, net of cash acquired, purchases of marketable securities of $39.9 million, $7.3 million related to additions of property and equipment and $2.5 million related to purchase of long-term investments.
Previous wording
For the six months ended June 30, 2025, net cash provided by investing activities of $24.7 million was primarily related to proceeds from maturities of marketable securities of $94.6 million, partially offset by purchases of marketable securities of $67.3 million, and $2.6 million related to additions of capital expenditures.
Current wording
For the nine months ended September 30, 2025, net cash provided by investing activities of $37.1 million was primarily related to proceeds from maturities of marketable securities of $126.0 million, partially offset by purchases of marketable securities of $84.4 million, $3.9 million related to additions of property and equipment, and $0.7 million related to acquisition of an intangible asset.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2026 of $18.4 million was primarily due to repurchase and retirement of common stock of $12.2 million, taxes paid related to net share settlements of restricted stock units of $8.5 million, and payment for contingent consideration of $1.5 million, partially offset by proceeds from issuances of common stock under our employee stock purchase plan of $2.5 million, and proceeds from exercise of stock options of $1.4 million.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2026 of $5.5 million was primarily due to taxes paid related to net share settlements of restricted stock units of $13.1 million, repurchase and retirement of common stock of $12.2 million, and payment for contingent consideration of $1.5 million, partially offset by proceeds from exercise of stock options of $18.8 million and proceeds from issuances of common stock under our employee stock purchase plan of $2.5 million.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2025 of $54.5 million was primarily due to repurchase and retirement of common stock of $50.0 million, taxes paid related to net share settlements of restricted stock units of $9.3 million, and payment for contingent consideration of $1.5 million, offset by proceeds from issuances of common stock under our employee stock purchase plan of $2.3 million, and proceeds from exercise of stock options of $4.1 million.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2025 of $80.9 million was primarily due to repurchase and retirement of common stock of $75.6 million, taxes paid related to net share settlements of restricted stock units of $10.5 million, and payment for contingent consideration of $1.5 million, partially offset by proceeds from issuances of common stock under our employee stock purchase plan of $2.3 million, and proceeds from exercise of stock options of $4.3 million.
Previous wording
We have incurred significant losses and negative cash flows from operations and had an accumulated deficit of $505.4 million at June 30, 2026. As of June 30, 2026, we had cash and cash equivalents of $373.6 million and no debt outstanding.
Current wording
We have historically incurred significant losses and negative cash flows from operations and had an accumulated deficit of $486.2 million at September 30, 2026. As of September 30, 2026, we had cash and cash equivalents of $250.5 million and no debt outstanding.
Previous wording
On May 30, 2025, our Board of Directors authorized a new share repurchase program of up to $50.0 million in shares of our common stock over a period of up to two years, commencing on May 30, 2025, or the May 2025 Repurchase Program. The May 2025 Repurchase Program may be carried out, subject to approval by a committee of our Board of Directors, through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. During the three and six months ended June 30, 2026, the Company purchased an aggregate of 0.6 million shares of our common stock under the May 2025 Repurchase Program for an aggregate purchase price of $12.2 million. As of June 30, 2026, no amounts were available for future share repurchases under the May 2025 Repurchase Program.
Current wording
On May 30, 2025, our Board of Directors authorized a share repurchase program of up to $50.0 million in shares of our common stock over a period of up to two years, commencing on May 30, 2025, or the May 2025 Repurchase Program. The May 2025 Repurchase Program may be carried out, subject to approval by a committee of our Board of Directors, through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. There were no repurchases made during the three months ended September 30, 2026 under the May 2025 Repurchase Program. During the nine months ended September 30, 2026, we purchased an aggregate of 0.6 million shares of our common stock under the May 2025 Repurchase Program for an aggregate purchase price of $12.2 million. As of September 30, 2026, no amounts remained available for future share repurchases under the May 2025 Repurchase Program.
Previous wording
Additionally, on April 24, 2026, our Board of Directors authorized the April 2026 Repurchase Program, which provides for the repurchase of up to $100.0 million in shares of our common stock over a period of up to two years, commencing on April 30, 2026. The April 2026 Repurchase Program may be carried out, subject to approval by a committee of our Board of Directors, through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. There were no repurchases made during the three and six months ended June 30, 2026 under the April 2026 Repurchase Program.
Current wording
Additionally, on April 24, 2026, our Board of Directors authorized the April 2026 Repurchase Program, which provides for the repurchase of up to $100.0 million in shares of our common stock over a period of up to two years, commencing on April 30, 2026. The April 2026 Repurchase Program may be carried out, subject to approval by a committee of our Board of Directors, through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. There were no repurchases made during the three and nine months ended September 30, 2026 under the April 2026 Repurchase Program. As of September 30, 2026, $100.0 million remained available under the April 2026 Repurchase Program.
Previous wording
On July 1, 2026, we completed the acquisition of Naveris and paid $161.8 million in cash, subject to customary post-closing adjustments, of which $5.0 million was deposited into an escrow account. In addition, Naveris’ equity holders are eligible to receive up to $100.0 million in additional cash consideration contingent upon the achievement of specified revenue-based milestones in respect of the fiscal years ending December 31, 2026 and December 31, 2027. See Note 13 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
Current wording
On July 1, 2026, we completed the acquisition of Naveris for total consideration of $203.3 million, consisting of $159.3 million in cash and contingent consideration with an acquisition-date fair value of $44.0 million. The cash consideration included $151.7 million paid to Naveris’ securityholders, of which $5.0 million was deposited into an escrow account, and $7.6 million was paid to settle vested stock options. In connection with the closing, we also paid $9.7 million of Naveris’ transaction expenses, which were assumed as liabilities in the acquisition, and acquired $13.5 million of cash. The purchase price remains subject to customary post-closing adjustments. Naveris’ former securityholders are eligible to receive up to $100.0 million in additional cash consideration contingent upon the achievement of specified revenue-based milestones for the fiscal years ending December 31, 2026 and December 31, 2027; the portion attributable to the 2026 milestone, if earned, would be payable in the first half of 2027. See Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Litigation settlement expenses decreased by $0.4 million, or 100%, for the three months ended June 30, 2026, compared to the same period in 2025. The decrease in litigation settlement expense was mainly due to litigation settlement expense during the three months ended June 30, 2025.
Previous report — wording carried elsewhere
Gain on sale of lab products business of $113.0 million in the current period reflects the gain on the sale of our lab products business. For details over the aforementioned sale, see Note 1, Organization and Description of Business, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q under the caption “Sale of lab products business,” which is incorporated herein by reference.
Previous report — wording carried elsewhere
•Gain on sale of lab products business.