Guardant Health, Inc.

The following tables set forth the significant components of our results of operations for the periods presented.

(1)Amounts include stock-based compensation expense as follows:

Comparison of the Three Months Ended March 31, 2026 and 2025

Revenue

Total revenue was $301.7 million for the three months ended March 31, 2026, compared to $203.5 million for the three months ended March 31, 2025, an increase of $98.2 million, or 48%.

Oncology revenue was $205.0 million for the three months ended March 31, 2026, compared to $150.6 million for the three months ended March 31, 2025, an increase of $54.4 million, or 36%. This increase was driven primarily by an increase in oncology test volume to approximately 86,000 for the three months ended March 31, 2026 from approximately 59,000 for the three months ended March 31, 2025, and an increase in reimbursement for our oncology tests.

Biopharma and data revenue was $53.0 million for the three months ended March 31, 2026, compared to $45.4 million for the three months ended March 31, 2025, an increase of $7.6 million, or 17%. This increase was driven primarily by the achievement of certain milestones within our companion diagnostic development and regulatory approval service agreements, and revenue derived from our data services and the delivery of our tests for biopharmaceutical customers.

Screening revenue was $41.6 million for the three months ended March 31, 2026, compared to $5.7 million for the three months ended March 31, 2025, an increase of $35.9 million, or 633%. The increase was driven primarily by an increase in our Shield screening test volume to approximately 44,000 for the three months ended March 31, 2026 from approximately 9,000 for the three months ended March 31, 2025, which was the second full quarter following the FDA approval of our Shield screening test. The increase was also attributable to an increase in reimbursement for our Shield screening test.

Cost of Revenue

Cost of revenue was $104.9 million for the three months ended March 31, 2026, compared to $74.7 million for the three months ended March 31, 2025, an increase of $30.2 million, or 40%. This increase in cost of revenue was driven primarily by an increase in sample volume, partially offset by reduced cost per sample of our oncology tests, including Guardant360 Liquid; and reduced cost per sample of our Shield screening test.

Operating Expenses

Research and development expense

Research and development expenses were $91.0 million for the three months ended March 31, 2026, compared to $88.5 million for the three months ended March 31, 2025, an increase of $2.5 million, or 3%. This increase was related to continued investment in the development of our technologies and products.

Sales and marketing expense

Sales and marketing expenses were $169.1 million for the three months ended March 31, 2026, compared to $104.3 million for the three months ended March 31, 2025, an increase of $64.8 million, or 62%. This increase was related to commercial infrastructure expansion and marketing activities to support our Shield and oncology growth, primarily resulting in an increase of $33.4 million in personnel costs, and an increase of $21.5 million in marketing activity related costs.

General and administrative expense

General and administrative expenses were $57.9 million for the three months ended March 31, 2026, compared to $47.0 million for the three months ended March 31, 2025, an increase of $11.0 million, or 23%, primarily driven by an increase of $7.1 million in legal and other outside service costs, and $5.3 million in stock-based compensation.

Interest income

Interest income was $11.2 million for the three months ended March 31, 2026, compared to $9.1 million for the three months ended March 31, 2025, an increase of $2.0 million, or 22%. This increase was primarily due to increased average investment balances, partially offset by lower available market rates of return on our investment portfolio.

Interest expense

Interest expense was primarily related to the coupon interest, amortization of debt issuance costs, net of amortization of debt premium of our convertible senior notes for the three months ended March 31, 2026, and 2025. See Note 7, Debt to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on our convertible senior notes.

Other income (expense), net

Other income (expense), net was immaterial for the three months ended March 31, 2026, and was a $7.9 million income for the three months ended March 31, 2025, primarily attributable to a gain on extinguishment of convertible notes of $13.7 million related to the convertible notes exchange transaction completed in February 2025, partially offset by an impairment of $5.0 million recorded for one of our non-marketable equity security investments. See Note 7, Debt to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on the convertible notes exchange transaction.

Provision for income taxes

Provision for income taxes was immaterial for the three months ended March 31, 2026, and 2025.

Liquidity and capital resources

We have incurred losses and negative cash flows from operations since our inception, and as of March 31, 2026, we had an accumulated deficit of $3.1 billion. We expect to incur additional operating losses in the near future and our operating expenses will increase as we continue to invest in clinical studies and develop new products, expand our sales organization, and increase our marketing efforts to drive market adoption of our tests. As demand for our tests are expected to continue to increase from physicians and biopharmaceutical companies, we anticipate that our capital expenditure requirements could also increase if we require additional laboratory capacity.

We have funded our operations to date principally from the sales of our common stock, issuances of convertible notes and generation of our revenue. As of March 31, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $1.2 billion. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to provide liquidity while ensuring capital preservation. Additionally, we have investments held in marketable securities consisting primarily of commercial paper and U.S. treasury securities that can be immediately liquid.

Based on our current business plan, we believe our current cash, cash equivalents, restricted cash and marketable securities and anticipated cash flows from operations, will be sufficient to meet our anticipated cash requirements for more than 12 months from the date of this Quarterly Report on Form 10-Q. We may consider raising additional capital to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons. As our revenue is expected to grow long-term, we expect our accounts receivable and inventory balances to increase. Any increase in accounts receivable and inventory may not be completely offset by increases in accounts payable and accrued liabilities, which could impact our working capital balances.

If our available cash, cash equivalents, restricted cash and marketable securities and anticipated cash flows from operations are insufficient to satisfy our liquidity requirements because of lower demand for our products as a result of lower than currently expected rates of reimbursement from our customers or other risks described in this Quarterly Report on Form 10-Q and in our Form 10-K for the year ended December 31, 2025, we may seek to sell additional common or preferred equity or convertible debt securities, enter into a credit facility or another form of third-party funding or seek other debt financing. The sale of equity and convertible debt securities may result in dilution to our stockholders and, in the case of preferred equity securities or 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. If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our platform technologies or products or grant licenses on terms that are not favorable to us. Additional capital may not be available to us on reasonable terms, or at all. See Note 7, Debt, and Note 10, Common Stock, to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on our convertible senior notes and common stock.

Cash flows

The following table summarizes our cash flows for the periods presented:

Operating activities

Cash used in operating activities during the three months ended March 31, 2026, was $65.6 million, which resulted from a net loss of $112.1 million, and changes in our operating assets and liabilities of $23.3 million, partially offset by reconciliation adjustments of $69.7 million. Reconciliation adjustments primarily consisted of $47.6 million of stock-based compensation, $11.8 million of interest income received on marketable securities, $9.4 million of depreciation and amortization, $8.6 million of operating lease costs, partially offset by $7.0 million of amortization of discount on marketable securities. The changes in our operating assets and liabilities were primarily the result of a $8.6 million payment of operating lease liabilities net of receipt of tenant improvement allowance, a $8.2 million decrease in accounts payable and accrued liabilities, a $7.2 million increase in prepaid expenses and other current assets, net, and a $3.2 million decrease in deferred revenue.

Cash used in operating activities during the three months ended March 31, 2025, was $62.7 million, which resulted from a net loss of $95.2 million, and changes in our operating assets and liabilities of $23.3 million, partially offset by reconciliation adjustments of $55.8 million. Reconciliation adjustments primarily consisted of $37.8 million of stock-based compensation, $10.2 million of depreciation and amortization, $7.9 million of operating lease costs, $7.7 million of interest income received on marketable securities, and $5.0 million of impairment on non-marketable equity security investments, partially offset by $13.7 million of gain on extinguishment of convertible notes. The changes in our operating assets and liabilities were primarily the result of a $9.6 million payment of operating lease liabilities net of receipt of tenant improvement allowance, a $6.2 million increase in inventory, net, a $6.1 million increase in accounts receivable, net, and a $3.1 million increase in prepaid expenses and other current assets, net, partially offset by a $2.4 million increase in deferred revenue.

Investing activities

Cash provided by investing activities during the three months ended March 31, 2026, was $699.4 million, which resulted primarily from proceeds from marketable securities of $954.9 million, partially offset by purchases of marketable securities of $249.9 million, and purchases of property and equipment of $5.6 million.

Cash provided by investing activities during the three months ended March 31, 2025, was $302.9 million, which resulted primarily from proceeds from marketable securities of $307.3 million, partially offset by purchases of property and equipment of $4.5 million.

Financing activities

Cash used in financing activities during the three months ended March 31, 2026, was $21.6 million, which was primarily attributable to employee taxes paid related to net share settlement of restricted stock units of $20.7 million, partially offset by proceeds from exercise of stock options of $3.7 million.

Cash used in financing activities during the three months ended March 31, 2025, was $66.9 million, which was primarily attributable to repurchase of treasury stock of $45.0 million, employee taxes paid related to net share settlement of restricted stock units of $15.5 million, and payment of debt issuance costs of $12.1 million, partially offset by proceeds from unwinding of convertible note hedges of $5.0 million.

Critical accounting policies and estimates

We have prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. Our preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, expenses and related disclosures at the date of the consolidated financial statements, as well as revenue and expenses recorded during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are described in more detail in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those discussed previously.

Recent accounting pronouncements

See Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.