GRAIL, Inc.

Previous wording

You should read the following discussion of our results of operations and financial condition together with our accompanying unaudited condensed consolidated financial statements and the notes thereto included under Item 1. “Financial Statements”. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry and our business and financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our Annual Report on Form 10-K (filed on March 12, 2026) for the year ended December 31, 2025 (the “2025 Form 10-K”) and the section entitled “Cautionary Statement Concerning Forward-Looking Statements” of this Form 10-Q.

Current wording

You should read the following discussion of our results of operations and financial condition together with our accompanying unaudited condensed consolidated financial statements and the notes thereto included under Item 1. “Financial Statements”. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry and our business and financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our Annual Report on Form 10-K (filed on March 12, 2026) for the year ended December 31, 2025 (the “2025 Form 10-K”) and the section entitled “Cautionary Note Concerning Forward-Looking Statements” of this Form 10-Q.

Previous wording

Unless otherwise indicated, references to "GRAIL," “we,” “us,” and the "Company" refer to GRAIL, Inc. and its subsidiaries.

Current wording

Unless otherwise indicated, references to "GRAIL," “we,” “us,” and the "Company" refer to GRAIL, Inc. and its subsidiary.

Previous wording

We are an innovative commercial-stage healthcare company focused on shifting the paradigm in early cancer detection at population scale. We believe screening individuals for many types of cancer with a single test represents a significant opportunity to reduce the global burden of cancer. Our multi-cancer early detection (“MCED”) test (“Galleri”) can screen for many types of cancer, accurately predicting the specific organ or tissue type where the cancer signal originated (the “Cancer Signal of Origin”, or “CSO”), with high positive predictive values (“PPV”) and low false positive rates, all from a simple blood draw. Galleri has detected some of the most aggressive cancers in early stages including, among others, endometrial, esophageal, gastrointestinal, head and neck, liver, pancreatic, and rectal cancers. We have conducted what we believe is the largest clinical program in genomic medicine to date with data from over 385,000 participants that we believe demonstrate the clinical validation and clinical utility of Galleri in its intended use population. We have deep operational experience with over 925,000 tests processed across this clinical program and from our commercial experience, including through partnerships with leading healthcare systems, employers, digital health platforms, payors, international distributors and life insurance providers.

Current wording

We are an innovative commercial-stage healthcare company focused on shifting the paradigm in early cancer detection at population scale. We believe screening individuals for many types of cancer with a single test represents a significant opportunity to reduce the global burden of cancer. Our multi-cancer early detection (“MCED”) test, Galleri®, can screen for many types of cancer, accurately predicting the specific organ or tissue type where the cancer signal originated, with high positive predictive values and low false positive rates, all from a simple blood draw. Galleri has detected some of the most aggressive cancers in early stages including, among others, endometrial, esophageal, gastrointestinal, head and neck, liver, pancreatic, and rectal cancers. We have conducted what we believe is the largest clinical program in genomic medicine to date with data from over 385,000 participants that we believe demonstrate the clinical validation and clinical utility of Galleri in its intended use population. We have deep operational experience with over 970,000 tests processed across this clinical program and from our commercial experience, including through partnerships with leading healthcare systems, employers, digital health platforms, payors, international distributors and life insurance providers.

Previous wording

Recently we presented results from two of our large, interventional clinical trials, PATHFINDER 2 and NHS-Galleri Trial at the Annual American Society of Clinical Oncology (“ASCO”) meeting in June 2026, and included certain results from those studies in our premarket approval application (“PMA”) to the Food and Drug Administration (“FDA”), that we submitted to the FDA in January 2026 and which has been accepted by the FDA for review. Performance and safety data focused on the first approximately 25,000 participants of our approximately 35,000 parti cipant PATHFINDER 2 study that were initially presented at the European Society for Medical Oncology (“ESMO”) in October 2025 (the “PATHFINDER 2 Initial Results”) and demonstrated that adding Galleri to recommended (breast, cervical, colorectal and lung) screenings led to a more than seven-fold increase in the number of cancers found within a year, and an approximately three-fold increase when prostate screening was included. Results from the full approximately 35,000 participants in the PATHFINDER 2 study were generally consistent with the results presented at ESMO. We presented results from our three-year, randomized controlled NHS-Galleri Trial which demonstrated a substantial reduction in stage 4 cancer diagnoses, increased stage 1 and 2 detection of deadly cancers, and four-fold higher cancer detection rate when compared to recommended screenings alone. Although the primary endpoint of statistically significant combined stage 3 and 4 reduction in a pre-specified group of 12 deadly cancers was not observed; there was a favorable trend toward fewer combined stage 3 and 4 cancers in the intervention arm after the prevalent screening round. Galleri detected 366 Stage I and II cancers, more than the 290 cancers detected at any stage by the entirety of the U.K.’s standard of care screening program in the control arm. Additionally, adding Galleri was associated with a 25% reduction in cancers diagnosed after emergency presentation. Emergency presentations are among the costliest cancer diagnoses and are associated with the poorest patient outcomes.

Current wording

Data from the studies underpinning our FDA PMA submission have been presented and published in world-leading forums. The PATHFINDER 2 Initial Results were presented at ESMO in October 2025, and demonstrated that adding Galleri to recommended (breast, cervical, colorectal and lung) screenings led to a more than seven-fold increase in the number of cancers found within a year, and an approximately three-fold increase when prostate screening was included. Results from the full approximately 35,000 participants in the PATHFINDER 2 study were subsequently presented at the Annual American Society of Clinical Oncology (“ASCO”) meeting in June 2026 and were generally consistent with the results presented at the 2025 ESMO conference. At the 2026 ASCO meeting, we also presented results from our three-year, randomized controlled NHS-Galleri Trial in approximately 140,000 participants, which demonstrated a substantial reduction in stage 4 cancer diagnoses, increased stage 1 and 2 detection of deadly cancers, and four-fold higher cancer detection rate when compared to recommended screenings alone. Although the primary endpoint of statistically significant combined stage 3 and 4 reduction in a pre-specified group of 12 deadly cancers was not observed; there was a favorable trend toward fewer combined stage 3 and 4 cancers in the intervention arm after the prevalent screening round. Notably, we observed a more than 20% decrease in stage IV cancers in the second and third screening rounds, which was outweighed in the combined metric by an overall increase in the number of stage III cancers, particularly in the prevalent screening round. Additionally, Galleri detected 366 stage I and II cancers, more than the 290 cancers detected at any stage by the entirety of the U.K.’s standard of care screening program in the control arm. Additionally, adding Galleri was associated with a 25% reduction in cancers diagnosed after emergency presentation. Emergency presentations are among the costliest cancer diagnoses and are associated with the poorest patient outcomes. Taken together, we believe these results demonstrate the powerful potential for Galleri to improve the effectiveness and efficiency of national screening programs around the globe.

Previous wording

We designed Galleri to detect cancer early, when it is more amenable to curative treatment, and we launched Galleri in the United States in mid-2021. Galleri works by detecting DNA fragments shed into the bloodstream by tumor cells and analyzing specific methylation patterns that can be used to both identify a general cancer signal and localize that signal to a specific organ or tissue type. We have sold over 595,000 commercial Galleri tests through June 30, 2026, with over 117,000 sold during the six months ended June 30, 2026.

Current wording

We designed Galleri to detect cancer early, when it is more amenable to curative treatment, and we launched Galleri in the United States in mid-2021. Galleri works by detecting DNA fragments shed into the bloodstream by tumor cells and analyzing specific methylation patterns that can be used to both identify a general cancer signal and localize that signal to a specific organ or tissue type. We have sold over 650,000 commercial Galleri tests through September 30, 2026, with over 174,000 sold during the nine months ended September 30, 2026.

Previous wording

As an early pioneer of MCED testing, we have established strong relationships within the cancer and primary care community, including through partnerships with academic and community medical centers, key opinion leaders, and governmental policy and advocacy partners. We have shared evidence supporting our MCED testing at renowned medical conferences, such as the American Association of Cancer Research (“AACR”), ASCO, ESMO, and American Academy of Family Physicians. We have also published results from our studies in leading scientific and medical journals, including The Lancet, Nature, Nature Medicine, Cancer Cell, and The Lancet Oncology.

Current wording

As an early pioneer of MCED testing, we have established strong relationships within the cancer and primary care community, including through partnerships with academic and community medical centers, key opinion leaders, and governmental policy and advocacy partners. We have shared evidence supporting our MCED testing at renowned medical conferences, such as the American Association of Cancer Research (“AACR”), ASCO, ESMO, and American Academy of Family Physicians. We have also published results from our studies in leading scientific and medical journals, including Cancer Cell, The Lancet, The Lancet Oncology, Nature, Nature Medicine, and The New England Journal of Medicine.

Previous wording

Since our inception, we have incurred net losses each year. We incurred net losses of $110.2 million and $114.0 million for the three months ended June 30, 2026 and June 30, 2025 and $203.4 million and $220.2 million for the six months ended June 30, 2026 and June 30, 2025. Substantially all of our net losses resulted from the application of pushdown accounting, including goodwill and intangible and other asset impairments and the amortization of intangible assets, as well as our research and development programs, general and administrative costs associated with our operations, and sales and marketing costs associated with commercializing our products. As a result of the application of pushdown accounting, our balance sheet includes intangible assets, which may be subject to additional impairment over time. We expect to continue to incur operating losses for at least the next several years as we invest in research and development and the commercialization of existing products.

Current wording

Since our inception, we have incurred net losses each year. We incurred net losses of $103.6 million and $89.0 million for the three months ended September 30, 2026 and September 30, 2025 and $307.0 million and $309.2 million for the nine months ended September 30, 2026 and September 30, 2025. Substantially all of our net losses resulted from the application of pushdown accounting, including goodwill and intangible and other asset impairments and the amortization of intangible assets, as well as our research and development programs, general and administrative costs associated with our operations, and sales and marketing costs associated with commercializing our products. As a result of the application of pushdown accounting, our balance sheet includes intangible assets, which may be subject to additional impairment over time. We expect to continue to incur operating losses for at least the next several years as we invest in research and development and the commercialization of existing products.

Previous wording

Adjusted EBITDA was$(90.3) million and$(78.3) million for the three months ended June 30, 2026 and June 30, 2025 and $(170.2) million and$(177.1) million for the six months ended June 30, 2026 and June 30, 2025. Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to the most directly comparable U.S. generally accepted accounting principle (“GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of these measures, please see “Non-GAAP Financial Measures” below.

Current wording

Adjusted EBITDA was$(92.6) million and$(71.7) million for the three months ended September 30, 2026 and September 30, 2025 and $(262.8) million and$(248.8) million for the nine months ended September 30, 2026 and September 30, 2025. Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to the most directly comparable U.S. generally accepted accounting principle (“GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of these measures, please see “Non-GAAP Financial Measures” below.

Previous wording

•FDA and other regulatory approval and reimbursement. Our performance will be impacted by the extent to which we can secure reimbursement and coverage for Galleri. Prior to broader coverage and reimbursement in the United States, we will continue our work with clinics and health systems to accelerate utilization, and with self-insured employers and health insurers to offer and cover Galleri. Galleri is currently available as a laboratory developed test (“LDT”) in the United States and we have established coverage and reimbursement from a number of self-insured employers and health plans, including coverage from TRICARE, but we do not currently have broader coverage and reimbursement by Medicare or large commercial insurers. While Galleri has not been approved or cleared by the FDA, FDA approval is currently not required to market our test in the United States. We are pursuing FDA approval to help support broad access for Galleri in the United States and we submitted a PMA for Galleri to the FDA in January 2026. The FDA Molecular and Clinical Genetics Panel of the Medical Devices Advisory Committee is expected to be scheduled to review the Galleri PMA this fall. Obtaining PMA approval can take several months or years from the time an application is submitted, if at all, and any negative advisory committee recommendation could materially impede the chances for approval. Moreover, the regulatory requirements surrounding the pathway to PMA for laboratory tests have in the recent past, and may in the future, be subject to change. We believe that FDA approval, if obtained, could unlock coverage from large commercial payors in the United States. In February 2026, a new law created a coverage benefit category to enable coverage of FDA-approved MCED tests by Medicare, with authority for Centers for Medicare and Medicaid Services (“CMS”) to initiate coverage as early as January 1, 2029 for the aged 50-65 Medicare population and expanding one age-year at a time annually. If we obtain FDA approval, we expect to pursue coverage through this new law and, subsequently, inclusion of Galleri in the United States Preventive Services Task Force (“USPSTF”) guideline recommendation, although such inclusion may take years and is not certain even with FDA approval. Should USPSTF recommend Galleri with an A or B recommendation, CMS would then have the authority to expand coverage beyond what is covered under the MCED benefit category. We believe FDA approval and, to a greater extent, inclusion in USPSTF guideline recommendations would further increase adoption and market acceptance of our tests. Over time, we have and may continue to opt to provide rebates or discounts to certain customers, or reduce pricing in order to access a broader population base and accelerate adoption. In the United Kingdom, NHS England (which is being merged with the Department of Health and Social Care) (the “NHS”) will evaluate the final results from the NHS-Galleri Trial before determining w…

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Current wording

•FDA and other regulatory approval and reimbursement. Our performance will be impacted by the extent to which we can secure reimbursement and coverage for Galleri. Prior to broader coverage and reimbursement in the United States, we will continue our work with clinics, health systems, and digital health platforms to accelerate utilization, and with self-insured employers and health insurers to offer and cover Galleri. Galleri is currently available as a laboratory developed test in the United States and we have established coverage and reimbursement from a number of self-insured employers and health plans, but we do not currently have broader coverage and reimbursement by Medicare or large commercial insurers. While Galleri has not been approved or cleared by the FDA, FDA approval is currently not required to market our test in the United States. We are pursuing FDA approval to help support broad access for Galleri in the United States and we submitted a PMA for Galleri to the FDA in January 2026. In September 2026, the FDA Molecular and Clinical Genetics Panel of the Medical Devices Advisory Committee voted in favor of Galleri’s safety, effectiveness and overall benefit-risk profile for screening for the early detection of multiple types of cancer in adults aged 50 years and older. The FDA convenes advisory committees to obtain independent expert advice and is not bound by the advisory committee’s recommendations, though it takes such recommendations into consideration when making its final decision on our PMA, which is expected by early first quarter of 2027. Obtaining PMA approval can take several months or years from the time an application is submitted, if at all. Moreover, the regulatory requirements surrounding the pathway to PMA approval for laboratory tests have in the recent past, and may in the future, be subject to change. We believe that FDA approval, if obtained, could unlock coverage from large commercial payors in the United States. In February 2026, a new law created a coverage benefit category to enable coverage of FDA-approved MCED tests by Medicare, with authority for Centers for Medicare and Medicaid Services (“CMS”) to initiate coverage as early as January 1, 2029 for the aged 50-65 Medicare population and expanding one age-year at a time annually. If we obtain FDA approval, we expect to pursue coverage through this new law and, subsequently, inclusion of Galleri in the United States Preventive Services Task Force (“USPSTF”) guideline recommendation, although such inclusion may take years and is not certain even with FDA approval. Should USPSTF recommend Galleri with an A or B recommendation, CMS would then have the authority to expand coverage beyond what is covered under the MCED benefit category and commercial payors would generally be required under the Affordable Care Act to cover the recommended screening, without patient cost sharing, beginning one year after the recommendation is made. We believe FDA approval and, to…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•Continued development of, and competition within, the market for MCED testing. Multi-cancer early detection is a novel technology and the market for MCED tests is evolving. We continue to drive MCED as a solution to one of healthcare’s most important challenges. Our performance depends on the extent to which key stakeholders, including current and potential commercial partners, payors and health systems, regulators, policy makers, academic and community medical centers, and key opinion leaders and advocates, understand and support MCED testing as an effective solution for cancer screening. We make significant efforts to educate these key stakeholders regarding the benefits of MCED and the clinical and economic value of our products, which we believe will continue to drive awareness of MCED and expand the commercial opportunity for our products. Additionally, new MCED products from new market entrants launched commercially in the second half of 2025. We believe that the addition of new market entrants will help develop the market for MCED testing. However, these competitors will also be targeting similar markets as us and may compete with us for customers on characteristics of their tests, such as test performance, ease of use and cost. These companies may also present clinical or other information, such as test performance information, that differs from our own presentation of similar information. Our ability to differentiate Galleri from other MCED products and any such presented data will be a key factor in our success. We believe we are differentiated by our extensive and robust datasets generated from our clinical studies, our rigorous and objective approach to test development and research, our multidisciplinary capabilities leveraging the power of next-generation sequencing and advanced and trained machine learning algorithms and data science, our robust intellectual property portfolio, and our investment in our facilities and operational workflows. However, certain new market entrants may have greater financial resources, quicker reimbursement timelines, larger sales forces, more successful marketing campaigns, more experience in screening or international commercialization, lower prices or other advantages. Our ability to succeed will depend on our market success. See Item 1A. “Risk Factors”.

Current wording

•Continued development of, and competition within, the market for MCED testing. Multi-cancer early detection remains a novel technology and the market for MCED tests continues to rapidly evolve. We continue to drive MCED as a solution to one of healthcare’s most important challenges. Our performance depends on the extent to which key stakeholders, including current and potential commercial partners, payors and health systems, regulators, policy makers, academic and community medical centers, and key opinion leaders and advocates, understand and support MCED testing as an effective solution for cancer screening. We make significant efforts to educate these key stakeholders regarding the benefits of MCED and the clinical and economic value of our products, which we believe will continue to drive awareness of MCED and expand the commercial opportunity for our products. There has been a significant increase in competition in the market for MCED testing and in cancer screening tests generally, and we expect this trend of increasing competition to continue. Over the last few years, a number of new MCED and cancer screening products have launched commercially, and we expect additional products to launch in the future. While we believe that increasing competition, including the addition of new market entrants and products, will help develop our target market, these competitors generally compete with us for customers on the basis of test performance, ease of use and pricing and have created a more crowded competitive market than previously existed. Our ability to differentiate Galleri from competitors is and will remain a key factor in determining our success. We believe we are differentiated by our commitment to FDA review of Galleri in the PMA we submitted in January 2026, our extensive and robust datasets generated from our clinical studies, our demonstrated test performance, our clinical program that we believe is the largest in genomic medicine, our rigorous and objective approach to test development and research, our multidisciplinary capabilities leveraging the power of next-generation sequencing and advanced and trained machine learning algorithms and data science, our robust intellectual property portfolio, and our investment in our facilities and operational workflows. However, certain competitors may have greater financial resources, better brand recognition, quicker reimbursement timelines, larger sales forces, larger or more successful marketing campaigns, more experience in screening or international commercialization, lower prices or promotional or bundled offerings, including offerings of MCED tests at no additional cost in connection with customers’ use of other screening products, or other advantages. Our ability to succeed will depend on our market success. See Item 1A. “Risk Factors”.

Previous wording

•Demand for our products and customer mix. A key factor to our future success is and will be our ability to increase demand for, and sales of, Galleri from new and existing customers. Our commercial strategy is focused on innovative value-oriented partnerships and targets primary care physicians, health systems, employers, digital health platforms, payors, international distributors and life insurance providers. As Galleri is not currently broadly reimbursed, our ability to drive demand from these customers is directly linked to our ability to demonstrate the clinical and economic value of our test through clinical validation and real-world experience. As of June 30, 2026, we have entered into commercial partnerships, including with leading healthcare systems, digital health platforms, employers, payors, and life insurance providers, and have established a network of more than 19,000 prescribers across the United States in a pre-reimbursement setting. We believe this commercial network represents a significant opportunity to drive further demand for Galleri. The mix of customers from which we generate revenue from period to period has an impact on our revenue and gross margin. Galleri test pricing is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates. For certain customers, we also offer rebates. Revenue generated from customers with negotiated contractual rates, or with rebates or discounts, is generally lower margin as compared to revenue generated based on list pricing. We expect the number or magnitude of these rates, discounts and rebates to reduce our average selling price (“ASP”) over time. In addition, we have entered into a number of biopharmaceutical research partnerships for our research-use-only (“RUO”) offering under our precision oncology portfolio. Large customers, such as healthcare systems, employers, and biopharmaceutical partners, generally begin using our products by initiating pilots involving a limited number of tests. We believe that our ability to convert these initial pilots into long-term customer relationships has the potential to drive substantial long-term revenue. Termination of these pilots or clinical trials can have a significant impact on our revenue and results of operations. For example, in late 2025, one of our pharmaceutical partners terminated its phase 3 trial due to low enrollment, for which our methylation technology was used as a potential companion diagnostic for enrolling participants. We also expect to increase demand from new customers through our efforts to further develop the market for MCED testing.

Current wording

•Demand for our products and customer mix. A key factor to our future success is and will be our ability to increase demand for, and sales of, Galleri from new and existing customers. Our commercial strategy targets primary care physicians, health systems, employers, digital health platforms, payors, international distributors and life insurance providers, and focuses on innovative value-oriented partnerships. As Galleri is not currently broadly reimbursed, our ability to drive demand from these customers is directly linked to our pricing strategy and ability to demonstrate the clinical and economic value of our test through clinical validation and real-world experience. We have entered into various commercial partnerships, including with leading healthcare systems, digital health platforms, employers, payors, and life insurance providers and, as of September 30, 2026, have established a network of more than 20,000 prescribers across the United States in a pre-reimbursement setting. We believe this commercial network represents a significant opportunity to drive further demand for Galleri. The mix of customers from which we generate revenue from period to period has an impact on our revenue and gross margin. Galleri test pricing is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates. We continuously assess our pricing strategy and list price, and have and may continue to implement broad promotional or other price reductions across all channels for limited or indefinite periods to drive demand and position our pricing for potential broader access, adoption and commercialization if we receive FDA approval, including in light of potential future reimbursement prices. For example, in September 2026 we launched a promotional pricing program ahead of the FDA advisory committee meeting. We expect the September 2026 pricing promotion to continue to impact our average selling price (“ASP”) in the coming periods. For certain customers, we also offer rebates. Revenue generated from customers with negotiated contractual rates, or with rebates or discounts, is generally lower margin as compared to revenue generated based on list pricing. As part of our overall pricing strategy, we expect these rates, discounts, rebates and promotions to reduce our ASP over time. In addition, we have entered into a number of biopharmaceutical research partnerships for our research-use-only (“RUO”) offering under our precision oncology portfolio. Large customers, such as healthcare systems, employers, and biopharmaceutical partners, generally begin using our products by initiating pilots involving a limited number of tests. We believe that our ability to convert these initial pilots into long-term customer relationships has the potential to drive substantial long-term revenue. Termination of these pilots or clinical trials can have a …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•Leverage our operational infrastructure. We have made significant investments to build a scalable infrastructure capable of meeting significant demand of up to one million tests per year while satisfying applicable certification and licensing requirements and accreditation standards. Our Durham, North Carolina facility is CAP-accredited and CLIA-certified. In addition, we engineered custom technology infrastructure and cloud-based tools to enable scalable data collection and analysis capabilities. With this foundational infrastructure in place, we have been able to generate scale efficiencies as the volume of tests sold has increased. As demand for our products increases, we expect to further leverage the scale efficiencies of our infrastructure and platform technology, which we believe will positively impact margins over time. In late 2024, we began using an updated version of Galleri in commercial channels. This version incorporates a highly-automated industrial scale platform and is intended to enable us to scale more efficiently with future demand. In connection with implementation of this new version of Galleri, we have experienced and may continue to experience increased turnaround times, re-processing costs and sample failures. We continually monitor and evaluate laboratory operations and performance in an effort to achieve our intended sample processing metrics and costs; however from time to time, processing issues may arise that could impact our operations. In the future, it is possible that we may invest significant amounts in infrastructure to support new products or existing products in new markets.

Current wording

•Leverage our operational infrastructure. We have made significant investments to build a scalable infrastructure capable of meeting significant demand of up to one million tests per year while satisfying applicable certification and licensing requirements and accreditation standards. Our Durham, North Carolina facility is CAP-accredited and CLIA-certified. In addition, we engineered custom technology infrastructure and cloud-based tools to enable scalable data collection and analysis capabilities. With this foundational infrastructure in place, we have been able to generate scale efficiencies as the volume of tests sold has increased. As demand for our products increases, we expect to further leverage the scale efficiencies of our infrastructure and platform technology, which we believe will positively impact Galleri margins over time. In late 2024, we began using an updated version of Galleri in commercial channels. This version incorporates a highly-automated industrial scale platform and is intended to enable us to scale more efficiently with future demand. In connection with implementation of this new version of Galleri, we have experienced and may continue to experience increased turnaround times, re-processing costs and sample failures. We continually monitor and evaluate laboratory operations and performance in an effort to achieve our intended sample processing metrics and costs; however from time to time, processing issues may arise that could impact our operations. In the future, it is possible that we may invest significant amounts in infrastructure to support new products or existing products in new markets.

Previous wording

We currently derive screening revenue through the sale of Galleri primarily within the United States and primarily through primary care physicians, health systems, employers, digital health platforms, payors, and life insurance providers. Galleri is not currently broadly reimbursed. Galleri test pricing is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates. For certain customers, we also offer rebates. We expect the number or magnitude of these rates, discounts and rebates to reduce our ASP over time. We identify each sale of our test to our customer as a single performance obligation; therefore, revenue is recognized at the point of time when the test result report is delivered. For self-pay patients, we have concluded that an implied contract exists, however the transaction price for the implied contract represents variable consideration as there are situations in which we do not expect to collect the full invoiced amounts from self-pay patients due to price concessions. We utilize the expected value approach to estimate the transaction price and apply a constraint for such variable consideration, on a portfolio basis. We monitor the estimated amounts to be collected at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required.

Current wording

We currently derive screening revenue from the sale of Galleri primarily within the United States and primarily through primary care physicians, health systems, employers, digital health platforms, payors, and life insurance providers. Galleri is not currently broadly reimbursed. Galleri test pricing is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates. We continuously assess our pricing strategy and list price, and have and may continue to implement broad promotional or other price reductions across all channels for limited or indefinite periods. For certain customers, we also offer rebates. As part of our overall pricing strategy, we expect these rates, discounts, rebates and promotions to reduce our ASP over time. We identify each sale of our test to our customer as a single performance obligation; therefore, revenue is recognized at the point of time when the test result report is delivered. For self-pay patients, we have concluded that an implied contract exists, however the transaction price for the implied contract represents variable consideration as there are situations in which we do not expect to collect the full invoiced amounts from self-pay patients due to price concessions. We utilize the expected value approach to estimate the transaction price and apply a constraint for such variable consideration, on a portfolio basis. We monitor the estimated amounts to be collected at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required.

Previous wording

Cost of revenue represents expenses that are incurred to produce and sell our products and services. For screening revenue, these costs consist of materials, labor including salaries and wages, bonus, benefits and stock-based compensation, blood collection kits and shipping, phlebotomy, royalties, electronic medical records, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs. For development services, these costs consist of materials and patient sample acquisition, labor including salaries and wages, bonus, benefits and stock-based compensation, royalties, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs. As demand for our products increases, we expect to further leverage the scale efficiencies of our infrastructure and platform technology, which we believe will positively impact margins over time. These margin improvements from scale efficiencies will at least be partially offset when we commence recognition of royalties owing under the terms of the Illumina Supply Agreement on December 24, 2026.

Current wording

Cost of revenue represents expenses that are incurred to produce and sell our products and services. For screening revenue, these costs consist of materials, labor including salaries and wages, bonus, benefits and stock-based compensation, blood collection kits and shipping, phlebotomy, royalties, electronic health records (“EHR”) integrations, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs. For development services, these costs consist of materials and patient sample acquisition, labor including salaries and wages, bonus, benefits and stock-based compensation, royalties, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs. As demand for our products increases, we expect to further leverage the scale efficiencies of our infrastructure and platform technology, which we believe will positively impact screening margins over time. These margin improvements from scale efficiencies will at least be partially offset when we commence recognition of royalties owing under the terms of the Illumina Supply Agreement on December 24, 2026 as well as by anticipated reductions in ASP due to pricing reductions over time through list price changes, discounts, rebates, promotions or other pricing activity.

Previous wording

As a result of the application of pushdown accounting, intangible assets recognized in our standalone financial statements relate to our own technology, and consist of developed technologies and in-process research and development that were measured at fair value upon the Acquisition. Our developed technology includes intangible assets related to Galleri, designed as a cancer screening test for asymptomatic individuals over 50 years of age, as well as our diagnostic aid for cancer (“DAC”) product that is being designed to accelerate diagnostic resolution for patients for whom there is a clinical suspicion of cancer. As part of our restructuring plan designed to reprioritize our resources to focus on our core MCED business and reduce overall spend as we pursue a PMA approval from the FDA for Galleri and broad reimbursement, we have reduced investment in the development of products beyond Galleri, including DAC. The cost of identifiable intangible assets with finite lives, such as developed technology assets, are amortized on a straight-line basis over the assets’ respective estimated useful lives of 18 years.

Current wording

As a result of the application of pushdown accounting, intangible assets recognized in our standalone financial statements relate to our own technology, and consist of developed technologies and in-process research and development that were measured at fair value upon Illumina’s acquisition of GRAIL. Our developed technology includes intangible assets related to technology underlying Galleri. The cost of identifiable intangible assets with finite lives, such as developed technology assets, are amortized on a straight-line basis over the assets’ respective estimated useful lives of 18 years.

Previous wording

Sales and marketing expenses consist primarily of personnel costs, including salaries, benefits and stock- based compensation expense, consulting costs, allocated overhead including facilities and information technology expenses, and travel associated with our commercial organization. Also included are costs associated with advertising programs that consist of brand and product awareness activities and trade events and conferences. Sales and marketing expense also includes amortization of the trade name intangible asset that was recognized upon the Acquisition, which has been recorded in our financial statements as a result of the application of pushdown accounting, and is amortized on a straight-line basis over the assets’ respective estimated useful lives of 9 years. We expect our sales and marketing expenses toincrease following the release of positive study results as we invest in initiatives to drive awareness and demand generation of Galleri and tocontinue todecrease as a percentage of revenue over the next three years and long term.

Current wording

Sales and marketing expenses consist primarily of personnel costs, including salaries, benefits and stock- based compensation expense, consulting costs, allocated overhead including facilities and information technology expenses, and travel associated with our commercial organization. Also included are costs associated with advertising programs that consist of brand and product awareness activities and trade events and conferences. Sales and marketing expense also includes amortization of the trade name intangible asset that was recognized upon Illumina’s acquisition of GRAIL, which has been recorded in our financial statements as a result of the application of pushdown accounting, and is amortized on a straight-line basis over the assets’ respective estimated useful lives of 9 years. We expect our sales and marketing expenses toincrease as we invest in initiatives to drive awareness and demand generation of Galleri and to decrease as a percentage of revenue over the next three years and long term.

Previous wording

General and administrative expenses consist of personnel expenses, including salaries, benefits and stock-based compensation expenses, for executive, finance and accounting, legal, human resources, business development, corporate communications, portfolio management, medical affairs, and management information systems personnel. Also included are professional fees, legal costs, including patent and trademark-related expenses and educational activities. We have incurred and will incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, director and officer insurance premiums, investor relations activities, and other expenses related to administrative and professional services. We expect our G&A expensesto increase as we continue to invest in corporate infrastructure to support public company operations and the commercialization of Galleri andto continue to decrease as a percentage of revenue over the next three years and long term.

Current wording

General and administrative expenses consist of personnel expenses, including salaries, benefits and stock-based compensation expenses, for executive, finance and accounting, legal, human resources, business development, corporate communications, portfolio management, medical affairs, and management information systems personnel. Also included are professional fees, legal costs, including patent and trademark-related expenses and educational activities. We have incurred and will incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, director and officer insurance premiums, investor relations activities, and other expenses related to administrative and professional services. We expect our general and administrative expensesto increase as we continue to invest in corporate infrastructure to support public company operations and the commercialization of Galleri and to decrease as a percentage of revenue over the next three years and long term.

Previous wording

Comparisons of the Three and Six Months Ended June 30, 2026 and June 30, 2025

Current wording

Comparisons of the Three and Nine Months Ended September 30, 2026 and September 30, 2025

Previous wording

The increase in screening revenue of $8.3 million or 24% was primarily driven by a 35% increase in Galleri sales volume, partially offset by an 8% decrease in ASP. Galleri sales volume increased in the second quarter of 2026 as a result of the continued ramp in our commercial activity following the release of our NHS-Galleri and PATHFINDER 2 study data, expansion of our partnerships with digital health platforms, employers, and international distributors, continued implementation of new pricing strategies, broader adoption of enhanced ordering pathways enabled by Electronic Health Record (“EHR”) integrations, and increased enrollment in our REACH/Galleri-Medicare clinical study.

Current wording

The increase in screening revenue of $4.5 million or 14% was primarily driven by a 24% increase in Galleri sales volume, partially offset by a 9% decrease in ASP, primarily driven by promotional pricing introduced in September 2026 that was not available in the corresponding quarter of the prior year. Galleri sales volume increased in the third quarter of 2026 as a result of the continued expansion of our commercial activity following the release of our NHS-Galleri and PATHFINDER 2 study data, and of our partnerships with digital health platforms, employers, and international distributors, continued implementation of new pricing strategies, broader adoption of enhanced ordering pathways enabled by EHR integrations, and increased enrollment in our REACH/Galleri-Medicare clinical study.

Previous wording

The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $8.1 million or 22% was primarily driven by a 42% increase in Galleri sales volume and an increase in allocated overhead costs as a result of the increase in the proportion of commercial samples compared to research samples processed within our laboratory. These increases were partially offset by improved fixed cost leverage due to an increase in volumes and a decrease in sample processing costs.

Current wording

The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $6.1 million or 38% was primarily driven by a 24% increase in Galleri sales volume and an increase in allocated overhead costs as a result of the increase in the proportion of commercial samples compared to research samples processed within our laboratory primarily due to a reduction in research sample volumes as validation samples were run in the prior year to support our PMA submission. These increases were partially offset by a decrease in sample reprocessing costs.

Previous wording

Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of revenue decreased approximately 2 percentage points in the second quarter of 2026, mainly due to improved fixed cost leverage due to the increase in volumes and a decrease in sample reprocessing costs, partially offset by an 8% decrease in ASP.

Current wording

Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of screening revenue increased approximately 11 percentage points in the third quarter of 2026, mainly due to a 9% decrease in ASP and an increase in allocated overhead costs driven by an increased proportion of commercial samples processed, partially offset by a decrease in sample reprocessing costs.

Previous wording

The decrease in research and development expenses of $4.8 million or 5% was primarily attributable to a $4.5 million decrease in laboratory supplies and research collaboration expenses, primarily due to a reduction in research sample volumes as validation samples were run in the prior year to support our PMA submission and a $1.7 million decrease in facilities and information technology costs allocated to the research and development function. These decreases were partially offset by a $1.4 million increase in stock-based compensation expense.

Current wording

The decrease in research and development expenses of $4.6 million or 9% was primarily attributable to a $3.3 million decrease in clinical studies primarily related to lower costs across our studies including the PATHFINDER 2 study and completion of enrollment in our REFLECTION study in the third quarter of 2025, a $1.6 million reduction in laboratory supplies and research collaboration expenses, primarily due to a reduction in research sample volumes as validation samples were run in the prior year to support our PMA submission and a $0.5 million decrease in facilities and information technology costs allocated to the research and development function. These decreases were partially offset by a $0.6 million increase in compensation expense, reflecting a $2.0 million increase in variable compensation and a $0.2 million increase in stock-based compensation, partially offset by a $1.6 million decrease in salaries and wages mainly due to the reallocation of labor costs supporting commercial activities to sales and marketing.

Previous wording

The increase in benefit from income taxes was primarily attributable to a higher effective tax rate due to an increase in discrete tax benefits, primarily related to stock-based compensation expense.

Current wording

The increase in benefit from income taxes was primarily attributable to a higher loss before income taxes and an increase in discrete tax benefits, primarily related to stock-based compensation expense.

Previous wording

The increase in screening revenue of $19.0 million or 30% was primarily driven by a 42% increase in Galleri sales volume, partially offset by an 8% decrease in ASP. Galleri sales volume increased in the first six months of 2026 as a result of the continued ramp in our commercial activity following the release of our NHS-Galleri and PATHFINDER 2 study data, expansion of our partnerships with digital health platforms, employers, and international distributors, continued implementation of new pricing strategies, broader adoption of enhanced ordering pathways enabled by EHR integrations, and increased enrollment in our REACH/Galleri-Medicare clinical study.

Current wording

The increase in screening revenue of $23.4 million or 24% was primarily driven by a 36% increase in Galleri sales volume, partially offset by an 8% decrease in ASP. Galleri sales volume increased in the first nine months of 2026 as a result of the continued expansion of our commercial activity following the release of our NHS-Galleri and PATHFINDER 2 study data, and of our partnerships with digital health platforms, employers, and international distributors, continued implementation of new pricing strategies, broader adoption of enhanced ordering pathways enabled by EHR integrations, and increased enrollment in our REACH/Galleri-Medicare clinical study.

Previous wording

The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $4.0 million or 21% was primarily driven by a 35% increase in Galleri sales volume and an increase in allocated overhead costs as a result of the increase in the proportion of commercial samples compared to research samples processed within our laboratory. These increases were partially offset by improved fixed cost leverage due to an increase in volumes and a decrease in sample reprocessing costs.

Current wording

The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $14.2 million or 27% was primarily driven by a 36% increase in Galleri sales volume and an increase in allocated overhead costs as a result of the increase in the proportion of commercial samples compared to research samples processed within our laboratory primarily due to a reduction in research sample volumes as validation samples were run in the prior year to support our PMA submission. These increases were partially offset by improved fixed cost leverage due to an increase in volumes and a decrease in sample reprocessing costs.

Previous wording

Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of revenue decreased approximately 3 percentage points in the first six months of 2026 mainly due to improved fixed cost leverage due to the increase in volumes and a decrease in sample reprocessing costs, partially offset by an 8% decrease in ASP.

Current wording

Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of screening revenue increased approximately 1 percentage point in the first nine months of 2026, mainly due to an 8% decrease in ASP and an increase in allocated overhead costs driven by an increased proportion of commercial samples processed, partially offset by improved fixed cost leverage due to the increase in volumes and a decrease in sample reprocessing costs.

Previous wording

The increase in sales and marketing expenses of $9.1 million or 32% was primarily attributable to continued ramp in our commercial activity, including a $5.3 million increase in compensation expense reflecting a $3.6 million increase in salaries and wages driven by a greater allocation of labor resources supporting commercial activities and increased headcount, a $1.0 million increase in variable compensation expense, and a $0.7 million increase in stock-based compensation expense. The increase was also attributable to a $3.2 million increase in marketing expenses and professional services, primarily reflecting expanded commercial marketing initiatives and external professional services supporting our commercialization efforts, as well as a $0.6 million increase in software costs utilized to support commercial activities.

Current wording

The increase in sales and marketing expenses of $21.0 million or 24% was primarily attributable to a $11.8 million increase in compensation expenses, reflecting a $8.2 million increase in salaries and wages driven by a greater allocation of labor resources supporting commercial activities and an increase in headcount, a $1.9 million increase in variable compensation, and a $1.5 million increase in stock-based compensation. The increase was also attributable to a $7.8 million increase in marketing expenses and professional services, primarily reflecting expanded commercial marketing initiatives and external professional services supporting our commercialization efforts. Additionally, software costs supporting commercial activities increased by $1.4 million.

Previous wording

The increase in general and administrative expenses of $10.5 million or 13% was primarily attributable to a $11.4 million increase in compensation expense, reflecting a $5.1 million increase in salaries and wages, primarily due to higher annual salaries, employer payroll taxes associated with stock-based compensation, a $3.9 million increase in stock-based compensation expense, and a $2.4 million increase in variable compensation expense. The increase was also attributable to a $1.8 million increase in allocated costs supporting general and administrative activities. These increases were partially offset by $2.7 million decreases related to contractors, legal, professional services and information technology costs driven by cost optimization efforts.

Current wording

The increase in general and administrative expenses of $13.8 million or 11% was primarily attributable to a $13.2 million increase in compensation expense, reflecting a $6.0 million increase in salaries and wages, primarily due to higher annual salaries and employer payroll taxes associated with stock-based compensation, a $4.6 million increase in variable compensation and a $2.6 million increase in stock-based compensation. The increase was also attributable to a $3.0 million increase in facilities and allocated costs primarily driven by lease-related costs associated with the commencement of our new corporate headquarters lease. These increases were partially offset by $2.4 million decreases related to contractors, legal, professional services and information technology costs driven by cost optimization efforts.

Previous wording

The decrease in intangible and other assets impairment was primarily attributable to an impairment charge related to in-process research and development ("IPR&D") recorded in the prior-year quarter that did not recur in the current quarter, partially offset by a full impairment of the deferred asset recognized in connection with the Samsung SPA.

Current wording

The decrease in intangible and other assets impairment of $2.6 million or 9% was primarily attributable to the $28.0 million impairment charge related to in-process research and development ("IPR&D") recognized during the nine months ended September 30, 2025, partially offset by the $25.4 million impairment of the deferred asset associated with the Samsung Stock Purchase Agreement (the “Samsung SPA”) recognized during the nine months ended September 30, 2026.

Previous wording

In addition to our financial results provided throughout this Form 10-Q that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), this Form 10-Q also includes financial measures that are not calculated in accordance with GAAP. Our non-GAAP financial disclosure includes Adjusted Gross Profit and Adjusted EBITDA. This information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes included elsewhere in this Form 10-Q.

Current wording

In addition to our financial results provided throughout this Form 10-Q that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), this Form 10-Q also includes financial measures that are not calculated in accordance with GAAP. Our non-GAAP financial disclosure includes Adjusted Gross Profit, Adjusted Gross Margin and Adjusted EBITDA. This information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes included elsewhere in this Form 10-Q.

Previous wording

Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the costs associated with our sales and marketing, product development, general and administrative activities and the impact of our financing methods and income taxes.

Current wording

Adjusted Gross Profit and Adjusted Gross Margin are key performance measures that our management uses to assess our operational performance, as they represent the results of revenues and direct costs, which are key components of our operations. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because they reflect the gross profitability of our operations, and exclude the costs associated with our sales and marketing, product development, general and administrative activities and the impact of our financing methods and income taxes.

Previous wording

We calculate Adjusted Gross Profit as gross profit/(loss) (as defined below) adjusted to exclude amortization of intangible assets and stock-based compensation allocated to cost of revenue. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss from operations, net earnings or loss and other GAAP measures of income (loss) or profitability. The following table presents a reconciliation of gross loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted Gross Profit.

Current wording

We calculate Adjusted Gross Profit as gross profit/(loss) (as defined below) adjusted to exclude amortization of intangible assets and stock-based compensation allocated to cost of revenue. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss from operations, net earnings or loss and other GAAP measures of income (loss) or profitability. We calculate Adjusted Gross Margin as Adjusted Gross Profit divided by total revenue. The following table presents a reconciliation of gross loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted Gross Profit.

Previous wording

(2)Gross loss excludes $3.1 million and $6.0 million of royalty expense, calculated in accordance with the Illumina Supply Agreement, that would have been incurred if such royalties had been payable during the three and six months ended June 30, 2026.

Current wording

(2)Gross loss excludes $2.6 million and $8.6 million of royalty expense, calculated in accordance with the Illumina Supply Agreement, that would have been incurred if such royalties had been payable during the three and nine months ended September 30, 2026.

Previous wording

(2)Represents the impairment charge related to the deferred asset recognized in connection with the Samsung SPA in the current period and the in-process research and development ("IPR&D") impairment charge in the prior period.

Current wording

(2)Represents the impairment charge related to the deferred asset recognized in connection with the Samsung SPA in the second quarter of 2026 and the in-process research and development ("IPR&D") impairment charge in the prior period.

Previous wording

In addition to providing non-GAAP financial measures, we believe certain additional information relating to the royalty we are required to pay to Illumina, Inc. (“Illumina”) in the future is useful to investors to understand the impact of the royalty suspension on our performance. Under the terms of the Illumina Supply Agreement, regardless of whether our products incorporate any Illumina technology, we will be obligated to pay Illumina a royalty. We expect that the royalty payments we will make to Illumina in the foreseeable future will result in a 7% royalty rate. The royalty obligation is currently suspended until December 24, 2026 or any earlier change of control of GRAIL, at which time royalty payments to Illumina will resume, without retroactive effect. Notwithstanding the suspension of the royalty, had we been required to pay the royalty to Illumina for the three- and six- month periods ended June 30, 2026, we would have made payments of $3.1 million and $6.0 million. Refer to Note 12 — Related Party Transactionsfor further details.

Current wording

In addition to providing non-GAAP financial measures, we believe certain additional information relating to the royalty we are required to pay to Illumina, Inc. (“Illumina”) in the future is useful to investors to understand the impact of the royalty suspension on our performance. Under the terms of the Illumina Supply Agreement, regardless of whether our products incorporate any Illumina technology, we will be obligated to pay Illumina a royalty. We expect that the royalty payments we will make to Illumina in the foreseeable future will result in a 7% royalty rate. The royalty obligation is currently suspended until December 24, 2026 or any earlier change of control of GRAIL, at which time royalty payments to Illumina will resume, without retroactive effect. Notwithstanding the suspension of the royalty, had we been required to pay the royalty to Illumina for the three- and nine- month periods ended September 30, 2026, we would have made payments of $2.6 million and $8.6 million. Refer to Note 12 — Related Party Transactionsfor further details.

Previous wording

As of June 30, 2026, our cash and cash equivalents totaled $55.6 million and our short-term marketable securities totaled $806.0 million.

Current wording

As of September 30, 2026, our cash and cash equivalents totaled $29.0 million and our short-term marketable securities totaled $759.7 million.

Previous wording

We began generating revenue in mid-2021, but we have continued to incur significant losses and negative cash flows from operations. Subsequent to the acquisition of GRAIL by Illumina, we have incurred net losses of $10.4 billion which includes cumulative charges of $7.5 billion for impairment of goodwill, intangible and other assets and amortization of intangible assets. We expect to continue to incur operating losses over at least the next several years as we continue to invest in research and development and seek to achieve broad reimbursement of our current commercialized products. We believe that our existing cash, cash equivalents and short-term marketable securities, together with the anticipated commercial adoption of Galleri, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, as of the date of this Form 10-Q. However, we anticipate that we will need to raise additional financing in the future to fund our operations. Our future capital requirements will depend on many factors, including the timing and extent of spending to support commercialization and pipeline product development, market acceptance of our products prior to broad reimbursement, and the timing of broad reimbursement. We are subject to typical risks associated with an early-stage commercial company and are developing the market for multi-cancer early detection. We may encounter complications with executing our business plans that may cause unforeseen expenses and adversely affect our business.

Current wording

We began generating revenue in mid-2021, but we have continued to incur significant losses and negative cash flows from operations. Subsequent to the acquisition of GRAIL by Illumina, we have incurred net losses of $10.5 billion which includes cumulative charges of $7.6 billion for impairment of goodwill, intangible and other assets and amortization of intangible assets. We expect to continue to incur operating losses over at least the next several years as we continue to invest in research and development and seek to achieve broad reimbursement of our current commercialized products. We believe that our existing cash, cash equivalents and short-term marketable securities, together with the anticipated commercial adoption of Galleri, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, as of the date of this Form 10-Q. However, we anticipate that we will need to raise additional financing in the future to fund our operations. Our future capital requirements will depend on many factors, including the timing and extent of spending to support commercialization and pipeline product development, market acceptance of our products prior to broad reimbursement, and the timing of broad reimbursement. We are subject to typical risks associated with an early-stage commercial company and are developing the market for multi-cancer early detection. We may encounter complications with executing our business plans that may cause unforeseen expenses and adversely affect our business.

Previous wording

Generally, our net cash provided by financing activities is used to fund our day-to-day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. During the six months ended June 30, 2026 and June 30, 2025, $23.4 million and $24.2 million were paid out related to annual bonuses.

Current wording

Generally, our net cash provided by financing activities is used to fund our day-to-day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. During the nine months ended September 30, 2026 and September 30, 2025, $23.4 million and $24.2 million were paid out related to annual bonuses.

Previous wording

The decrease in net cash used in operating activities was primarily driven by a reduction in the net loss, adjusted for non-cash charges of $11.8 million, partially offset by working capital changes of $0.7 million. The improvement in operating cash flows was primarily driven by higher cash collections from customers and lower cash expenditures for laboratory supplies and research collaboration activities, legal, professional and marketing services, and contractor and temporary labor costs driven by cost optimization efforts. These improvements were partially offset by higher cash compensation payments.

Current wording

The increase in net cash used in operating activities was primarily related to a $16.9 million decrease in noncash adjustments to net loss, partially offset by favorable working capital changes of $7.5 million and a $2.2 million decrease in net loss. The increase in operating cash flows was primarily driven by higher cash collections from customers and lower cash expenditures for laboratory supplies and research collaboration activities, clinical studies, legal and professional services, and contractor and temporary labor costs driven by cost optimization efforts. The increase in operating cash flows was partially offset by higher cash compensation payments.

Previous wording

The change in net cash used in investing activities was primarily related to the purchase of marketable securities, net of proceeds from maturities of marketable securities.

Current wording

The change in net cash used in investing activities was primarily related to the purchase of marketable securities and purchases of property and equipment, net of proceeds from maturities of marketable securities.