CASTLE BIOSCIENCES INC

Previous wording

Our revenue is primarily generated by our DecisionDx-Melanoma risk stratification test for cutaneous melanoma (“CM”) and our TissueCypher risk stratification test for BE which is supplemented by revenue generated from our DecisionDx-UM risk stratification test for UM.

Current wording

Our revenue is primarily generated by our DecisionDx-Melanoma risk stratification test for cutaneous melanoma (“CM”) and our TissueCypher risk stratification test for BE.

Previous wording

For the three months ended March 31, 2026, our test report volume increased by 10% compared to the same period in 2025. Our dermatologic test report volume increased by 6% for the three months ended March 31, 2026 compared to the prior period in 2025, largely driven by continued growth from our DecisionDx-Melanoma test. TissueCypher increased by 58% for the three months ended March 31, 2026, compared to the prior period in 2025, further contributing to the overall volume increase. For a discussion of how we recognize revenue derived from our tests, refer to “Components of Results of Operations—Net Revenues” below.

Current wording

For the three and six months ended June 30, 2026, our test report volume increased by 16% and 13%, respectively, compared to the same periods in 2025. The increase primarily reflects continued growth in our core revenue drivers, TissueCypher and DecisionDx-Melanoma. TissueCypher test report volume increased by 63% and 61% for the three and six months ended June 30, 2026, respectively, reflecting continued commercial adoption. We continue to invest in expanding our Pittsburgh laboratory operations to increase TissueCypher testing capacity and support future growth. DecisionDx-Melanoma test report volume increased by 3% and 9% for the three and six months ended June 30, 2026, respectively. Dermatologic test report volume decreased by 4% for the three months June 30, 2026 but increased by 1% for the six months ended June 30, 2026, primarily reflecting lower DecisionDx-SCC test report volume, partially offset by continued growth in DecisionDx-Melanoma. For a discussion of how we recognize revenue derived from our tests, refer to “Components of Results of Operations—Net Revenues” below.

Previous wording

For our AdvanceAD-Tx product line, we received approximately 650 orders during the three months ended March 31, 2026, while still in the initial limited access phase. We believe early adoption reflects clinician interest in integrating AdvanceAD-Tx into existing AD treatment pathways. We plan to expand availability in a phased manner throughout the remainder of 2026.

Current wording

For our AdvanceAD-Tx product line, we received approximately 1,000 and 1,650 orders during the three and six months ended June 30, 2026, respectively, while still in the initial limited access phase. We believe early adoption reflects clinician interest in integrating AdvanceAD-Tx into existing AD treatment pathways. We plan to expand availability in a phased manner throughout the remainder of 2026.

Previous wording

For our DecisionDx-SCC product line, we continue to see opportunities for leverage, where many of the clinicians ordering our DecisionDx-Melanoma are the same clinicians who order our DecisionDx-SCC test. During the three months ended March 31, 2026, approximately 54% of all clinicians ordering DecisionDx-SCC had also ordered our DecisionDx-Melanoma test during that same period.

Current wording

For our DecisionDx-SCC product line, we continue to see opportunities for leverage, where many of the clinicians ordering our DecisionDx-Melanoma are the same clinicians who order our DecisionDx-SCC test. During the six months ended June 30, 2026, approximately 68% of all clinicians ordering DecisionDx-SCC had also ordered our DecisionDx-Melanoma test during that same period.

Previous wording

Macroeconomic conditions, including uncertainties associated with the ongoing conflicts in the Middle East, including the conflict between the U.S. and Iran, the ongoing conflict between Ukraine and Russia and related sanctions, economic slowdowns, the recent shutdown of the federal government including regulatory agencies, public health crises, labor shortages, recessions or market corrections, supply chain disruptions, inflation and monetary policy shifts, current or proposed international tariffs, trade restrictions and retaliatory trade measures, cybersecurity threats, liquidity concerns at, and potential failures of, banks and other financial institutions or other disruptions in the banking system or financing markets, higher interest rates and financial and credit market fluctuations, volatility in the capital markets and other evolving macroeconomic developments, continue to have direct and indirect impacts on our business and could in the future materially impact our results of operations and financial condition. We continue to actively monitor the impact of these macroeconomic factors on our results of operations, financial condition and cash flows. The extent of the impact of these factors on our operational performance and financial condition, including our ability to execute our business strategies and initiatives in the expected timeframe, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact our business.

Current wording

Macroeconomic conditions, including uncertainties associated with the ongoing conflicts in the Middle East, including the conflict between the U.S., Iran, and Israel, the ongoing conflict between Ukraine and Russia and related sanctions, economic slowdowns, recent shutdowns of the federal government including regulatory agencies, public health crises, labor shortages, recessions or market corrections, supply chain disruptions, inflation and monetary policy shifts, current or proposed international tariffs, trade restrictions and retaliatory trade measures, cybersecurity threats, liquidity concerns at, and potential failures of, banks and other financial institutions or other disruptions in the banking system or financing markets, higher interest rates and financial and credit market fluctuations, volatility in the capital markets and other evolving macroeconomic developments, continue to have direct and indirect impacts on our business and could in the future materially impact our results of operations and financial condition. We continue to actively monitor the impact of these macroeconomic factors on our results of operations, financial condition and cash flows. The extent of the impact of these factors on our operational performance and financial condition, including our ability to execute our business strategies and initiatives in the expected timeframe, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact our business.

Previous wording

We generate revenues from the sale of our products. Currently, our revenues are primarily derived from the sale of DecisionDx-Melanoma, TissueCypher and DecisionDx-UM. We bill third-party payors and patients for the tests we perform.

Current wording

We generate revenues from the sale of our products. Currently, our revenues are primarily derived from the sale of TissueCypher, DecisionDx-Melanoma and DecisionDx-SCC. We bill third-party payors and patients for the tests we perform.

Previous wording

Gross margin and gross margin percentage are key indicators we use to assess our business. See the table in “Results of Operations—Comparison of the Three Months Ended March 31, 2026 and 2025” for details.

Current wording

Gross margin and gross margin percentage are key indicators we use to assess our business. See the table in “Results of Operations—Comparison of the Six Months Ended June 30, 2026 and 2025” for details.

Previous wording

Net gains (losses) on equity securities are primarily attributable to realized and unrealized gains and losses on our equity securities which we present as marketable investment securities.

Current wording

Net (losses) gains on equity securities are primarily attributable to realized and unrealized gains and losses on our equity securities which we present as marketable investment securities.

Previous wording

Income tax expense consists primarily of income taxes related to federal and state jurisdictions in which we conduct business. Income tax benefit is primarily due to the revised estimated useful life of our intangible asset related to the discontinuation of our IDgenetix test offering in May 2025, which resulted in a temporary difference and a corresponding deferred tax asset. We maintain a full valuation allowance for deferred tax assets including operating loss carryforwards and R&D credits and other tax credits.

Current wording

Income tax expense consists primarily of income taxes related to federal and state jurisdictions in which we conduct business. We maintain a full valuation allowance for deferred tax assets including operating loss carryforwards and R&D credits and other tax credits.

Previous wording

Net revenues for the three months ended March 31, 2026 decreased by $4.3 million, or 4.9%, to $83.7 million compared to the three months ended March 31, 2025, due toa $21.9 million decrease in revenues from our dermatologic tests, partially offset by a $17.5 million increase in revenues from our non-dermatologic tests.

Current wording

Net revenues for the three months ended June 30, 2026 increased by $17.4 million, or 20.1%, to $103.5 million compared to the three months ended June 30, 2025, primarily driven by a $25.0 million increase in revenue from our non-dermatologic tests, partially offset by a $7.6 million decrease in revenue from our dermatologic tests.

Previous wording

Income tax expense was$0.1 million for thethree months ended March 31, 2026 and primarily consisted of income taxes related to federal and state jurisdictions in which we conduct business. Our income tax benefit was $0.4 million for thethree months ended March 31, 2025, primarily driven by the revision of the estimated useful life of an intangible asset and our net operating loss position during the period.

Current wording

Our income tax expense of $0.4 million for thethree months ended June 30, 2026 consisted of income taxes related to state jurisdictions in which we conduct business. Our income tax benefit for the three months ended June 30, 2025 was $4.7 million primarily due to a reduction of the valuation allowance previously recorded against our federal deferred tax assets. The release resulted in a credit to income tax expense and was based on new deferred tax liabilities recognized upon consolidating Capsulomics.

Previous wording

The $17.5 million increase in revenues from our non-dermatologic tests was largely attributable to a 58% increase in test report volumes for our TissueCypher test, and, to a much lesser extent, a higher realized ASP. The increase in TissueCypher test report volumes reflects growth driven by our sales force efforts. Net revenues from our non-dermatologic tests as a percentage of total net revenues increased from 28.4% for the three months ended March 31, 2025 to 50.9% for the three months ended March 31, 2026.

Current wording

The $42.5 million increase in revenues from our non-dermatologic tests was primarily attributable to a 61% increase in test report volumes for our TissueCypher test, and, to a much lesser extent, a higher realized ASP. The increase in TissueCypher test report volumes reflects continued growth driven by our sales force efforts. Net revenues from our non-dermatologic tests as a percentage of total net revenues increased from 31.5% for the six months ended June 30, 2025 to 52.0% for the six months ended June 30, 2026.

Previous wording

The $21.9 million decrease in revenues from our dermatologic tests was primarily due to the loss of Medicare coverage for our DecisionDx-SCC test effective April 24, 2025, partially offset by an increase in DecisionDx-Melanoma revenues, which was primarily driven by a 16% increase in test report volumes and, to a lesser extent, a higher realized average selling price (“ASP”).

Current wording

The $29.5 million decrease in revenues from our dermatologic tests was primarily attributable to our DecisionDx-SCC test, driven by lower realized ASP and lower test report volumes following the loss of Medicare coverage effective April 24, 2025. The decrease was partially offset by higher DecisionDx-Melanoma revenues, which were primarily driven by a 9% increase in test report volumes and, to a lesser extent, a higher realized ASP.

Previous wording

Cost of sales (exclusive of amortization of acquired intangible assets) for the three months ended March 31, 2026 increased by $4.2 million, or 25.3%, compared to the three months ended March 31, 2025, primarily due to higher expenses for lab supplies, higher lab services cost, higher personnel costs, and higher depreciation expense. The increase in expenses for lab supplies and lab services expense was driven by higher test report volumes. Increases in personnel costs reflect a higher headcount, due to additions made to support business growth in response to growing test report volumes, as well as merit and annual inflationary wage adjustment for existing employees. The higher depreciation expense reflects continued investment in and expansion of our laboratory facilities.

Current wording

Cost of sales (exclusive of amortization of acquired intangible assets) for the six months ended June 30, 2026 increased by $10.2 million, or 30.1%, compared to the six months ended June 30, 2025, primarily due to higher expenses for lab supplies, higher personnel costs, higher lab services costs, and higher depreciation expense. The increase in expenses for lab supplies and lab services costs was driven by higher test report volumes reflecting the shift in the mix of reports issued. Increases in personnel costs reflect a higher headcount, due to additions made to support business growth in response to growing test report volumes, as well as merit and annual inflationary wage adjustment for existing employees. The higher depreciation expense reflects continued investment in and expansion of our laboratory facilities.

Previous wording

Due to the nature of our business, a significant portion of our cost of sales expenses represents fixed costs associated with our testing operations. Accordingly, our cost of sales expense will not necessarily increase or decrease commensurately with the change in net revenues from period to period. We expect our cost of sales expenses (exclusive of amortization of acquired intangible assets) to continue to increase in future periods as we hire additional laboratory personnel and related resources to support our expected operational growth and higher test volumes.

Current wording

Due to the nature of our business, a significant portion of our cost of sales expenses represents fixed costs associated with our testing operations. Accordingly, our cost of sales expenses will not necessarily increase or decrease commensurately with the change in net revenues from period to period. We expect our cost of sales expenses (exclusive of amortization of acquired intangible assets) to continue to increase in future periods as we hire additional laboratory personnel and related resources to support our expected operational growth and higher test volumes.

Previous wording

Our gross margin percentage was 72.8% for the three months ended March 31, 2026, compared to 49.2% for the three months ended March 31, 2025. The increase was primarily driven by significantly lower amortization of acquired intangible assets. Amortization expense was elevated in the prior-year period due to accelerated amortization related to the IDgenetix test, which was fully amortized as of March 31, 2025 following the decision to discontinue IDgenetix, resulting in no amortization expense associated with this asset in the current period.

Current wording

Our gross margin percentage was 74.0% for the six months ended June 30, 2026, compared to 63.1% for the six months ended June 30, 2025. The increase was primarily driven by significantly lower amortization of acquired intangible assets. Amortization expense was elevated in the prior-year period due to accelerated amortization related to the IDgenetix test, which was fully amortized as of March 31, 2025 following the decision to discontinue IDgenetix, resulting in no amortization expense associated with this asset in the current period.

Previous wording

R&D expenses increased by $1.8 million, or 14.6%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to higher personnel costs and higher clinical studies costs. The increases in personnel costs reflect a higher headcount to support continued business growth and increases in clinical studies costs reflect investment in our pipeline products.

Current wording

R&D expenses increased by $3.6 million, or 14.2%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to higher personnel costs and higher clinical studies costs. The increases in personnel costs reflect a higher headcount to support continued business growth and increases in clinical studies costs reflect investment in our pipeline products.

Previous wording

Sales and marketing expenses increased by $4.2 million, or 11.5%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase is primarily due to higher personnel costs and higher sales related travel expenses. Increases in personnel costs reflect a higher headcount driven by sales force expansion as well as merit and annual inflationary wage adjustment for existing employees. Higher sales related travel expenses reflect increased field activity to support growing test report volumes. Stock-based compensation expense included in sales and marketing expense was $3.5 million for the three months ended March 31, 2026, compared to $4.0 million for the three months ended March 31, 2025.

Current wording

Sales and marketing expenses increased by $10.0 million, or 13.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase is primarily due to higher personnel costs and higher sales related travel expenses. Increases in personnel costs reflect a higher headcount driven by sales force expansion as well as merit and annual inflationary wage adjustment for existing employees. Higher sales related travel expenses reflect increased field activity to support growing test report volumes. Stock-based compensation expense included in sales and marketing expense was $7.4 million for the six months ended June 30, 2026, compared to $7.9 million for the six months ended June 30, 2025.

Previous wording

General and administrative expenses increased by $2.1 million, or 9.4%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase is primarily due to higher personnel costs, higher information technology-related costs, and higher travel costs partially offset by a decrease in professional fees. Increases in personnel costs reflect headcount expansions in our administrative support functions as well as merit and annual inflationary wage adjustment for existing employees. Stock-based compensation expense included in general and administrative expense was $3.6 million for the three months ended March 31, 2026, compared to $3.8 million for the three months ended March 31, 2025.

Current wording

General and administrative expenses increased by $4.3 million, or 9.6%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase is primarily due to higher personnel costs and higher information technology-related costs partially offset by a decrease in professional fees. Increases in personnel costs reflect headcount expansions in our administrative functions as well as merit and annual inflationary wage adjustment for existing employees. Stock-based compensation expense included in general and administrative expense was $8.2 million for the six months ended June 30, 2026, compared to $7.0 million for the six months ended June 30, 2025.

Previous wording

Amortization decreased by approximately $26.1 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to our decision to discontinue the IDgenetix test offering beginning in May 2025. As a result of this decision, we revised the estimated useful life of the related developed technology intangible asset and fully amortized the remaining carrying value as of March 31, 2025. The decrease is partially offset by amortization of the developed technology intangible asset recognized in association with the Esopredict test following our acquisition of Previse in May 2025.

Current wording

Amortization expense decreased by approximately $25.8 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to our decision to discontinue the IDgenetix test offering beginning in May 2025. As a result of this decision, we revised the estimated useful life of the related developed technology intangible asset and fully amortized the remaining carrying value as of March 31, 2025. The decrease is partially offset by amortization of the developed technology intangible asset recognized in association with the Esopredict test following our acquisition of Previse in May 2025.

Previous wording

Net gains (losses) on equity securities increased by $3.4 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily driven by unrealized gains on equity securities, including our investment in SciBase, partially offset by unrealized and realized losses on other equity securities.

Current wording

Net gains (losses) on equity securities increased by $1.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by unrealized gains on our investment in SciBase, partially offset by realized losses on other equity securities sold during the period.

Previous wording

Other loss increased by$0.4 millionfor thethree months ended March 31, 2026, compared to thethree months ended March 31, 2025, primarily dueto unrealized foreign currency losses on foreign currency-denominated assets. There were no comparable losses in the prior-year period.

Current wording

Other loss increased by$0.6 millionfor thesix months ended June 30, 2026, compared to thesix months ended June 30, 2025, primarily dueto unrealized foreign currency losses on foreign currency-denominated assets. There were no comparable losses in the prior-year period.

Previous wording

Stock-based compensation expense, which is allocated among cost of sales, R&D expense and SG&A expense, totaled $9.8 million for the three months ended March 31, 2026, compared to $11.2 million for the three months ended March 31, 2025. The decrease was primarily attributable to higher fair value awards granted in prior periods having substantially vested, resulting in a lower mix of higher fair value awards in the current period.

Current wording

Stock-based compensation expense, which is allocated among cost of sales, R&D expense and SG&A expense, totaled $21.4 million for the six months ended June 30, 2026, compared to $22.4 million for the six months ended June 30, 2025. The decrease was primarily attributable to higher fair value awards granted in prior periods having substantially vested, resulting in a lower mix of higher fair value awards in the current period.

Previous wording

We expect stock-based compensation expense will continue to be material in future periods, attributable to both existing awards outstanding and anticipated additional grants to our current and future employees. As of March 31, 2026, we had 942 employees compared to 784 as of March 31, 2025. As of March 31, 2026, the total unrecognized stock-based compensation cost related to outstanding awards was $94.5 million, which is expected to be recognized over a weighted-average period of 2.8 years.

Current wording

We expect stock-based compensation expense will continue to be material in future periods, attributable to both existing awards outstanding and anticipated additional grants to our current and future employees. As of June 30, 2026, we had 1,002 employees compared to 798 as of June 30, 2025. As of June 30, 2026, the total unrecognized stock-based compensation cost related to outstanding awards was $90.4 million, which is expected to be recognized over a weighted-average period of 2.7 years.

Previous wording

Our principal sources of liquidity are our cash and cash equivalents, marketable investment securities and cash generated from the sale of our products. All of our marketable investment securities are considered investment grade and are readily available for use in current operations. As of March 31, 2026 and December 31, 2025, we had marketable investment securities of $197.9 million and $182.8 million, respectively. Additionally, as of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $63.8 million and $116.7 million, respectively.

Current wording

Our principal sources of liquidity are our cash and cash equivalents, marketable investment securities and cash generated from the sale of our products. All of our marketable investment securities are considered investment grade and are readily available for use in current operations. As of June 30, 2026 and December 31, 2025, we had marketable investment securities of $204.7 million and $182.8 million, respectively. Additionally, as of June 30, 2026 and December 31, 2025, we had cash and cash equivalents of $62.1 million and $116.7 million, respectively.

Previous wording

In February 2024, we purchased a plot of land in Friendswood, Texas and soon thereafter began development of the land and construction of a commercial office building which now serves as our corporate headquarters. Over the duration of this project, we incurred significant capital expenditures through payments to the developer under a percentage-of-completion basis. We completed the portions of the building that serves as our headquarters in February 2026, at which time we began occupying the building. During the three months ended March 31, 2026 and 2025, we incurred capital expenditures of $2.7 million and $5.1 million, respectively, related to this development project.

Current wording

In February 2024, we purchased a plot of land in Friendswood, Texas and soon thereafter began development of the land and construction of a commercial office building which now serves as our corporate headquarters. Over the duration of this project, we incurred significant capital expenditures through payments to the developer under a percentage-of-completion basis. We completed the portions of the building that serve as our headquarters in February 2026, at which time we began occupying the building. Capital expenditures related to this development project were $0.4 million and $3.1 million during the three and six months ended June 30, 2026, respectively, compared to $8.8 million and $14.0 million during the corresponding periods in 2025. As of June 30, 2026, the development project was substantially complete.

Previous wording

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate our exact working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of, many factors, including those listed above as well as those listed in Part I, Item 1A, “Risk Factors” in the 2025 10-K and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q and in our other filings with the SEC.

Current wording

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate our exact working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of, many factors, including those listed above as well as those listed in Part I, Item 1A, “Risk Factors” in the 2025 10-K, Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q and in our other filings with the SEC.

Previous wording

Total undiscounted future minimum payment obligations under our operating leases and finance leases as of March 31, 2026 totaled approximately $39.2 million, of which $1.9 million is payable through the remainder of 2026 and $37.3 million is payable through early 2037. The leases expire on various dates through 2037 and provide certain options to renew for additional periods. On March 19, 2026, we entered into a new lease agreement with an initial term of approximately 11 years for laboratory and office space located in Pittsburgh, Pennsylvania. As of March 31, 2026, the lease had not yet commenced. Upon commencement, we expect the leases to increase our undiscounted future minimum payment obligations by a total of approximately $7.7 million.

Current wording

Total undiscounted future minimum payment obligations under our operating leases and finance leases as of June 30, 2026 totaled approximately $38.6 million, of which $1.3 million is payable through the remainder of 2026 and $37.3 million is payable through early 2037. The leases expire on various dates through 2037 and provide certain options to renew for additional periods. On March 19, 2026, we entered into a new lease agreement with an initial term of approximately 11 years for laboratory and office space located in Pittsburgh, Pennsylvania. As of June 30, 2026, the lease had not yet commenced. Upon commencement, we expect the leases to increase our undiscounted future minimum payment obligations by a total of approximately $7.7 million.

Previous wording

Net cash used in operating activities was $22.1 million for the three months ended March 31, 2026. The net loss of $14.5 million includes non-cash charges of stock-based compensation expense of $9.8 million, depreciation and amortization of $3.9 million, offset by net gains on equity securities of $2.0 million. Cash used as a result of changes in operating assets and liabilities was $19.4 million, primarily due to decreases in accrued compensation of $19.2 million, increases in prepaid expenses and other current assets of $6.7 million, offset by increases in accounts payable of $3.2 million, increases in other accrued and current liabilities of $2.8 million and a decrease in accounts receivable of $1.1 million.

Current wording

Net cash used in operating activities was $6.9 million for the six months ended June 30, 2026. The net loss of $16.6 million includes non-cash charges of stock-based compensation expense of $21.4 million, depreciation and amortization of $8.0 million, offset by net gains on equity securities of $1.4 million. Cash used as a result of changes in operating assets and liabilities was $18.2 million, primarily due to decreases in accrued compensation of $11.4 million, increases in prepaid expenses and other current assets of $7.5 million, increases in accounts receivable of $4.7 million, offset by increases in other accrued and current liabilities of $5.3 million and increases in accounts payable of $0.9 million.

Previous wording

Net cash used in operating activities was $6.0 million for the three months ended March 31, 2025. The net loss of $25.8 million includes non-cash charges of depreciation and amortization of $29.8 million, stock-based compensation expense of $11.2 million, net losses on equity securities of $1.4 million and accretion of discounts on marketable investment securities of $1.4 million. Cash used as a result of changes in operating assets and liabilities was $20.4 million, primarily due to decreases in accrued compensation of $14.7 million, increases in accounts receivable of $5.2 million, increases in prepaid expenses and other current assets of $3.4 million, partially offset by decreases in inventory of $1.3 million and increases in other accrued and current liabilities of $1.1 million.

Current wording

Net cash provided by operating activities was $14.8 million for the six months ended June 30, 2025. The net loss of $21.3 million includes non-cash charges of depreciation and amortization of $33.2 million, stock-based compensation expense of $22.4 million, offset by deferred income taxes of $5.4 million and accretion of discounts on marketable investment securities of $2.6 million. Cash used as a result of changes in operating assets and liabilities was $11.9 million, primarily due to decreases in accrued compensation of $7.6 million, increases in prepaid expenses and other current assets of $4.7 million and increases in accounts receivable of $1.3 million, partially offset by decreases in account payable of $1.7 million.

Previous wording

The $16.1 million increase in net cash used in operating activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to increases in operating expenditures and the timing of working capital changes, including higher payments of annual bonuses and employee benefits. Cash used during the three months ended March 31, 2026 included $28.8 million of such payments, compared to $22.5 million in the prior-year period, and these payments are not expected to recur in the remainder of 2026.

Current wording

The $21.7 million increase in net cash used in operating activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to increases in operating expenditures and the timing of working capital changes, including higher payments of annual bonuses and employee benefits. Cash used during the six months ended June 30, 2026 included $28.8 million of such payments, compared to $22.5 million in the prior-year period, and these payments are not expected to recur in the remainder of 2026.

Previous wording

Net cash used in investing activities was $25.8 million for the three months ended March 31, 2026 and consisted primarily of purchases of marketable investment securities of $55.1 million, purchases of property and equipment of $12.5 million, partially offset by $39.1 million of proceeds from maturities of marketable investment securities, and $2.7 million of proceeds from the sale of equity securities.

Current wording

Net cash used in investing activities was $41.8 million for the six months ended June 30, 2026 and consisted primarily of purchases of marketable investment securities of $109.6 million, purchases of property and equipment of $21.1 million, partially offset by $80.1 million of proceeds from maturities of marketable investment securities, $5.6 million of proceeds from maturities of debt securities classified as held-to-maturity and $3.2 million of proceeds from the sale of equity securities.

Previous wording

Net cash used in investing activities was $22.4 million for the three months ended March 31, 2025 and consisted primarily of purchases of marketable investment securities of $48.4 million, purchases of debt securities classified as held-to-maturity of $5.6 million and purchases of property and equipment of $4.7 million, partially offset by $36.3 million of proceeds from maturities of marketable investment securities.

Current wording

Net cash used in investing activities was $50.8 million for the six months ended June 30, 2025 and consisted primarily of purchases of marketable investment securities of $92.8 million, our asset acquisition of Previse for $18.7 million, purchases of property and equipment of $14.0 million and purchases of debt securities classified as held-to-maturity of $5.6 million, partially offset by the maturity of marketable investment securities of $80.3 million.

Previous wording

The $3.4 million increase in cash used in investing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to $7.7 million of higher purchases of property and equipment and $6.7 million of higher purchases of marketable investment securities, partially offset by no purchases of debt securities classified as held-to-maturity, higher proceeds from maturities of marketable investment securities of $2.8 million, and proceeds from the sale of equity securities of $2.7 million.

Current wording

The $9.0 million decrease in cash used in investing activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily due to $18.7 million of acquisition related activity in the prior period with no comparable activity in the current period, $5.6 million of proceeds from held-to-maturity securities, offset by $16.8 million in higher purchases of marketable securities and $7.1 million of higher purchases of property and equipment.

Previous wording

Net cash used in financing activities was $5.0 million for the three months ended March 31, 2026, and consisted primarily of $6.6 million of payments for employee taxes related to the vesting of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”), partially offset by $1.3 million of proceeds from contributions to our 2019 Employee Stock Purchase Plan (the “ESPP”).

Current wording

Net cash used in financing activities was $5.9 million for the six months ended June 30, 2026, and consisted primarily of $7.4 million of payments for employee taxes related to the vesting of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) and $1.0 million of payments related to contingent consideration, partially offset by $2.1 million of proceeds from contributions to our 2019 Employee Stock Purchase Plan (the “ESPP”).

Previous wording

Net cash used in financing activities was $1.6 million for the three months ended March 31, 2025, and consisted primarily of $2.5 million of payments for employee taxes attributable to the vesting of RSUs, partially offset by the $1.0 million of proceeds from contributions to our ESPP.

Current wording

Net cash used in financing activities was $1.5 million for the six months ended June 30, 2025, and consisted primarily of the $3.1 million payment of employee taxes attributable to the vesting of RSUs, partially offset by the $1.5 million of proceeds from contributions to our ESPP and $0.2 million of proceeds from lease incentives received.

Previous wording

During the three months ended March 31, 2026, there were no significant changes to the information discussed under “Critical Accounting Estimates” included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our 2025 10-K.

Current wording

During the six months ended June 30, 2026, there were no significant changes to the information discussed under “Critical Accounting Estimates” included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our 2025 10-K.