GeneDx Holdings Corp.

Previous wording

We believe the number of resulted exome and genome tests in any period is important and useful to our investors because it directly correlates with long-term patient relationships and the size of our genomic database. During the three months ended March 31, 2026, we resulted 27,488 exome and genome tests, which represented 50% of all test results, compared to the three months ended March 31, 2025, in which we resulted approximately 20,562 exome and genome tests, which represented 40% of all test results.

Current wording

We believe the number of resulted exome and genome tests in any period is important and useful to our investors because it directly correlates with long-term patient relationships and the size of our genomic database. During the three months ended June 30, 2026, we resulted 30,785 exome and genome tests, which represented 49% of all test results, compared to the three months ended June 30, 2025, in which we resulted approximately 23,246 exome and genome tests, which represented 40% of all test results. During the six months ended June 30, 2026, we resulted 58,273 exome and genome tests, which represented 49% of all test results, compared to the six months ended June 30, 2025, in which we resulted approximately 43,808 exome and genome tests, which represented 40% of all test results.

Previous wording

In addition, with the acquisition of Fabric Genomics, we generate revenues through software and interpretation services related to rare disease, hereditary risk, and cancer testing. Our customers include clinical laboratories, hospitals, and research institutions. Our ability to increase this revenue will depend on our ability to expand our customer base among hospitals and genomic centers, along with increased adoption of whole genome sequencing and AI-enabled interpretation in clinical workflows.

Current wording

In addition, we generate revenues through software and interpretation services related to rare disease, hereditary risk, and cancer testing. Our customers include clinical laboratories, hospitals, and research institutions. Our ability to increase this revenue will depend on our ability to expand our customer base among hospitals and genomic centers, along with increased adoption of whole genome sequencing and AI-enabled interpretation in clinical workflows.

Previous wording

Diagnostic test revenue increased by $15.5 million, or 18%, to $101.3 million for the three months ended March 31, 2026, from $85.8 million for the three months ended March 31, 2025. The increase is attributable to increase of 27% in whole exome and genome sequencing revenues driven by a 34% increase in test volumes. This was partially offset by a 5% decrease in average reimbursement rates and declines in other non-exome test revenues.

Current wording

Diagnostic test revenue increased by $27.3 million, or 15%, to $213.2 million for the six months ended June 30, 2026, from $185.9 million for the six months ended June 30, 2025. The increase is attributable to increase of 21% in whole exome and genome sequencing revenues driven by a 33% increase in test volumes. This was partially offset by a 9% decrease in average reimbursement rates and declines in other non-exome test revenues.

Previous wording

Other revenue decreased by $0.4 million, to $1.0 million for the three months ended March 31, 2026, from $1.4 million for the three months ended March 31, 2025. The decrease is driven by lower data deal activity in the current period compared to the prior period. This was partially offset by revenue from Fabric Genomics operating segment in the current period, which was acquired in the second quarter of 2025.

Current wording

Other revenue decreased by $0.4 million, to $3.5 million for the six months ended June 30, 2026, from $3.9 million for the six months ended June 30, 2025. The decrease is driven by lower data deal activity in the current period compared to the prior period.

Previous wording

Gross profit increased by $9.7 million for the three months ended March 31, 2026, primarily driven by the 34% increase in whole exome and genome test volumes.

Current wording

Gross profit increased by $17.1 million for the six months ended June 30, 2026, primarily driven by the 33% increase in whole exome and genome test volumes.

Previous wording

Research and development expense increased by $7.2 million, or 57%, to $19.8 million for the three months ended March 31, 2026, from $12.6 million for the three months ended March 31, 2025. The increase was primarily attributable to higher compensation-related costs of $6.2 million which reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics. In addition, an increase in costs related to sponsored research programs of $0.6 million and an increase in software-related expenses of $0.4 million contributed to the overall increase in research and development expenses.

Current wording

Research and development expense increased by $11.8 million, or 43%, to $39.5 million for the six months ended June 30, 2026, from $27.7 million for the six months ended June 30, 2025. The increase was primarily attributable to higher compensation-related costs of $9.3 million which reflects an investment to expand our product development team. In addition, an increase in costs related to sponsored research programs of $0.8 million and an increase in software-related expenses of $1.6 million contributed to the overall increase in research and development expenses.

Previous wording

Selling, general and administrative expense increased by $24.1 million, or 48%, to $74.6 million for the three months ended March 31, 2026, from $50.5 million for the three months ended March 31, 2025. The increase was primarily attributable to higher compensation-related costs of $16.6 million which reflects our investment to support growth in our commercial team, as well as the inclusion of selling, general and administrative costs of Fabric Genomics in the current period. The increase also reflected higher IT software and infrastructure costs of $1.9 million, third-party consulting costs of $2.0 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting.

Current wording

Selling, general and administrative expense increased by $53.3 million, or 55%, to $150.6 million for the six months ended June 30, 2026, from $97.3 million for the six months ended June 30, 2025. The increase was primarily attributable to our investment to support growth in our commercial team with higher compensation-related costs of $29.5 million, higher marketing expenditures and continued investment in new customer experience capabilities. The increase reflected higher IT software and infrastructure costs of $2.9 million, third-party consulting costs of $5.9 million, marketing, travel and customer engagement expenses of $3.6 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting. In addition, the prior period included a one-time sales-and-use tax refund of $8.4 million.

Previous wording

During the first quarter of 2026, we recorded non-cash impairment charges totaling $31.3 million related to the goodwill and intangible assets of its Fabric Genomics reporting unit. This consists of a $11.9 million goodwill impairment charge, a $10.2 million impairment of developed technology, a $5.0 million impairment of customer relationships, and a $4.2 million impairment of tradenames and trademarks. See Note 6, “Goodwill and Intangible assets” for further information.

Current wording

During the first quarter of 2026, we recorded non-cash impairment charges totaling $31.3 million related to the goodwill and intangible assets associated with the Fabric Genomics acquisition. This consists of a $11.9 million goodwill impairment charge, a $10.2 million impairment of developed technology, a $5.0 million impairment of customer relationships, and a $4.2 million impairment of tradenames and trademarks. See Note 6, “Goodwill and Intangible assets” for further information.

Previous wording

Non-operating expense, net of $4.9 million for the three months ended March 31, 2026 primarily reflected a $6.6 million loss on extinguishment of the Perceptive long-term debt. This was offset by a gain in the change in the fair value of warrants of $0.9 million and a gain of $1.6 million in the change in fair value of contingent consideration related to Fabric Genomics.

Current wording

Non-operating expense, net of $5.8 million for the six months ended June 30, 2026 primarily reflected a $6.6 million loss on extinguishment of the Perceptive long-term debt and increased interest expense of $0.4 million as a result of the Blackstone loan agreement. This was offset by a gain in the change in the fair value of warrants of $1.1 million and a gain of $1.6 million in the change in fair value of contingent consideration associated with the Fabric Genomics acquisition.

Previous wording

Adjusted gross profit is a non-GAAP financial measure that we define as revenue less cost of services, excluding depreciation and amortization expense and stock-based compensation expense. We define adjusted gross margin as our adjusted gross profit divided by our revenue. We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

Current wording

Adjusted gross profit is a non-GAAP financial measure that we define as revenue less cost of services, excluding depreciation and amortization expense, stock-based compensation expense, and restructuring costs. We define adjusted gross margin as our adjusted gross profit divided by our revenue. We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

Previous wording

The following is a reconciliation of gross profit to our adjusted gross profit and of our gross margin to adjusted gross margin for the three months ended March 31, 2026 and 2025:

Current wording

The following is a reconciliation of gross profit to our adjusted gross profit and of our gross margin to adjusted gross margin for the three and six months ended June 30, 2026 and 2025:

Previous wording

Adjusted net income (loss) is a non-GAAP financial measure that we define as net income (loss) adjusted for depreciation and amortization, stock-based compensation expenses, restructuring costs, change in fair value of financial liabilities, non-core lease costs, loss on extinguishment of debt, interest expense (net), income tax expense (benefit), transaction costs and costs related to a legal reserve. We believe adjusted net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain factors that may vary from company to company for reasons unrelated to overall operating performance.

Current wording

Adjusted net income (loss) is a non-GAAP financial measure that we define as net (loss) income adjusted for depreciation and amortization, stock-based compensation expenses, restructuring costs, change in fair value of financial liabilities, non-core lease costs, loss on extinguishment of debt, interest expense (net), income tax expense (benefit), transaction costs and costs related to a legal reserve. We believe adjusted net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain factors that may vary from company to company for reasons unrelated to overall operating performance.

Previous wording

The following is a reconciliation of our net loss to adjusted net (loss) income for the three months ended March 31, 2026 and 2025:

Current wording

The following is a reconciliation of our net (loss) income to adjusted net income (loss) for the three and six months ended June 30, 2026 and 2025:

Previous wording

(1)Non-core lease costs represent occupancy and related expenses associated with vacant laboratory facilities and office space in Connecticut that are no longer utilized as part of the Company’s operations.

Current wording

(1)Non-core lease costs represent occupancy and related expenses associated with vacant laboratory facilities and office space that are no longer utilized as part of the Company’s operations.

Previous wording

(2)For the three months ended March 31, 2026, represents interest expense, net, income tax expense, net, and costs related to a certain litigation matter. For the three months ended March 31, 2025, represents interest expense, net, income tax expense, net, and transaction costs associated with the Merger Agreement.

Current wording

(2)For the three and six months ended June 30, 2026, represents income tax expense, net, and costs related to certain litigation matters. For the three and six months ended June 30, 2025, represents income tax expense, net, transaction costs associated with the Merger Agreement, and a sales-and-use tax refund.

Previous wording

As of March 31, 2026, our existing cash and cash equivalents and available-for-sale marketable securities were $170.7 million.

Current wording

As of June 30, 2026, our existing cash and cash equivalents and available-for-sale marketable securities were $132.5 million.

Previous wording

As discussed in the notes to our condensed consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of March 31, 2026, remaining payments due to the payor were $2.0 million. For more information regarding this matter, see Note 4, “Revenue Recognition” to our consolidated financial statements included in our 2025 Form 10-K and Note 3, “Revenue Recognition,” to our condensed consolidated financial statements included within this Quarterly Report, respectively.

Current wording

As discussed in the notes to our condensed consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of June 30, 2026, remaining payments had been settled. For more information regarding this matter, see Note 4, “Revenue Recognition” to our consolidated financial statements included in our 2025 Form 10-K and Note 3, “Revenue Recognition,” to our condensed consolidated financial statements included within this Quarterly Report, respectively.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2026 was $32.4 million, driven by a net loss of $63.3 million, net adjustments of $54.1 million and a change in operating assets and liabilities of $23.2 million. The impact of the change in operating assets and liabilities was primarily driven by decreased accounts payables and accrued expenses due to the timing of vendor payments and a decrease in other assets and liabilities due to the timing of associated payments.

Current wording

Net cash used in operating activities during the six months ended June 30, 2026 was $61.4 million, driven by a net loss of $81.1 million, net adjustments of $65.5 million and a change in operating assets and liabilities of $45.8 million. The impact of the change in operating assets and liabilities was primarily driven by decreased accounts payables and accrued expenses due to the timing of vendor payments and a decrease in other assets and liabilities due to the timing of associated payments.

Previous wording

Net cash provided by operating activities during the three months ended March 31, 2025 was $10.2 million, driven by a net loss of $6.5 million, net adjustments of $13.4 million and a change in operating assets and liabilities of $3.4 million. The impact of the changes in operating assets and liabilities was primarily driven by increased accounts payables and accrued expenses due to the timing of vendor payments and orders with suppliers which was partially offset by an increase in accounts receivable, driven by growth in exome and genome test volumes.

Current wording

Net cash provided by operating activities during the six months ended June 30, 2025 was $20.6 million, driven by a net income of $4.3 million, net adjustments of $29.3 million driven by depreciation and amortization expense and stock-based compensation expense. The impact of the changes in operating assets and liabilities was primarily attributable to increased accounts receivables driven by the growth of the whole exome and genome testing volumes and partially offset by increased accounts payables and accruals due to the timing of vendor payments.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2026 was $17.3 million, which included purchases of marketable securities of $20.2 million and purchases of property and equipment and development of internal-use software of $6.5 million. This was partially offset by proceeds from maturities of marketable securities of $8.5 million.

Current wording

Net cash used in investing activities during the six months ended June 30, 2026 was $22.9 million, which included purchases of marketable securities of $29.1 million and purchases of property and equipment and development of internal-use software of $16.6 million. This was partially offset by proceeds from maturities and sales of marketable securities of $22.7 million.

Previous wording

Net cash used in investing activities during the three months ended March 31, 2025 was $9.4 million, which included purchases of marketable securities of $17.2 million and property and equipment of $6.1 million, partially offset by $13.9 million in proceeds from the maturities of marketable securities.

Current wording

Net cash used in investing activities during the six months ended June 30, 2025 was $45.8 million, which included $33.2 million for the acquisition of Fabric Genomics, purchases of marketable securities of $30.8 million and property and equipment of $8.5 million, partially offset by $26.7 million in proceeds from the maturities of marketable securities.

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2026 was $38.6 million, which primarily reflected proceeds from long term debt, net of issuance costs, of $97.0 million and partially offset by the repayment of existing long-term debts in the amounts of $54.0 million and $4.4 million. For more information regarding our long-term debt, see Note 8, “Long-term Debt.”

Current wording

Net cash provided by financing activities during the six months ended June 30, 2026 was $39.6 million, which primarily reflected proceeds from long term debt, net of issuance costs, of $96.7 million and partially offset by the repayment of existing long-term debts in the amounts of $54.0 million and $4.4 million. For more information regarding our long-term debt, see Note 8, “Long-term Debt.”

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2025 was $13.7 million, primarily driven by the $13.9 million net proceeds from our prior ATM offering, net of issuance costs.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2025 was $14.1 million, which primarily reflected proceeds from the ATM offering of $13.8 million.