ORASURE TECHNOLOGIES INC

Previous wording

In the third quarter of 2024, the Company announced the discontinuance of sales of its risk assessment product line which was expected to be completed in the second quarter of 2025. Sales of its risk assessment products contributed $1.4 million and $2.1 million to revenues during the three months ended March 31, 2025 and 2024, respectively. During the first quarter of 2025, the Company sold certain assets that made up the risk assessment product line including certain intellectual property, contracts, permits, and equipment.

Current wording

In the third quarter of 2024, the Company announced the discontinuance of sales of its risk assessment product line which was completed in the second quarter of 2025. Sales of its risk assessment products contributed $0.4 million and $2.3 million to revenues during the three months ended June 30, 2025 and 2024, respectively. Sales of its risk assessment products contributed $1.9 million and $4.4 million to revenues during the six months ended June 30, 2025 and 2024, respectively. During the first quarter of 2025, the Company sold certain assets that made up the risk assessment product line including certain intellectual property, contracts, permits, and equipment.

Previous wording

(1)Includes HIV, HCV and Syphilis product revenues.

Current wording

(1)Includes HIV, HCV, Syphilis, and SureQuick® product revenues.

Previous wording

Sales of the Company's Diagnostics products increased 8% to $17.7 million for the three months ended March 31, 2025 from $16.4 million for the three months ended March 31, 2024. This increase in revenues is largely due to higher international HIV and HCV revenues of approximately $1.2 million primarily driven by customer ordering patterns. Sales of a syphilis product, which were first sold in the second quarter of 2024 are also partially responsible for the increase. This increase in revenues was offset by decrease in revenues under the CDC "Together Take me Home," HIV self-test program.

Current wording

Sales of the Company's Diagnostics products increased 3% to $19.2 million for the three months ended June 30, 2025 from $18.7 million for the three months ended June 30, 2024. This increase in revenues is largely due to higher international HIV revenues of approximately $1.3 million primarily driven by customer ordering patterns. Sales of a syphilis product, which were first sold in the second quarter of 2024 are also partially responsible for the increase. This increase in revenues was partially offset by decrease in domestic revenues of the Company's HIV product and a decline in international HCV revenues.

Previous wording

Risk assessment revenue decreased 32% to $1.4 million for the three months ended March 31, 2025 from $2.1 million for the three months ended March 31, 2024. The Company discontinued this line of business at the end of 2024 and business is winding down in early 2025.

Current wording

Risk assessment revenue decreased 81% to $0.4 million for the three months ended June 30, 2025 from $2.3 million for the three months ended June 30, 2024. The Company discontinued this line of business at the end of 2024 and business is winding down in early 2025.

Previous wording

COVID-19 Diagnostics revenues decreased 98% to $0.5 million for the three months ended March 31, 2025 compared to $23.1 million for the three months ended March 31, 2024 due to decreased sales of the Company's InteliSwab® tests through its U.S. government procurement contracts. We expect this decline in revenue to continue throughout the remainder of 2025 and for the foreseeable future due to the fulfillment of these contracts and lower overall demand for COVID-19 testing.

Current wording

COVID-19 Diagnostics revenues decreased 100% to $0.03 million for the three months ended June 30, 2025 compared to $18.9 million for the three months ended June 30, 2024 due to decreased sales of the Company's InteliSwab® tests through its U.S. government procurement contracts. We expect this level of revenue to continue throughout the remainder of 2025 and for the foreseeable future due to the fulfillment of these contracts and lower overall demand for COVID-19 testing.

Previous wording

Molecular Services revenues, which are derived from the Company's microbiome molecular sequencing services, were zero during the three months ended March 31, 2025 compared to $0.9 million during the three months ended March 31, 2024. The decrease in services revenues was due to the Company's decision to exit this line of business in 2024.

Current wording

Molecular Services revenues, which are derived from the Company's microbiome molecular sequencing services, were zero during the three months ended June 30, 2025 compared to $0.8 million during the three months ended June 30, 2024. The decrease in services revenues was due to the Company's decision to exit this line of business in 2024.

Previous wording

Non-product and services revenues increased 165% to $0.9 million for the three months ended March 31, 2025 from $0.4 million for the three months ended March 31, 2024 primarily due to the recognition of revenue under funded R&D contracts that were assumed by the Company as a result of the Sherlock acquisition at the end of 2024.

Current wording

Non-product and services revenues increased 261% to $1.4 million for the three months ended June 30, 2025 from $0.4 million for the three months ended June 30, 2024 primarily due to the recognition of revenue under funded R&D contracts that were assumed by the Company as a result of the Sherlock acquisition at the end of 2024.

Previous wording

Consolidated gross profit margin decreased to 41.1% for the three months ended March 31, 2025 from 44.5% for the three months ended March 31, 2024. The largest driver of the margin decline was driven by product mix of lower volume InteliSwab® sales that generate higher gross margins. Gross margin was also negatively impacted by the decrease in genomics sales that also generate higher gross margin coupled with increased international product sales which generate lower margins. This negative impact to gross margin was offset by improved overhead absorption and the termination of the microbiome molecular sequencing services business which historically dragged down the gross margin rate.

Current wording

Consolidated gross profit margin decreased to 42.1% for the three months ended June 30, 2025 from 45.4% for the three months ended June 30, 2024. The largest driver of the margin decline was a negative product mix driven by lower InteliSwab® sales that generate higher gross margins, lower genomics sales that also generate higher gross margins, and higher international product sales which generate lower margins. The termination of the microbiome molecular sequencing services business which historically dragged down the gross margin rate helped to improve the gross margin rate during the quarter. Higher scrap expense also contributed to the lower margins in the quarter but was partially offset by improved overhead absorption as the Company brings more production in-house to its Opus Way facility.

Previous wording

Consolidated operating loss for the three months ended March 31, 2025 was $17.8 million, a $10.7 million decline from the operating loss reported for the three months ended March 31, 2024. The increase in the operating loss reported in the first quarter of 2025 was largely a result of the lower revenues and lower gross margins generated on sales of the Company's products during the three months ended March 31, 2025.

Current wording

Consolidated operating loss for the three months ended June 30, 2025 was $18.0 million, a $15.3 million increase from the operating loss reported for the three months ended June 30, 2024. The increase in the operating loss reported in the second quarter of 2025 was largely a result of the lower revenues and lower gross margins generated on sales of the Company's products during the three months ended June 30, 2025 coupled with the increase spend on clinical trials. Results for the three months ended June 30, 2025 included change in the estimated fair value of acquisition-related contingent consideration of $0.7 million.

Previous wording

Research and development expenses increased 24% to $9.6 million for the three months ended March 31, 2025 from $7.7 million for the three months ended March 31, 2024 largely due the additional R&D spend incurred by the newly acquired Sherlock companies.

Current wording

Research and development expenses increased 73% to $11.4 million for the three months ended June 30, 2025 from $6.6 million for the three months ended June 30, 2024 largely due to higher spend incurred for clinical trials associated with the Chlamydia Trachomatis (CT) and Neisseria Gonorrhoeae (NG) device and additional R&D expense layered in from the newly acquired Sherlock companies.

Previous wording

Sales and marketing expenses decreased 19% to $6.9 million for the three months ended March 31, 2025 from $8.4 million for the three months ended March 31, 2024 due to lower spend on consulting fees and lower employee costs associated with a decrease in headcount.

Current wording

Sales and marketing expenses decreased 20% to $6.4 million for the three months ended June 30, 2025 from $7.9 million for the three months ended June 30, 2024 due to decreased bad debt expense, lower employee costs associated with a decrease in headcount and a decrease in consulting costs.

Previous wording

During the first quarter of 2025, the Company recorded a non-cash adjustment of $0.5 million, reflecting the change in the estimated fair value of the Sherlock acquisition-related contingent consideration. The Sherlock acquisition was completed in December 2024 and there is no comparable amount in the first quarter of 2024.

Current wording

During the three months ended June 30, 2025, the Company recorded a non-cash adjustment of $0.7 million, reflecting the change in the estimated fair value of the Sherlock acquisition-related contingent consideration. The Sherlock acquisition was completed in December 2024 and there is no comparable amount in the first quarter of 2024.

Previous wording

All of the above contributed to the Company's operating loss of $17.8 million for the three months ended March 31, 2025, which included non-cash charges of $2.8 million for depreciation and amortization, and non-cash charges of $2.7 million for stock-based compensation. The Company's operating loss of $7.1 million for the three months ended March 31, 2024 included a non-cash impairment charge of $3.3 million, non-cash charges of $2.7 million for depreciation and amortization, and $3.0 million for stock-based compensation.

Current wording

All of the above contributed to the Company's operating loss of $18.0 million for the three months ended June 30, 2025, which included non-cash charges of $3.2 million for stock-based compensation, $2.5 million for depreciation and amortization, and $0.7 million of change in the estimated fair value of acquisition-related contingent consideration. The Company's operating loss of $2.7 million for the three months ended June 30, 2024 included a non-cash impairment charge of $1.1 million, non-cash charges of $2.6 million for depreciation and amortization, and $3.3 million for stock-based compensation.

Previous wording

Other income for the three months ended March 31, 2025 was $1.8 million compared to $3.5 million for the three months ended March 31, 2024 due to lower interest income and foreign currency gains.

Current wording

Other income for the three months ended June 30, 2025 was $1.1 million compared to $3.1 million for the three months ended June 30, 2024 due to lower interest income and higher foreign currency losses.

Previous wording

The Company continues to believe the full valuation allowance established against its total U.S. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed. For the three months ended March 31, 2025 and 2024, the Company recorded an income tax benefit of $0.5 million and $0.02 million, respectively. The increase in the income tax benefit is largely due to a higher foreign income tax benefit as a result of higher projected foreign losses.

Current wording

The Company continues to believe the full valuation allowance established against its total U.S. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed. For the three months ended June 30, 2025 and 2024, the Company recorded income tax expense of $2.0 million and $0.4 million, respectively. The increase in the income tax expense is largely due to recording an uncertain tax position for certain tax matters, including penalties and interest.

Previous wording

Consolidated net revenues decreased 45% to $29.9 million for the three months ended March 31, 2025 from $54.1 million for the three months ended March 31, 2024.

Current wording

Consolidated net product and services revenues decreased 45% to $58.8 million for the six months ended June 30, 2025 from $107.7 million for the six months ended June 30, 2024.

Previous wording

Sample Management Solutions revenues decreased 16% to $9.1 million for the three months ended March 31, 2025 from $10.8 million for the three months ended March 31, 2024. Sales of the Company's genomics products are being impacted by customer bankruptcy and economic pressures.

Current wording

Sample Management Solutions revenues decreased 19% to $19.0 million for the six months ended June 30, 2025 from $23.4 million for the six months ended June 30, 2024. Sales of the Company's Sample Management Solutions Products are being impacted by customer bankruptcy and economic pressures.

Previous wording

General and administrative expenses increased 21% to $14.1 million for the three months ended March 31, 2025 from $11.6 million for the three months ended March 31, 2024 largely due an increase in legal fees and the additional general and administrative costs associated with the newly acquired Sherlock companies.

Current wording

General and administrative expenses increased 14% to $26.8 million for the six months ended June 30, 2025 from $23.5 million for the six months ended June 30, 2024 largely due an increase in legal and accounting fees and the additional general and administrative costs associated with the newly acquired Sherlock companies.

Previous wording

The Company's cash and cash equivalents decreased to $247.6 million at March 31, 2025 from $267.8 million at December 31, 2024. The Company's Canadian subsidiary, DNAG, held $82.5 million or 33% of the $247.6 million in cash and cash equivalents.

Current wording

The Company's cash and cash equivalents decreased to $234.6 million at June 30, 2025 from $267.8 million at December 31, 2024. The Company's Canadian subsidiary, DNAG, held $85.1 million or 36% of the $234.6 million in cash and cash equivalents.

Previous wording

The Company's working capital decreased to $288.4 million at March 31, 2025 from $299.7 million at December 31, 2024.

Current wording

The Company's working capital decreased to $259.1 million at June 30, 2025 from $299.7 million at December 31, 2024.

Previous wording

During the three months ended March 31, 2025, net cash used in operating activities was $19.7 million. Cash flows from operations can be significantly impacted by factors such as timing of receipt from customers, inventory purchases, and payments to vendors. The Company's net loss of $16.0 million included non-cash charges of depreciation and amortization expense of $2.8 million, stock-based compensation expense of $2.7 million, and other non-cash income of $0.3 million mostly consisting of a gain on the sale of assets offset by the non-cash adjustment to the contingent consideration liabilities. Cash used by the working capital accounts included an increase in inventory of $1.5 million due to the lower revenues and reduced shipments, an increase in prepaid expense and other current assets of $2.1 million due to foreign tax installment payments, and a decrease in accrued expenses of $6.6 million as the Company paid out year-end bonuses in March 2025. Cash provided by the working capital accounts included an decrease in accounts receivable of $2.4 million largely associated with lower overall sales and collections of balances due.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities was $30.0 million. Cash flows from operations can be significantly impacted by factors such as timing of receipt from customers, inventory purchases, and payments to vendors. The Company's net loss of $35.7 million included non-cash charges of stock-based compensation expense of $5.9 million and depreciation and amortization expense of $5.3 million, and other net non-cash losses of $1.0 million mostly consisting of the non-cash adjustment to the contingent consideration liabilities and the loss on equity investment. Cash used by the working capital accounts included a decrease in accrued expenses of $3.1 million largely consisting of the payment of year-end bonuses in March 2025, an increase in accounts receivable of $1.6 million largely due to timing of shipments at the end of the quarter, and a decrease in accounts payable of $1.5 million. Cash provided by working capital accounts included a decrease in inventory of $1.0 million due to the lower revenues.

Previous wording

Net cash provided by investing activities was $0.4 million for the three months ended March 31, 2025, which was due to proceeds from sale of property and equipment offset by the acquisition of new property and equipment.

Current wording

Net cash used in investing activities was $1.6 million for the six months ended June 30, 2025, associated with proceeds from sale of property and equipment offset by the acquisition of new property and equipment.

Previous wording

Net cash used in financing activities was $1.0 million for the three months ended March 31, 2025, which was largely comprised of $0.9 million used for the repurchase of common stock to satisfy withholding taxes related to the vesting of restricted shares awarded to the Company's employees.

Current wording

Net cash used in financing activities was $6.8 million for the six months ended June 30, 2025, which was largely comprised of $5.0 million of repurchase of common stock and $1.7 million used for the repurchase of common stock to satisfy withholding taxes related to the vesting of restricted shares awarded to the Company's employees.

Previous wording

A more detailed review of the Company's critical accounting policies is contained in its Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. No material changes have been made to such critical accounting policies during the three months ended March 31, 2025.

Current wording

A more detailed review of the Company's critical accounting policies is contained in its Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. No material changes have been made to such critical accounting policies during the six months ended June 30, 2025.