GeneDx Holdings Corp.
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
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Item 1. Condensed Consolidated Financial Statements (Unaudited)
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| September 30, 2026 (Unaudited) | December 31, 2025 | |
|---|---|---|
| Assets: | ||
| Current assets: | ||
| Cash and cash equivalents | $96,139 | $104,997 |
| Marketable securities | 73,979 | 66,285 |
| Accounts receivable | 92,131 | 74,370 |
| Inventory, net | 21,703 | 13,951 |
| Prepaid expenses and other current assets | 12,943 | 8,685 |
| Total current assets | 296,895 | 268,288 |
| Operating lease right-of-use assets | 32,404 | 23,412 |
| Property and equipment, net | 53,531 | 45,693 |
| Goodwill | 1,641 | 13,520 |
| Intangible assets, net | 137,732 | 168,481 |
| Other assets | 4,281 | 4,316 |
| Total assets | $526,484 | $523,710 |
| Liabilities and Stockholders’ Equity: | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $32,426 | $57,645 |
| Short-term lease liabilities | 5,823 | 4,404 |
| Other current liabilities | 33,154 | 46,859 |
| Total current liabilities | 71,403 | 108,908 |
| Long-term debt, net of current portion | 146,229 | 48,176 |
| Long-term lease liabilities | 63,332 | 56,046 |
| Other liabilities | 71 | 1,641 |
| Deferred taxes | 760 | 757 |
| Total liabilities | 281,795 | 215,528 |
| Purchase commitments and contingencies (Note 9) | ||
| Stockholders’ Equity: | ||
| Preferred Stock, $0.0001 par value: 1,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively | — | — |
| Class A common stock, $0.0001 par value: 1,000,000,000 shares authorized, 29,954,477 and 29,245,296 shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively | 3 | 3 |
| Additional paid-in capital | 1,711,675 | 1,680,738 |
| Accumulated deficit | (1,466,878) | (1,373,495) |
| Accumulated other comprehensive (loss) income | (111) | 936 |
| Total stockholders’ equity | 244,689 | 308,182 |
| Total liabilities and stockholders’ equity | $526,484 | $523,710 |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(in thousands, except share and per share amounts)
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Revenue | ||||
| Diagnostic test revenue | $120,059 | $113,523 | $333,244 | $299,382 |
| Other revenue | 3,042 | 3,220 | 6,551 | 7,168 |
| Total revenue | 123,101 | 116,743 | 339,795 | 306,550 |
| Cost of services | 37,041 | 32,216 | 107,286 | 92,645 |
| Gross profit | 86,060 | 84,527 | 232,509 | 213,905 |
| Research and development | 17,366 | 19,829 | 56,826 | 47,485 |
| Selling, general and administrative | 79,122 | 67,949 | 229,750 | 165,262 |
| Impairment loss | — | — | 31,287 | — |
| (Loss) income from operations | (10,428) | (3,251) | (85,354) | 1,158 |
| Non-operating expense, net | ||||
| Change in fair value of financial liabilities | — | (3,401) | 2,760 | (2,320) |
| Interest expense, net | (1,779) | (562) | (3,681) | (2,019) |
| Loss on extinguishment of debt | — | — | (6,565) | — |
| Other (expense) income, net | (94) | (174) | (138) | 274 |
| Total non-operating expense, net | (1,873) | (4,137) | (7,624) | (4,065) |
| Loss before income taxes | (12,301) | (7,388) | (92,978) | (2,907) |
| Income tax expense | (26) | (247) | (405) | (448) |
| Net loss | $(12,327) | $(7,635) | $(93,383) | $(3,355) |
| Other comprehensive loss, net of tax | ||||
| Unrealized (loss) gain related to available for sale securities, net | (453) | 190 | (1,047) | 172 |
| Comprehensive loss | $(12,780) | $(7,445) | $(94,430) | $(3,183) |
| Weighted-average shares outstanding of Class A common stock - Basic and Diluted | 29,880,144 | 28,797,730 | 29,643,799 | 28,505,657 |
| Loss per share, Class A common stock - Basic and Diluted | $(0.41) | $(0.27) | $(3.15) | $(0.12) |
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share amounts)
| Three months ended September 30, 2026 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Class A Common Stock · Additional paid-in capital · Accumulateddeficit · Accumulated other comprehensive income (loss) · Total stockholders’ equity | |||||||||||
| Shares · Par value | |||||||||||
| Balance at June 30, 2026 | 29,803,164 | $3 | $1,698,427 | $(1,454,551) | $342 | $244,221 | |||||
| Net loss | — | — | — | $(12,327) | — | (12,327) | |||||
| Common stock issued pursuant to stock option exercises | — | — | — | — | — | — | |||||
| Stock-based compensation expense | — | — | 8,253 | — | — | 8,253 | |||||
| Vested restricted stock units converted to common stock | 69,346 | — | — | — | — | — | |||||
| Issuance of common stock pursuant to Securities Purchase Agreement and other | 81,967 | — | 4,995 | — | — | 4,995 | |||||
| Other comprehensive loss, net of tax | — | — | — | — | (453) | (453) | |||||
| Balance at September 30, 2026 | 29,954,477 | $3 | $1,711,675 | $(1,466,878) | $(111) | $244,689 | |||||
| Nine months ended September 30, 2026 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Class A Common Stock · Additional paid-in capital · Accumulateddeficit · Accumulated other comprehensive income (loss) · Total stockholders’ equity | |||||||||
| Shares · Par value | |||||||||
| Balance at December 31, 2025 | 29,245,296 | $3 | $1,680,738 | $(1,373,495) | $936 | $308,182 | |||
| Net loss | — | — | — | (93,383) | — | (93,383) | |||
| Common stock issued pursuant to stock option exercises | 2,314 | — | 58 | — | — | 58 | |||
| Stock-based compensation expense | — | — | 23,591 | — | — | 23,591 | |||
| Vested restricted stock units converted to common stock | 579,592 | — | — | — | — | — | |||
| Issuance of common stock pursuant to employee stock purchase plan and other | 39,918 | — | 1,812 | — | — | 1,812 | |||
| Issuance of common stock pursuant to Securities Purchase Agreement | 81,967 | — | 5,000 | — | — | 5,000 | |||
| Issuance of common stock from subscription agreements | 5,390 | — | 476 | — | — | 476 | |||
| Other comprehensive loss, net of tax | — | — | — | — | (1,047) | (1,047) | |||
| Balance at September 30, 2026 | 29,954,477 | $3 | $1,711,675 | $(1,466,878) | $(111) | $244,689 | |||
| Three months ended September 30, 2025 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Class A Common Stock · Additional paid-in capital · Accumulateddeficit · Accumulated other comprehensive income · Total stockholders’ equity | |||||||||||
| Shares · Par value | |||||||||||
| Balance at June 30, 2025 | 28,708,058 | $2 | $1,624,513 | $(1,348,194) | $812 | $277,133 | |||||
| Net loss | — | — | — | $(7,635) | — | (7,635) | |||||
| Common stock issued pursuant to stock option exercises | 2,736 | — | 182 | — | — | 182 | |||||
| Stock-based compensation expense | — | — | 10,586 | — | — | 10,586 | |||||
| Vested restricted stock units converted to common stock | 77,528 | — | — | — | — | — | |||||
| Issuance of common stock in ATM offering, net of issuance costs | 101,367 | — | 11,802 | — | — | 11,802 | |||||
| Other comprehensive income, net of tax | — | — | — | — | 190 | 190 | |||||
| Balance at September 30, 2025 | 28,889,689 | $2 | $1,647,083 | $(1,355,829) | $1,002 | $292,258 | |||||
| Nine months ended September 30, 2025 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Class A Common Stock · Additional paid-in capital · Accumulateddeficit · Accumulated other comprehensive income · Total stockholders’ equity | |||||||||
| Shares · Par value | |||||||||
| Balance at December 31, 2024 | 28,016,545 | $2 | $1,596,889 | $(1,352,474) | $830 | $245,247 | |||
| Net loss | — | — | — | (3,355) | — | (3,355) | |||
| Common stock issued pursuant to stock option exercises | 38,168 | — | 982 | — | — | 982 | |||
| Stock-based compensation expense | — | — | 22,382 | — | — | 22,382 | |||
| Vested restricted stock units converted to common stock | 560,935 | — | — | — | — | — | |||
| Issuance of common stock pursuant to employee stock purchase plan | 22,674 | — | 1,262 | — | — | 1,262 | |||
| Issuance of common stock in ATM offering, net of issuance costs | 251,367 | — | 25,568 | — | — | 25,568 | |||
| Other comprehensive income, net of tax | — | — | — | — | 172 | 172 | |||
| Balance at September 30, 2025 | 28,889,689 | $2 | $1,647,083 | $(1,355,829) | $1,002 | $292,258 | |||
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Nine months ended September 30, | ||
|---|---|---|
| 2026 | 2025 | |
| Operating activities | ||
| Net loss | $(93,383) | $(3,355) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
| Depreciation and amortization expense | 20,418 | 18,343 |
| Stock-based compensation expense | 23,591 | 22,382 |
| Change in fair value of financial liabilities | (2,760) | 2,320 |
| Deferred tax expense | 405 | 448 |
| Legal reserves | — | 810 |
| Change in third party payor reserves | (1,370) | 8,746 |
| Loss on extinguishment of debt | 6,565 | — |
| Impairment loss | 31,287 | — |
| Other | 3,611 | 2,534 |
| Change in operating assets and liabilities: | ||
| Accounts receivable | (17,982) | (22,799) |
| Inventory | (7,823) | (72) |
| Accounts payable and accrued expenses | (19,308) | 5,185 |
| Other assets and liabilities | (15,239) | 1,827 |
| Net cash (used in) provided by operating activities | (71,988) | 36,369 |
| Investing activities | ||
| Acquisition of business, net of cash acquired | — | (33,195) |
| Purchases of marketable securities | (40,859) | (36,535) |
| Proceeds from sales of marketable securities | 3,172 | — |
| Proceeds from maturities of marketable securities | 29,175 | 33,955 |
| Purchases of property and equipment and development of internal-use software | (21,791) | (14,670) |
| Net cash used in investing activities | (30,303) | (50,445) |
| Financing activities | ||
| Proceeds from long term debt, net of issuance costs | 146,027 | — |
| Proceeds from offerings, net of issuance costs | — | 25,568 |
| Proceeds from issuance of common stock from securities purchase agreement | 5,000 | — |
| Proceeds from issuance of common stock from subscription agreements | 476 | — |
| Proceeds from issuance of common stock pursuant to employee stock purchase plan | 1,793 | 1,262 |
| Exercise of stock options | 58 | 982 |
| Repayment of long-term debt, including prepayment penalty - Perceptive | (54,000) | — |
| Repayment and principal payments for long-term debt - DECD | (4,447) | (906) |
| Finance lease principal payments | (1,473) | (2,074) |
| Net cash provided by financing activities | 93,434 | 24,832 |
| Net (decrease) increase in cash, cash equivalents and restricted cash | (8,857) | 10,756 |
| Cash, cash equivalents and restricted cash, at beginning of period | 105,989 | 86,202 |
| Cash, cash equivalents and restricted cash, at end of period | $97,132 | $96,958 |
| Supplemental disclosures of cash flow information | ||
| Cash paid for interest | $6,678 | $4,835 |
| Cash paid for taxes | $2,394 | $1,039 |
| Purchases of property and equipment in accounts payable and accrued expenses | $1,610 | $4,472 |
| Lease liability from obtaining right-of-use asset | $12,086 | $— |
Notes to Unaudited Condensed Consolidated Financial Statements
- Organization and Description of Business
GeneDx Holdings Corp., through its subsidiary GeneDx, LLC, is a leading genomics company—one that sits at the intersection of diagnostics and data science, pairing decades of genomic expertise with an ability to interpret clinical data at scale. The Company believes that everyone deserves personalized, targeted medical care—and that it all begins with a genetic diagnosis. Fueled by one of the world’s largest rare disease data sets, the Company’s industry-leading exome and genome tests translate complex genomic data into clinical answers that unlock personalized health plans, accelerate drug discovery, and improve health system efficiencies. The Company operates with conviction that what is best for patients must be embedded in every aspect of our work. In support of these beliefs, we value equitability, simplicity and transparency.
Unless otherwise stated herein or unless the context otherwise requires, references in these notes to:
“GeneDx Holdings” refer to GeneDx Holdings Corp., a Delaware corporation;
“Legacy GeneDx” refer to GeneDx, LLC, a Delaware limited liability company, which we acquired on April 29, 2022 (the “Acquisition”);
“Legacy Sema4” refer to Sema4 OpCo Inc., a Delaware corporation, which consummated the business combination with CM Life Sciences, Inc. (“CMLS”) on July 22, 2021 (the “Business Combination”);
“Fabric Genomics” refer to Fabric Genomics, Inc., a Delaware Corporation, which we acquired on May 5, 2025 (the “Merger”); and
“we,” “us” and “our,” the “Company” and “GeneDx” refer, as the context requires, to GeneDx Holdings and its consolidated subsidiaries.
- Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the accounting disclosure rules and regulations of the SEC regarding interim financial reporting. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP. These condensed financial statements consolidate the operations and accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Unless otherwise noted, all tabular dollars are in thousands, except per share amounts. Certain reclassifications have been made to the prior year condensed consolidated financial statements in order to conform to the current year’s presentation including the consolidation of the former Fabric Genomics and Legacy Sema4 operating segments into the GeneDx reportable segment effective in the second quarter of 2026. See Note 15, “Segment Reporting” for more information.
In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair statement of the financial position and the results of operations of the Company for the interim periods presented. Interim results are not necessarily indicative of the results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 23, 2026 (the “2025 Form 10-K”).
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. The Company bases these estimates on current facts, historical and anticipated results, trends and various other assumptions that it believes are reasonable in the circumstances, including assumptions as to future events. These estimates include, but are not limited to, the transaction price for certain contracts with customers, potential or actual claims for recoupment from third-party payors, the valuation of stock-based awards, the valuation of financial liabilities, the valuation of goodwill and intangible assets, and income taxes. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates, judgments and assumptions.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the 2025 Form 10-K. Except as disclosed below, there have been no material changes to the Company’s critical accounting policies and estimates in the current period.
Capitalized Software
The Company capitalizes certain costs incurred to develop internal-use software. Capitalization begins when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating the probability of completion, the Company considers whether significant development uncertainty exists, including whether the software contains novel or unproven functions that have not been resolved through testing or whether significant performance requirements remain substantially undefined.
Costs incurred prior to meeting these capitalization criteria, as well as costs for training and maintenance, are expensed as incurred. Capitalization ceases when the software project is substantially complete and ready for its intended use. Capitalized software costs are amortized using the straight-line method over an estimated useful life ofthree tofive years. The Company reviews capitalized software for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
See Note 5, “Property and Equipment, net” for more information.
Concentration of Credit Risk
The Company assesses both the self-pay patient and, if applicable, the third-party payor groups that reimburse the Company on the patient’s behalf when evaluating concentration of credit risk. Significant patients and payor groups are those that represent more than 10% of the Company’s total revenues for the period or accounts receivable balance at each respective balance sheet date. The significant concentrations of accounts receivable as of September 30, 2026 and December 31, 2025 were primarily from large managed care insurance companies, institutional billed accounts, and data arrangements. The Company does not require collateral as a means to mitigate customer credit risk.
For each significant payor group, revenue as a percentage of total revenues and accounts receivable as a percentage of total accounts receivable are as follows:
| Revenue · Accounts Receivable | ||||||
|---|---|---|---|---|---|---|
| Three months ended September 30, · Nine months ended September 30, · September 30, · December 31, | ||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |
| Payor group A(1) | 28% | 21% | 25% | 23% | 22% | 18% |
| Payor group B(1) | 33% | 31% | 31% | 31% | 23% | 27% |
| Payor group C(1) | * | * | * | * | 11% | * |
*Less than 10%
(1)The significant payor groups identified in the table above represent multiple payors aggregated based on similar contract terms and reimbursement patterns. No single payor or individual client accounted for more than 10% of revenue or receivables for the current period.
The Company is subject to a concentration of risk from a limited number of suppliers for certain reagents, laboratory equipment and laboratory supplies. One supplier accounted for approximately 22% and 16% of spend for the three months ended September 30, 2026 and 2025, respectively, and 23% and 20% for the nine months ended September 30, 2026 and 2025, respectively. This risk is managed by maintaining a target quantity of surplus stock. Alternative suppliers are available for the majority of these reagents and supplies.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The standard requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. As revised by the issuance of ASU 2025-01, Disaggregation of Income Statement Expenses: Clarifying the Effective Date (“ASU 2025-01”) in January 2025, the provisions of ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). The standard addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2025-12 on its consolidated financial statements and related disclosures.
Recently Adopted Accounting Pronouncements
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software(“ASU 2025-06”). The standard establishes targeted enhancements to Subtopic 350-40 improving the operability of the recognition guidance considering different methods of software development. The update is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company early adopted this pronouncement on a prospective basis effective January 1, 2026, and the adoption did not have a material impact on its condensed consolidated financial statements and related disclosures.
- Revenue Recognition
Disaggregated Revenue
The following table summarizes the Company’s disaggregated revenue by payor category:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Diagnostic test revenue: | ||||
| Patients with third-party insurance | $103,885 | $95,020 | $283,530 | $244,183 |
| Institutional customers | 16,081 | 17,874 | 48,293 | 54,135 |
| Self-pay patients | 93 | 629 | 1,421 | 1,064 |
| Total diagnostic test revenue | 120,059 | 113,523 | 333,244 | 299,382 |
| Other revenue | 3,042 | 3,220 | 6,551 | 7,168 |
| Total | $123,101 | $116,743 | $339,795 | $306,550 |
Reassessment of Variable Consideration
Subsequent changes to the estimate of the transaction price, determined on a portfolio basis when applicable, are generally recorded as adjustments to revenue in the period of the change. The Company updates estimated variable consideration quarterly.
For the three months ended September 30, 2026 and 2025, the total change in estimate resulted in a net increase to revenue of $7.7 million and $1.0 million, respectively, resulting from changes in the estimated transaction price due to contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligations were met, and potential and actual settlements with third party payors.
Certain Payor Matters
As noted above, third-party payors, including government programs, may decide to deny payment or seek to recoup payments for tests performed by the Company that they contend were improperly billed, not medically necessary or against their coverage determinations, or for which they believe they have otherwise overpaid, including as a result of their own error. As a result, the Company may be required to refund payments already received, and the Company’s revenues may be subject to retroactive adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance, and changes by government agencies and payors in interpretations, requirements, policies and/or “conditions of participation” in various programs. The Company processes requests for recoupment from third-party payors in the ordinary course of its business, and it is likely that the Company will continue to do so in the future. If a third-party payor denies payment for testing or recoups money from the Company in a later period, reimbursement and the associated recognition of revenue for the Company’s testing services could decline.
From time to time, the Company may have an obligation to reimburse Medicare, Medicaid, and third-party payors for overpayments regardless of fault. Settlements with third-party payors for retroactive adjustments due to audits, reviews, or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing services. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor, the Company’s historical settlement activity (if any), and the Company’s assessment of the probability a significant reversal of cumulative revenue recognized will occur when the uncertainty is subsequently resolved. Estimated settlements are adjusted in future periods as such adjustments become known (that is, if new information becomes available), or as years are settled or are no longer subject to such audits, reviews, and investigations.
As of September 30, 2026 and December 31, 2025, the Company’s third-party payor reserves were $0.7 million and $5.0 million, respectively, and were recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets.
- Fair Value Measurements
The following tables set forth the fair value of financial instruments that were measured at fair value on a recurring basis:
| September 30, 2026 | ||||
|---|---|---|---|---|
| Total | Level 1 | Level 2 | Level 3 | |
| Financial Assets: | ||||
| Money market funds | $76,987 | $76,987 | $— | $— |
| U.S. treasury bonds | 42,163 | — | 42,163 | — |
| Corporate and municipal bonds | 41,905 | — | 41,905 | — |
| Total financial assets | $161,055 | $76,987 | $84,068 | $— |
| December 31, 2025 | ||||
|---|---|---|---|---|
| Total | Level 1 | Level 2 | Level 3 | |
| Financial Assets: | ||||
| Money market funds | $85,381 | $85,381 | $— | $— |
| U.S. treasury bonds | 32,079 | — | 32,079 | — |
| Corporate and municipal bonds | 33,854 | — | 33,854 | — |
| Total financial assets | $151,314 | $85,381 | $65,933 | $— |
| Financial Liabilities: | ||||
| Public warrant liability | $755 | $755 | $— | $— |
| Private warrant liability | 345 | — | 345 | — |
| Contingent consideration | 1,570 | — | — | 1,570 |
| Total financial liabilities | $2,670 | $755 | $345 | $1,570 |
As of September 30, 2026, the financial liabilities that were measured at fair value on a recurring basis were valued atzero.
There were no transfers between Level 1, Level 2 and Level 3 during the three and nine months ended September 30, 2026 and 2025.
The Company’s financial assets include investments in money market funds, U.S. treasury bonds, and corporate and municipal bonds. Investments in money market funds are classified within Level 1 of the fair value hierarchy as they are based on quoted prices in active markets. Investments in U.S. treasury bonds and corporate and municipal bonds are classified within Level 2 of the fair value hierarchy as they are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets.
The Company’s marketable securities presented in the condensed consolidated balance sheet as of September 30, 2026 have maturity dates ranging from 2026 through 2029 and are classified as current assets as these investments are intended to be readily available to fund current operations. The differences between the fair value and amortized cost basis of each security are the unrealized gains or losses recorded in accumulated other comprehensive (loss) income. As of September 30, 2026, the amortized cost for maturities less than one year and greater than one year were $41.8 million and $32.0 million, respectively.
Public and Private Warrants
In connection with the Business Combination, there were 666,515 warrants to purchase shares of Class A common stock outstanding as of December 31, 2025, including 457,323 public warrants and 209,192 private placement warrants. The public and private warrants expired on July 22, 2026. Accordingly, as of September 30, 2026, no warrants to purchase shares of Class A common stock were outstanding.
The public warrants were classified within Level 1 of the fair value hierarchy as they were traded in active markets and the fair value was determined on the basis of quoted market prices. The private placement warrants were classified within Level 2 of the fair value hierarchy as management determined the fair value of each private placement warrant was the same as that of a public warrant because the terms were substantially the same.
For the nine months ended September 30, 2026, a gain of $1.1 million was recorded within the change in fair value of financial liabilities in the condensed consolidated statements of operations and comprehensive loss. The change in fair value of the warrants for the three and nine months ended September 30, 2025 was a loss of $0.9 million and gain of $1.1 million, respectively.
Contingent Consideration
Pursuant to the Merger Agreement, the Company agreed to pay up to (i)$10.5 million in cash, shares of Class A common stock or a combination thereof, subject to Fabric Genomics achieving gross revenue equal to or above$6.0 million and a gross margin equal to or above 69% for the fiscal year ending December 31, 2025 (the “First Milestone Payment”), with the amount of the First Milestone Payment determined by multiplying$7.0 million by the quotient obtained by dividing Fabric Genomics’ gross revenue for the fiscal year ending December 31, 2025 by$8.0 million, and (ii)$7.5 million in cash, shares of Class A common stock or a combination thereof, as determined by the Company in its sole discretion, on or prior to April 30, 2027 subject to Fabric Genomics achieving gross revenue equal to or above$9.0 million and a gross margin equal to or above 69% for the fiscal year ending December 31, 2026 (the “Second Milestone Payment” and, together with the First Milestone Payment, the “Milestone Payments”), with the amount of the Second Milestone Payment determined by multiplying$5.0 million by the quotient obtained by dividing Fabric Genomics’ gross revenue for the fiscal year ending December 31, 2026 by$12.0 million. The shares of Class A common stock issued, if any, pursuant to the Milestone Payments are referred to as the “Milestone Shares.” Any Milestone Shares that are issued will be valued at$93.0318 per share based on the average of the daily volume average weighted price of the Class A common stock over the period of 30 trading days ended April 11, 2025.
The measurement period for the First Milestone Payment was completed on December 31, 2025, and the Company determined the amount of the liability based on the gross revenue and gross margin achieved by Fabric Genomics for the year ended December 31, 2025. As of September 30, 2026 and December 31, 2025, the amount reported for the First Milestone Payment in the condensed consolidated balance sheets was $5.4 million.
The fair value of the Second Milestone Payment was determined based on a Monte Carlo simulation valuation model, and is categorized as Level 3 of the fair value hierarchy as the Company utilizes unobservable inputs in estimating the fair value. Estimates and assumptions utilized in the Monte Carlo simulation model include risk-adjusted forecasted revenue and gross margin, revenue and gross profit volatility rates, expected stock price volatility, and discount rates which are based on the cost of debt and equity. As of September 30, 2026, the Company did not utilize a Monte Carlo simulation model and instead performed a probability assessment to estimate the fair value of the Second Milestone Payment. Based on this assessment, the Company determined that it was probable that the revenue target would not be achieved and accordingly, that the Second Milestone Payment would not be paid.
The following table summarizes the Level 3 inputs used in the valuation of the contingent consideration at December 31, 2025:
| December 31, 2025 | |
|---|---|
| Discount rate | 3.5% |
| Expected term (in years) | 1.3 |
| Equity volatility | 85.0% |
| Revenue volatility | 12.5% |
| Gross margin volatility | 30.0% |
As of September 30, 2026 and December 31, 2025, the amount of contingent consideration reported in the condensed consolidated balance sheets for the Second Milestone Payment waszero and $1.6 million, respectively. During the nine months ended September 30, 2026 and 2025, a gain of $1.6 million and loss of $3.4 million, respectively, was recorded within the change in fair value of financial liabilities in the condensed consolidated statements of operations and comprehensive loss.
- Property and Equipment, net
Property and equipment, net consisted of the following:
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Laboratory equipment | $42,803 | $32,197 |
| Leasehold improvements | 14,815 | 14,802 |
| Computer equipment | 13,954 | 10,951 |
| Building under finance lease | 4,529 | 4,529 |
| Equipment under finance leases | — | 689 |
| Furniture, fixtures and other equipment | 674 | 595 |
| Construction in-progress | 11,533 | 7,447 |
| Total property and equipment | 88,308 | 71,210 |
| Less: accumulated depreciation and amortization | (34,777) | (25,517) |
| Property and equipment, net | $53,531 | $45,693 |
For the three months ended September 30, 2026 and 2025, depreciation and amortization expense was $3.3 million and $2.4 million, respectively. For the nine months ended September 30, 2026 and 2025, depreciation and amortization expense was $9.1 million and $6.8 million, respectively.
Depreciation and amortization expense is included within the condensed consolidated statements of operations and comprehensive loss as follows:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Cost of services | $1,687 | $1,374 | $4,875 | $3,838 |
| Research and development | 430 | 242 | 925 | 823 |
| Selling, general and administrative | 1,160 | 754 | 3,277 | 2,167 |
| Total depreciation and amortization expense | $3,277 | $2,370 | $9,077 | $6,828 |
- Goodwill and Intangible Assets
The change in the carrying amount of goodwill during the nine months ended September 30, 2026 was as follows:
| Balance at December 31, 2025 | $13,520 |
|---|---|
| Impairment charges | (11,879) |
| Balance at September 30, 2026 | $1,641 |
During the first quarter of 2026, the Company concluded that a triggering event had occurred during the period for the goodwill associated with the Fabric Genomics reporting unit primarily due to a downward revision of forecasted cash flows driven by changes in commercial strategy and go-to-market execution, and lower revenue and profitability expectations.
The Company performed a quantitative analysis as of March 31, 2026 to determine the fair value of the Fabric Genomics reporting unit. The fair value was determined through estimating the reporting unit’s discounted future cash flows expected to be generated. Significant assumptions utilized in the valuation include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable market multiples. Based on the quantitative analysis, the Company concluded that the reporting unit’s carrying value was greater than the fair value and recorded a non-cash impairment charge of $11.9 million.
The following table reflects, as of September 30, 2026, the carrying values and remaining useful lives of acquired intangible assets:
| Gross Carrying Amount | Accumulated Amortization | AccumulatedImpairment | Net Carrying Value | Weighted-Average Amortization Period (Years) | |
|---|---|---|---|---|---|
| Tradenames and trademarks | $54,500 | $(14,077) | $(4,225) | $36,198 | 11.6 |
| Developed technology | 62,900 | (28,216) | (10,182) | 24,502 | 4.1 |
| Customer relationships | 104,100 | (22,067) | (5,001) | 77,032 | 15.6 |
| $221,500 | $(64,360) | $(19,408) | $137,732 | 12.5 |
Amortization expense for intangible assets was $3.6 million and $4.1 million for the three months ended September 30, 2026 and 2025, respectively, and $11.3 million and $11.5 million for the nine months ended September 30, 2026 and 2025, respectively. Amortization expense for intangible assets was recorded in selling, general and administrative expenses within the condensed consolidated statements of operations and comprehensive loss for each respective period.
During the first quarter of 2026, in connection with the triggering event described above, the Company evaluated the recoverability of the long-lived assets associated with the Fabric Genomics reporting unit. The Company compared the carrying value of the asset group to the sum of its undiscounted cash flows. The Company determined that the carrying value of the asset group was not recoverable, and therefore, the asset group failed the recoverability test under ASC 360.
The Company determined that the carrying value of the tradenames and trademarks intangible asset was not recoverable and had no remaining fair value, which resulted in a non-cash impairment charge of $4.2 million. The Company then estimated the fair value of the developed technology and customer relationship intangible assets, using the multi-period excess earnings method. Based on this analysis, the Company concluded that each respective intangible asset’s carrying value was greater than the fair value. Accordingly, the Company recorded non-cash impairment charges of $10.2 million and $5.0 million, respectively, to reduce the carrying value of the developed technology and customer relationships intangible assets to their respective estimated fair values.
- Related Party Transactions
Related party expenses include the purchase of diagnostic testing kits and lab materials from Twist Biosciences (“Twist”). Transactions with Twist are at arm’s length and represent market rates. The Company incurred $1.6 million and $1.9 million in purchases, and $2.2 million and $2.1 million was recorded in cost of services in the condensed consolidated statements of operations and comprehensive loss for the three months ended September 30, 2026 and 2025, respectively. The Company incurred $5.2 million and $6.1 million in purchases, and $5.8 million and $6.2 million was recorded in cost of services in the condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2026 and 2025, respectively. Payables due as of September 30, 2026 and December 31, 2025 were $0.3 million and $0.6 million, respectively.
- Long-Term Debt
As of September 30, 2026, long-term debt matures as follows:
| Term loan due 2031 | $150,000 |
|---|---|
| Less: debt issuance costs | (3,771) |
| Total long-term debt, net of debt issuance costs | $146,229 |
Blackstone Loan Agreement
On February 27, 2026 (the “Signing Date”), the Company entered into a Loan Agreement (the “Loan Agreement”), among Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C. (collectively referred to herein as “Blackstone”), certain subsidiaries of the Company party thereto as guarantors (collectively, the “Guarantors”), Wilmington Trust, National Association, as Agent and the lenders from time to time party thereto (collectively, the “Lenders”).
The Loan Agreement provides for a term loan in an aggregate principal amount of $100.0 million (the “Term Loan”), which was funded to the Company on February 27, 2026 (the “Closing Date”). The Term Loan bears interest at a rate equal to the Term SOFR adjusted secured overnight financing rate plus a margin of 4.50%. The Term Loan includes a SOFR floor of 1.50%. If an event of default occurs and is continuing, all amounts outstanding under the Loan Agreement will bear additional interest at a per annum rate equal to 2.00% plus the rate otherwise applicable to the Term Loan. The Term Loan will mature and the principal amount (including any interest and fees) must be repaid on the date that isfive years from the Closing Date. The Term Loan is subject to mandatory prepayment provisions that may require prepayment upon a change of control, the incurrence of certain additional indebtedness, certain asset sales, or an event of loss, subject to certain conditions set forth in the Loan Agreement. The Company may prepay the Term Loan in whole or in part at its option at any time. Any prepayment of the Term Loan is subject to certain yield protection premiums. The Company’s net proceeds from the Term Loan were $97.0 million, after deducting debt issuance costs and expenses.
The obligations under the Loan Agreement are guaranteed by the Guarantors and secured by a first lien security interest in substantially all assets of the Company and Guarantors. The Loan Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to the Company and the Guarantors. The Loan Agreement also contains a minimum liquidity covenant of $50.0 million effective following the Closing Date. If an event of default occurs and is continuing, the Lenders may declare all amounts outstanding under the Loan Agreement to be immediately due and payable.
Amendment and Restatement of Loan Agreement
On August 3, 2026, the Company entered into an Amended and Restated Loan Agreement (the “Amended Loan Agreement”) with Blackstone, the Guarantors, and the Lenders. The Amended Loan Agreement amends and restates the Company’s existing Loan Agreement and provides for an additional $50.0 million term loan facility, bringing the aggregate principal amount available under the facility to $150.0 million. The proceeds of the additional term loan are being used for general corporate purposes and to pay fees and expenses associated with the financing.
Amounts outstanding under the incremental term loan facility bear interest at a rate equal to Term SOFR plus 5.50%, subject to a 1.50% SOFR floor. The term loans mature five years following the February 2026 Closing Date and are subject to customary mandatory and voluntary prepayment provisions, including applicable prepayment premiums. The Company’s obligations under the Amended Loan Agreement are guaranteed by certain of its subsidiaries and secured by a first-priority lien on substantially all of the assets of the Company and the Guarantors. The Amended Loan Agreement contains customary affirmative and negative covenants, events of default and minimum liquidity requirements, including a requirement that the Company maintain minimum liquidity of $75.0 million.
Securities Purchase Agreement
On August 3, 2026, concurrently with the execution of the Amended Loan Agreement, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain affiliates of Blackstone (collectively, the “Investors”), pursuant to which the Investors agreed to purchase approximately $5.0 million of the Company’s Class A common stock in a private placement transaction.
Pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Investors 81,967 shares of Class A common stock at a purchase price of $61.00 per share, for aggregate gross proceeds of approximately $5.0 million. The closing of the private placement occurred on August 7, 2026, substantially concurrently with the funding of the incremental term loan facility.
The Purchase Agreement contains customary representations, warranties and covenants of the parties.
Perceptive Term Loan Facility
On February 27, 2026, the Company repaid in full all outstanding obligations under its Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings IV, LP. The aggregate payoff amount of approximately$54.5 million included: (i)$50.0 million of outstanding principal, (ii) a prepayment premium of$4.0 million, and (iii) remaining accrued interest, legal and administrative fees of$0.5 million. Upon the receipt of the payoff amount, the Credit Agreement was terminated, and all security interests and liens on the Company’s assets were released.
For thenine months ended September 30, 2026, the Company expensed$6.6 million to write off the prepayment premium and all remaining unamortized deferred financing fees associated with the Credit Agreement and reported these aggregate charges as a loss on extinguishment of debt within the condensed consolidated statement of operations.
Connecticut Department of Economic and Community Development Funding Commitment
During the first quarter of 2026, the Company reached an agreement with the Connecticut Department of Economic and Community Development (“DECD”) and repaid the remaining outstanding balance associated with the loan funding commitment from the DECD to the Company (the “DECD Loan Agreement”), which totaled $4.5 million. Upon the receipt of the payoff amount, the DECD Loan Agreement was terminated, and all security interests and liens on the Company’s assets were released.
- Purchase Commitments and Contingencies
Purchase Commitments
The following sets forth purchase commitments with software and equipment providers as of September 30, 2026 with a remaining term of at least one year:
| 2026 (remainder of year) | $4,284 |
| 2027 | 17,980 |
| 2028 | 10,948 |
| 2029 | 4,073 |
| 2030 | 978 |
| Total purchase commitments | $38,263 |
The Company enters into contracts with suppliers to purchase materials needed for diagnostic testing. These contracts generally do not require multi-year purchase commitments.
Leases
Except as disclosed below, there have been no material changes to the lease obligations from those disclosed in Note 10, “Leases” to the consolidated financial statements included in the 2025 Form 10-K.
In the first quarter of 2026, the Company entered into a sublease agreement for a laboratory space located in Gaithersburg, Maryland. The lease term extends through 2033 and the total minimum lease payments under the agreement are approximately $16.3 million over the lease term. The Company recognized a right-of-use asset and lease liability on the condensed consolidated balance sheet.
Contingencies
The Company is or may become subject to various claims and legal actions arising in the ordinary course of business. The Company does not believe that the outcome of any existing matters will have a material effect on the Company’s condensed consolidated financial statements. However, no assurance can be given that the ultimate resolution of such proceedings will not materially impact the Company’s condensed consolidated financial statements.
Except as described below, the Company was not a party to any material legal proceedings as of September 30, 2026, nor is it a party to any material legal proceedings as of the date of issuance of these condensed consolidated financial statements.
Basma and Kanungo Putative Class Action Lawsuits
On June 4, 2026 and July 28, 2026, putative securities class action lawsuits were filed in the United States District Court for the District of Connecticut against the Company and certain of the Company’s current officers, styled Basma v. GeneDx Holdings Corp., et al., 3:26-cv-00880 (D. Conn.) and Kanungo v. GeneDx Holdings Corp., et al., 3:26-cv-01203 (D. Conn.), respectively. Both complaints purport to bring suit on behalf of stockholders who purchased the Company’s publicly traded securities between April 16, 2025 and May 4, 2026, and allege that the defendants made false and misleading statements about the impact of the Fabric Genomics acquisition on the overall business of the Company, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and seek unspecified compensatory damages, fees and costs. The parties in the Basma action have agreed to postpone the Company’s response until the appointment of a lead plaintiff. The Company is unable to predict the outcome of these actions or to estimate the reasonably possible loss or range of loss, if any, at this time.
Helo Putative Class Action
On September 7, 2022, a putative securities class action lawsuit was filed in the United States District Court for the District of Connecticut, styled Helo v. Sema4 Holdings Corp., et al., 3:22-cv-01131 (D. Conn.) against the Company and certain of the Company’s current and former officers. Following the appointment of a lead plaintiff, an amended complaint was filed on January 30, 2023. The defendants moved to dismiss the amended complaint on August 21, 2023, and that motion was granted on July 31, 2024. A second amended complaint was filed on September 13, 2024. As amended, the complaint purports to bring suit on behalf of the stockholders who purchased the Company’s publicly traded securities between January 18, 2022 and August 15, 2022. The second amended complaint does not reassert most of the earlier allegations, and purports to allege that the defendants made false and misleading statements about the abilities and potential of Centrellis, the Company’s proprietary intelligence platform, in violation of Sections 10(b) and 20(a) of the Exchange Act, and seeks unspecified compensatory damages, fees and costs. The Company’s motion to dismiss the second amended complaint was denied on June 23, 2025, and the parties subsequently engaged in discovery.
During the first quarter of 2026, the parties in the Helo putative class action reached an agreement in principle to resolve all claims for approximately $4.8 million, and, in July 2026 executed a formal stipulation of settlement reflecting such agreement in principle. To be finalized, the settlement must first be approved by the United States District Court for the District of Connecticut. There can be no assurance that the Court will approve such settlement. During the fourth quarter of 2025, the Company reserved the aforementioned settlement and associated litigation costs, totaling approximately $6.0 million, which are reported in accounts payable and accrued expenses on the condensed consolidated balance sheet as of December 31, 2025. During the nine months ended September 30, 2026, the Company incurred $1.0 million in associated litigation costs of which $0.1 million is reported in accounts payable and accrued expenses on the condensed consolidated balance sheet as of September 30, 2026.
Other Legal Proceedings
On November 28, 2023, a stockholder filed a derivative suit, allegedly on behalf of the Company, based largely on the same allegations in the Helo securities class action referenced above. The suit was filed in federal court in the District of Delaware, styled Ghazaleh v. Schadt, et al., 1:23-cv-01357 (D. Del.), and purports to assert claims against certain of the Company’s former and current officers and directors under Section 10(b) of the Exchange Act, and for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment and corporate waste. The Company is named only as a nominal defendant. The complaint seeks damages on the Company’s behalf, and seeks corporate governance and other relief. On March 11, 2024, the Court issued an order staying this suit pending resolution of or announcement of a settlement in the Helo putative class action referenced above (or certain other developments).
On June 25, 2024, a substantially similar stockholder derivative suit was filed in federal court in the District of Connecticut, styled Scinto v. Schadt, et al., 3:24-cv-01100 (D. Conn.). The suit, also purportedly brought on the Company’s behalf against certain of its former or current officers and directors, asserts claims for breach of fiduciary duty, gross mismanagement, and violations of Sections 14(a) and 10(b) of the Exchange Act. The Company is named only as a nominal defendant. The complaint seeks damages on the Company’s behalf, as well as corporate governance reforms and other relief. On September 2, 2025, the Court issued an order staying this suit until the final resolution of or announcement of settlement in the Helo class action referenced above.
On August 15, 2025, a third, substantially similar stockholder derivative suit was filed in federal court in the District of Delaware, styled Ingrao v. Ryan, et al., 1:25-cv-01027 (D. Del.). The suit, also purportedly brought on the Company’s behalf against certain of its former or current officers and directors, asserts claims for breach of fiduciary duty, unjust enrichment and violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Company is named only as a nominal defendant. The complaint seeks damages on the Company’s behalf, as well as corporate governance reforms and other relief. On October 27, 2025, the Court issued an order (1) consolidating this action with the above-referenced Ghazaleh derivative suit and (2) staying the consolidated suit until final resolution of or an announcement of a settlement in the Helo class action discussed above. The consolidated derivative suit is captioned In re GeneDx Holdings Corp. Derivative Litigation, Lead Case No. 1:23-cv-01357-GBW (D. Del.).
- Stock-Based Compensation
Stock-based compensation expense is included within the condensed consolidated statements of operations and comprehensive loss as follows:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Cost of services | $371 | $219 | $1,312 | $580 |
| Research and development | 1,549 | 1,749 | 4,342 | 3,590 |
| Selling, general and administrative | 6,333 | 8,618 | 17,937 | 18,212 |
| Total stock-based compensation expense(1)(2) | $8,253 | $10,586 | $23,591 | $22,382 |
(1)The Company recorded an aggregate reversal of stock-based compensation of $0.5 million and $0.6 million during the three months ended September 30, 2026 and 2025, respectively, and $3.7 million and $1.4 million during the nine months ended September 30, 2026 and 2025, respectively, due to forfeiture activities upon employee terminations.
(2)Includes $0.4 million and $0.4 million of expenses related to the 2021 Employee Stock Purchase Plan for the three months ended September 30, 2026 and 2025, respectively, and $2.6 million and $1.1 million of expenses for the nine months ended September 30, 2026 and 2025, respectively.
Stock Incentive Plans
The Company maintains the Amended and Restated 2021 Equity Incentive Plan (as amended and restated, the “2021 Plan”) and the 2023 Equity Inducement Plan (the “Equity Inducement Plan”), which allow for grants of equity awards. As of September 30, 2026, there was an aggregate of 3,916,942 shares available for grants of equity awards under the 2021 Plan and Equity Inducement Plan.
Stock Options
All stock options granted under the 2021 Plan are accounted for as service-based equity awards. The following summarizes the stock option activity during the nine months ended September 30, 2026:
| Stock Options · Weighted-Average Exercise Price · Weighted-Average Remaining Contractual Life (years) · Aggregate Intrinsic Value | |||||||
|---|---|---|---|---|---|---|---|
| Outstanding at December 31, 2025 | 199,454 | $65.29 | 6.41 | $14,015 | |||
| Exercised | (2,314) | $25.27 | |||||
| Forfeited and canceled | (14,747) | $124.71 | |||||
| Outstanding at September 30, 2026 | 182,393 | $61.19 | 5.74 | $2,667 | |||
| Options exercisable at September 30, 2026 | 182,393 | $61.19 | 5.74 | $2,667 | |||
There wereno unvested options outstanding as of September 30, 2026. Accordingly, as of September 30, 2026, unrecognized stock-based compensation cost related to the unvested portion of the Company’s stock options waszero.
The weighted-average grant-date fair value and total fair value of options with tranches vested during the nine months ended September 30, 2026 were $45.37 and $0.9 million, respectively.
There wereno options granted during the nine months ended September 30, 2026. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2026 was $0.1 million, and is calculated based on the difference between the exercise price and the fair value of the Company’s Class A common stock as of the exercise date.
Restricted Stock Units
Restricted stock units granted under the 2021 Plan are accounted for as either service-based restricted stock units (“RSUs”) or performance-based restricted stock units (“PRSUs”). Restricted stock units convert to Class A common stock on aone-for-one basis as the awards vest. The Company measures the value of restricted stock units at fair value based on the closing price of the underlying common stock on the grant date. The following table summarizes restricted stock unit activity during the nine months ended September 30, 2026:
| Restricted Stock Units | Weighted-Average Grant Date-Fair Value Per Unit | |
|---|---|---|
| Outstanding at December 31, 2025 | 1,519,733 | $42.91 |
| Granted(1) | 729,146 | $76.95 |
| Vested | (579,592) | $38.74 |
| Forfeited | (199,062) | $73.78 |
| Outstanding at September 30, 2026 | 1,470,225 | $57.38 |
(1)Includes 124,805 PRSUs granted during the nine months ended September 30, 2026 with a weighted-average grant-date fair value of $83.32.
During the nine months ended September 30, 2026, the Company approved awards of 87,966 PRSUs to certain executives. The grant date fair value of the PRSUs is based on the fair value of the Company’s Class A common stock on the grant date. The awards have both service-based and performance-based vesting conditions. The actual number of shares earned on vesting ranges from 0% to 200% of the target number of shares granted, depending on the attainment of specified performance goals established for the years ending December 31, 2026 and 2027. In addition, previously awarded PRSUs granted during the nine months ended September 30, 2025 achieved the maximum 200% performance level, resulting in the issuance of 36,839 incremental shares during the nine months ended September 30, 2026.
The total fair value of restricted stock units vested during the nine months ended September 30, 2026 was $22.5 million. As of September 30, 2026, unrecognized stock-based compensation expense related to the Company’s restricted stock units was $44.5 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 2.0 years.
Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. Under the 2021 ESPP, eligible employees may purchase shares of the Company’s Class A common stock at a discount through payroll deductions during each discretesix-month offering period. The purchase price under each discrete offering period is equal to 85% of the lesser of the fair market value of the Class A common stock on the first and last day of the offering period.
The Company issued 39,918 shares of Class A common stock under the 2021 ESPP during the nine months ended September 30, 2026. As of September 30, 2026, a total of 1,051,915 shares of Class A common stock have been reserved for future issuance under the 2021 ESPP.
- Income Taxes
Income tax was a nominal and $0.4 million expense for the three and nine months ended September 30, 2026, respectively. Income tax was a $0.2 million expense and $0.4 million expense for the three and nine months ended September 30, 2025, respectively. Income taxes for these periods are recorded at the Company’s estimated annual effective income tax rate, subject to adjustments for discrete events should they occur. The Company’s effective tax rate for the nine months ended September 30, 2026 and 2025 was (0.4)% and (15.4)%, respectively.
The difference between the Company’s effective tax rates in 2026 and 2025 compared to the U.S. statutory tax rate of 21% is primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets. The Company currently has valuation allowances against a significant portion of its deferred tax assets primarily related to its net operating loss carryforwards and tax credit carryforwards.
- Net Loss per Share
The following table sets forth the computation of basic and diluted loss per share attributable to common stockholders:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Numerator: | ||||
| Net loss attributable to common stockholders | $(12,327) | $(7,635) | $(93,383) | $(3,355) |
| Denominator: | ||||
| Basic and Diluted weighted-average common shares outstanding | 29,880,144 | 28,797,730 | 29,643,799 | 28,505,657 |
| Basic and Diluted loss per share | $(0.41) | $(0.27) | $(3.15) | $(0.12) |
The following table summarizes the outstanding shares of potentially dilutive securities that were excluded from the computation of diluted loss per share attributable to common stockholders for the periods presented as the effect would be anti-dilutive:
| Three and nine months ended September 30, | ||
|---|---|---|
| 2026 | 2025 | |
| Outstanding options and restricted stock units | 1,652,618 | 1,886,233 |
| Outstanding warrants | — | 666,515 |
| Outstanding 2021 ESPP shares | 36,305 | 29,321 |
| Total | 1,688,923 | 2,582,069 |
- Restructuring Costs
During the second quarter of 2026, the Company completed a reduction in workforce resulting in the elimination of approximately 75 positions. The Company expects that all remaining cash severance payments will be complete in less than one year.
Restructuring costs are included within the condensed consolidated statements of operations and comprehensive loss as follows:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Cost of services | $18 | $— | $65 | $— |
| Research and development | (51) | (196) | 1,209 | (168) |
| Selling, general and administrative | 900 | 324 | 3,327 | 927 |
| Total restructuring expense | $867 | $128 | $4,601 | $759 |
The table below provides restructuring activity during the nine months ended September 30, 2026:
| Reserve balance at December 31, 2025 | Charged to costs and expenses | Payments and other | Reserve balance at September 30, 2026 | |
|---|---|---|---|---|
| Severance | $771 | $4,601 | $(3,737) | $1,635 |
- Supplemental Financial Information
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets to the total of the same amounts shown on the condensed consolidated statements of cash flows:
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Cash and cash equivalents | $96,139 | $104,997 |
| Restricted cash (included in other assets) | 993 | 992 |
| Total | $97,132 | $105,989 |
Restricted cash as of September 30, 2026 and December 31, 2025 primarily consists of money market deposit accounts that secure an irrevocable standby letter of credit that serves as collateral for a security deposit for operating leases.
Prepaid expenses and other current assets consisted of the following:
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Prepaid expenses | $11,303 | $7,174 |
| Other current assets | 1,640 | 1,511 |
| Total | $12,943 | $8,685 |
Accounts payable and accrued expenses consisted of the following:
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Accounts payable | $3,319 | $2,461 |
| Accrued expenses | 23,606 | 44,659 |
| Third party payor reserves, short-term | 714 | 4,965 |
| Legal reserves | 4,787 | 5,560 |
| Total | $32,426 | $57,645 |
Other current liabilities consisted of the following:
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Accrued compensation | $19,631 | $29,638 |
| Accrued severance | 1,635 | 771 |
| Due to related parties | 339 | 643 |
| Current portion of long-term debt | — | 4,542 |
| Short-term contingent consideration liability | 5,353 | 5,444 |
| Short-term warrant liability | — | 1,100 |
| Other | 6,196 | 4,721 |
| Total | $33,154 | $46,859 |
Other liabilities consisted of the following:
| September 30, 2026 | December 31, 2025 | |
|---|---|---|
| Long-term contingent consideration liability | — | 1,570 |
| Other | 71 | 71 |
| Total | $71 | $1,641 |
2024 Sales Agreement
The Company entered into a sales agreement (the “2024 Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) in April 2024, pursuant to which the Company may, but is not obligated to, offer and sell, from time to time, shares of its Class A common stock with an aggregate offering price up to $75.0 million through TD Cowen, as sales agent, subject to the terms and conditions described in the 2024 Sales Agreement and SEC rules and regulations (the “prior ATM offering”). During the nine months ended September 30, 2025, the Company issued 251,367 shares of its Class A common stock in connection with the prior ATM offering at an average price of $106.56 per share. Proceeds received, net of agent fees and other offering expenses, were $25.6 million. During the year ended December 31, 2025, the Company sold the maximum amount of shares in the prior ATM offering which resulted in the automatic termination of the 2024 Sales Agreement.
2025 Sales Agreement
The Company entered into an additional sales agreement (the “2025 Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) in October 2025, pursuant to which the Company may, but is not obligated to, offer and sell, from time to time, shares of its Class A common stock with an aggregate offering price up to $100.0 million through TD Cowen, as sales agent, subject to the terms and conditions described in the 2025 Sales Agreement and SEC rules and regulations (the “ATM offering”). During the year ended December 31, 2025, the Company issued 147,583 shares of its Class A common stock in connection with this ATM offering at an average price of $147.44 per share and the proceeds received, net of agent fees and other offering expenses, were $21.1 million. The Company didnot issue any shares of its Class A common stock in connection with this ATM offering during the nine months ended September 30, 2026. As of September 30, 2026, approximately $78.2 million of capacity remained available under this ATM offering.
- Segment Reporting
The Company’s structure is aligned with how the chief operating decision maker (“CODM”) reviews the business, makes investing and resource allocation decisions and assesses operating performance. The Company’s CODM is its Chief Executive Officer.
Previously, the Company identified three operating segments: GeneDx, Fabric Genomics and Legacy Sema4. The GeneDx operating segment primarily provides pediatric and rare disease diagnostics with a focus on whole exome and genome sequencing, as well as certain data and information services. The GeneDx operating segment was previously identified as the Company’sone reportable segment, while the Fabric Genomics and Legacy Sema4 operating segments did not meet the quantitative thresholds for reportable segments and were collectively reported in Other.
Effective in the second quarter of 2026, as a result of changes in the Company’s commercial strategy and go-to-market execution, the CODM began managing and evaluating the business on a consolidated basis and no longer reviews the operations of GeneDx, Fabric Genomics, and Legacy Sema4 as separate operating segments. Legacy Sema4 no longer conducts substantive operating activities and is not managed or evaluated as a separate component of the business. Accordingly, the Company determined that these operations now constitute a single operating segment, GeneDx, which is also the Company’sone reportable segment as of September 30, 2026. Prior period segment information has been recast to conform to the current presentation.
The CODM evaluates segment performance based on consolidated net loss, adjusted gross profit, adjusted gross margin, and adjusted net income. As such, net loss, which is reported and reconciled with all significant segment expenses in the condensed consolidated statements of operations and comprehensive loss, is the measure of segment profit or loss most consistent with U.S. GAAP that is regularly reviewed by the CODM to allocate resources and assess performance. Adjusted gross profit, adjusted gross margin, and adjusted net income are additional measures of segment profit or loss.
Adjusted gross profit is a non-GAAP financial measure that the Company defines as revenue less cost of services, excluding depreciation and amortization expense, stock-based compensation expense, and restructuring costs. The Company defines adjusted gross margin as adjusted gross profit divided by revenue.
The following is a reconciliation of adjusted gross profit to gross profit and net loss for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Revenue | $123,101 | $116,743 | $339,795 | $306,550 |
| Adjusted cost of services | 34,965 | 30,623 | 101,034 | 88,227 |
| Adjusted gross profit | $88,136 | $86,120 | $238,761 | $218,323 |
| Adjusted gross margin | 71.6% | 73.8% | 70.3% | 71.2% |
| Reconciliations: | ||||
| Depreciation and amortization | $1,687 | $1,374 | $4,875 | $3,838 |
| Stock-based compensation | 371 | 219 | 1,312 | 580 |
| Restructuring charges | 18 | — | 65 | — |
| Gross profit | $86,060 | $84,527 | $232,509 | $213,905 |
| Gross margin | 69.9% | 72.4% | 68.4% | 69.8% |
| Operating expenses, net | 96,488 | 87,778 | 286,576 | 212,747 |
| Impairment loss | — | — | 31,287 | — |
| (Loss) income from operations | (10,428) | (3,251) | (85,354) | 1,158 |
| Total non-operating expense, net | (1,873) | (4,137) | (7,624) | (4,065) |
| Loss before income taxes | (12,301) | (7,388) | (92,978) | (2,907) |
| Income tax expense | (26) | (247) | (405) | (448) |
| Net loss | $(12,327) | $(7,635) | $(93,383) | $(3,355) |
Adjusted net income is a non-GAAP financial measure that the Company defines as net loss adjusted for depreciation and amortization, stock-based compensation expenses, restructuring costs, change in fair value of financial liabilities, interest expense (net), non-core lease costs, impairment loss, loss on extinguishment of debt, income tax expense, transaction costs, third party advisor fees related to our revenue cycle transformation and costs related to a legal reserve.
The following is a reconciliation of net loss to adjusted net income for the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Net loss | $(12,327) | $(7,635) | $(93,383) | $(3,355) |
| Depreciation and amortization expense | 6,895 | 6,474 | 20,418 | 18,343 |
| Stock-based compensation expense | 8,253 | 10,586 | 23,591 | 22,382 |
| Restructuring costs | 867 | 128 | 4,601 | 759 |
| Change in fair value of financial liabilities | — | 3,401 | (2,760) | 2,320 |
| Interest expense, net | 1,779 | 562 | 3,681 | 2,019 |
| Non-core lease costs(1) | 1,169 | 1,323 | 3,476 | 4,209 |
| Impairment loss | — | — | 31,287 | — |
| Loss on extinguishment of debt | — | — | 6,565 | — |
| Other(2) | 1,975 | 1,219 | 3,316 | (5,059) |
| Adjusted net income | $8,611 | $16,058 | $792 | $41,618 |
(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.
(2)For the three and nine months ended September 30, 2026, represents income tax expense, net, costs related to certain litigation matters, and third party advisor fees related to our revenue cycle transformation. For the three and nine months ended September 30, 2025, represents income tax expense, net, transaction costs associated with the Merger Agreement, and a sales-and-use tax refund.
The CODM does not evaluate segment performance using asset information. The measure of segment assets is reported as total assets on the condensed consolidated balance sheets.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.