GeneDx Holdings Corp.

Previous wording

We believe several important factors have impacted, and will continue to impact, our performance and results of operations. While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See the section titled “Item 1A. Risk Factors” in this Quarterly Report and in our 2024 Form 10-K and our Quarterly Report for the quarterly period ended March 31, 2025, which are incorporated by reference in this Quarterly Report, for further information.

Current wording

We believe several important factors have impacted, and will continue to impact, our performance and results of operations. While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See the section titled “Item 1A. Risk Factors” in this Quarterly Report and in our 2024 Form 10-K and our Quarterly Reports for the quarterly periods ended March 31, 2025 and June 30, 2025, which are incorporated by reference in this Quarterly Report, for further information.

Previous wording

We believe the number of resulted exome and genome tests in any period is important and useful to investors because it directly correlates with long-term patient relationships and the size of our genomic database. During the three months ended June 30, 2025, we resulted 23,102 exome and genome tests, which represented 41% of all test results, compared to the three months ended June 30, 2024, in which we resulted approximately 18,017 exome and genome tests, which represented 31% of all test results. During the six months ended June 30, 2025, we resulted 43,664 exome and genome tests, which represented 41% of all test results, compared to the six months ended June 30, 2024, in which we resulted approximately 34,609 exome and genome tests, which represented 31% of all test results.

Current wording

We believe the number of resulted exome and genome tests in any period is important and useful to investors because it directly correlates with long-term patient relationships and the size of our genomic database. During the three months ended September 30, 2025, we resulted 25,702 exome and genome tests, which represented 43% of all test results, compared to the three months ended September 30, 2024, in which we resulted approximately 19,262 exome and genome tests, which represented 33% of all test results. During the nine months ended September 30, 2025, we resulted 69,510 exome and genome tests, which represented 41% of all test results, compared to the nine months ended September 30, 2024, in which we resulted approximately 53,871 exome and genome tests, which represented 31% of all test results.

Previous wording

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

Current wording

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

Previous wording

Diagnostic test revenue increased by $30.4 million, or 44%, to $99.8 million for the three months ended June 30, 2025, from $69.4 million for the three months ended June 30, 2024. The increase primarily reflected an increase of 69% in whole exome and genome sequencing revenues driven by a 28% increase in test volumes.

Current wording

Diagnostic test revenue increased by $36.1 million, or 47%, to $113.5 million for the three months ended September 30, 2025, from $77.4 million for the three months ended September 30, 2024. The increase primarily reflected an increase of 65% in whole exome and genome sequencing revenues driven by a 33% increase in test volumes and improvements in exome and genome average reimbursement rates.

Previous wording

Other revenue increased by $1.8 million, or 77%, to $4.2 million for the six months ended June 30, 2025, from $2.4 million for the six months ended June 30, 2024. The increase reflects $0.9 million of revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs.

Current wording

Other revenue increased by $3.8 million, to $3.2 million for the three months ended September 30, 2025. The increase primarily reflects $1.7 million of revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs. In addition, the prior year period included a negative adjustment in partnership revenues from our data business.

Previous wording

Gross profit increased by $28.0 million or 65%, to $70.9 million for the three months ended June 30, 2025, from $43.0 million for the three months ended June 30, 2024, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.

Current wording

Gross profit increased by $36.7 million or 77%, to $84.5 million for the three months ended September 30, 2025, from $47.8 million for the three months ended September 30, 2024, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.

Previous wording

Research and development expense increased by $4.2 million, or 38%, to $15.1 million for the three months ended June 30, 2025, from $10.9 million for the three months ended June 30, 2024. The increase was driven by higher overall compensation costs of $3.4 million, which reflects an investment to expand our product development team and the research and development costs of Fabric Genomics. In addition, the prior period included a benefit of $1.1 million to reverse stock-based compensation expense associated with forfeitures of unvested equity awards of terminated employees.

Current wording

Research and development expense increased by $8.2 million, or 70%, to $19.8 million for the three months ended September 30, 2025, from $11.7 million for the three months ended September 30, 2024. The increase was driven by higher overall compensation costs of $7.4 million, which primarily reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics.

Previous wording

Selling and marketing expense increased by $2.9 million, or 17%, to $19.4 million for the three months ended June 30, 2025, from $16.6 million for the three months ended June 30, 2024. This primarily reflects our investment to support growth in our commercial team, as well as the selling and marketing costs of Fabric Genomics.

Current wording

Selling and marketing expense increased by $6.5 million, or 38%, to $23.5 million for the three months ended September 30, 2025, from $17.0 million for the three months ended September 30, 2024. This increase primarily reflects our investment to support growth in our commercial team, as well as the inclusion of selling and marketing costs of Fabric Genomics.

Previous wording

General and administrative expense increased by $10.1 million, or 20%, to $59.5 million for the six months ended June 30, 2025, from $49.5 million for the six months ended June 30, 2024. The increase was primarily attributable to increased compensation related costs of $11.9 million, higher IT software and infrastructure costs of $3.1 million, higher legal costs of $2.8 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting. These increases were partially offset by a one-time sales-and-use tax refund of $8.4 million.

Current wording

General and administrative expense increased by $17.5 million, or 65%, to $44.4 million for the three months ended September 30, 2025, from $26.9 million for the three months ended September 30, 2024. The increase was primarily attributable to increased compensation related costs of $10.1 million, higher legal and third-party consultant costs of $3.8 million and higher IT software and infrastructure costs of $2.0 million.

Previous wording

See Note 5, “Fair Value Measurements” to our condensed consolidated financial statements for further information on the changes in fair value of our warrants and contingent liabilities.

Current wording

See Note 5, “Fair Value Measurements” to our condensed consolidated financial statements for further information on the changes in fair value of our financial liabilities.

Previous wording

Total revenue increased by $32.2 million, or 46%, to $102.7 million for the three months ended June 30, 2025, from $70.5 million for the three months ended June 30, 2024.

Current wording

Total revenue increased by $96.7 million, or 46%, to $306.6 million for the nine months ended September 30, 2025, from $209.8 million for the nine months ended September 30, 2024.

Previous wording

Diagnostic test revenue increased by $55.0 million, or 42%, to $185.6 million for the six months ended June 30, 2025, from $130.5 million for the six months ended June 30, 2024. The increase is attributable to increase of 66% in whole exome and genome sequencing revenues driven by a 26% increase in test volumes and a 32% increase in average reimbursement rates. This was partially offset by declines in other non-exome test revenues.

Current wording

Diagnostic test revenue increased by $91.4 million, or 44%, to $299.4 million for the nine months ended September 30, 2025, from $208.0 million for the nine months ended September 30, 2024. The increase is attributable to increase of 66% in whole exome and genome sequencing revenues driven by a 29% increase in test volumes and a 29% increase in average reimbursement rates. This was partially offset by declines in other non-exome test revenues.

Previous wording

Other revenue increased by $1.8 million or 167%, to $2.9 million for the three months ended June 30, 2025, from $1.1 million for the three months ended June 30, 2024. The increase reflects $0.9 million of revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs.

Current wording

Other revenue increased by $5.3 million, to $7.2 million for the nine months ended September 30, 2025, from $1.8 million for the nine months ended September 30, 2024. The increase reflects $2.3 million of revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs.

Previous wording

Gross profit increased by $49.0 million for the six months ended June 30, 2025, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.

Current wording

Gross profit increased by $85.7 million for the nine months ended September 30, 2025, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.

Previous wording

Research and development expense increased by $5.2 million, or 23%, to $27.7 million for the six months ended June 30, 2025, from $22.5 million for the six months ended June 30, 2024. The increase was primarily attributable to compensation related costs of $7.0 million which reflects an investment to expand our product development team and the research and development costs of Fabric Genomics. The increase was partially offset by lower costs associated with the Guardian newborn screening study.

Current wording

Research and development expense increased by $13.4 million, or 39%, to $47.5 million for the nine months ended September 30, 2025, from $34.1 million for the nine months ended September 30, 2024. The increase was primarily attributable to compensation related costs of $14.4 million which reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics. The increase was partially offset by lower costs associated with the Guardian newborn screening study of $1.5 million.

Previous wording

Selling and marketing expense increased by $5.1 million, or 16%, to $37.8 million for the six months ended June 30, 2025, from $32.7 million for the six months ended June 30, 2024. The increase was primarily attributable to higher compensation related costs of $4.5 million which reflects our investment to support growth in our commercial team, as well as the selling and marketing costs of Fabric Genomics.

Current wording

Selling and marketing expense increased by $11.6 million, or 23%, to $61.3 million for the nine months ended September 30, 2025, from $49.7 million for the nine months ended September 30, 2024. The increase was primarily attributable to higher compensation related costs of $9.5 million which reflects our investment to support growth in our commercial team, as well as the inclusion of selling and marketing costs of Fabric Genomics.

Previous wording

General and administrative expense increased by $1.4 million, or 5%, to $27.4 million for the three months ended June 30, 2025, from $26.0 million for the three months ended June 30, 2024. The increase was primarily attributable to increased compensation related costs of $5.0 million, higher IT software and infrastructure costs of $2.9 million, higher legal costs of $1.3 million, and increased amortization expense for acquired intangible assets established in connection with purchase accounting. These increases were partially offset by a one-time sales-and-use tax refund of $8.4 million.

Current wording

General and administrative expense increased by $27.6 million, or 36%, to $104.0 million for the nine months ended September 30, 2025, from $76.4 million for the nine months ended September 30, 2024. The increase was primarily attributable to increased compensation related costs of $21.9 million, higher IT software and infrastructure costs of $5.2 million, higher legal and audit-related costs of $6.1 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting. These increases were partially offset by a one-time sales-and-use tax refund of $8.4 million.

Previous wording

Non-operating income (expense), net, improved by $25.5 million.The current year period included a gain of $2.0 million for the change in the fair value of public and private warrants, partially offset by expense of $0.9 million for the change in fair value of the contingent consideration. The prior year period primarily included legal reserves, net of insurance, of approximately $13.4 million, and non-cash charges of $5.1 million associated with the exercise of the Perceptive Warrant exercised and $5.4 million driven by the increase in fair value of our public and private placement warrants and Perceptive Warrant driven primarily by the increase in our share price.

Current wording

Non-operating expense, net, improved by $22.0 million. This was driven by prior period activities which included legal reserves, net of insurance, of approximately $12.1 million and non-cash charges of $10.1 million associated with the exercise of the Perceptive Warrants.

Previous wording

The following is a reconciliation of gross profit to our adjusted gross profit and of our gross margin to adjusted gross margin for the three and six months ended June 30, 2025 and 2024:

Current wording

The following is a reconciliation of gross profit to our adjusted gross profit and of our gross margin to adjusted gross margin for the three and nine months ended September 30, 2025 and 2024:

Previous wording

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

Current wording

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

Previous wording

The following is a reconciliation of our net income (loss) to adjusted net income (loss) for the three and six months ended June 30, 2025 and 2024:

Current wording

The following is a reconciliation of our net loss to adjusted net income (loss) for the three and nine months ended September 30, 2025 and 2024:

Previous wording

(1)For the three and six months ended June 30, 2025, represents interest expense, net, income tax expense, net, transaction costs associated with the Merger Agreement and a sales-and-use tax refund. For the three and six months ended June 30, 2024, represents interest expense, net, income tax benefit, net, and reserves net of insurance for a certain litigation matter.

Current wording

(1)For the three and nine months ended September 30, 2025, represents interest expense, net, income tax expense, net, transaction costs associated with the Merger Agreement and a sales-and-use tax refund. For the three and nine months ended September 30, 2024, represents interest expense, net, income tax benefit, net, and reserves net of insurance for a certain litigation matter.

Previous wording

As of June 30, 2025, our existing cash and cash equivalents and available-for-sale marketable securities were $134.6 million.

Current wording

As of September 30, 2025, our existing cash and cash equivalents and available-for-sale marketable securities were $155.1 million.

Previous wording

We have an effective shelf registration statement that we filed with the SEC in August of 2022, registering $300.0 million shares of our Class A common stock and other securities, and we may file a new shelf registration statement with the SEC to replace the existing registration statement and replenish the amount of securities registered. As of June 30, 2025, approximately $87.8 million of securities remained available under this registration statement. Further, we have entered into a sales agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) pursuant to which we may, but are not obligated to, offer and sell, from time to time, shares of our 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 Sales Agreement and SEC rules and regulations (our “ATM offering”). As of June 30, 2025, approximately $12.4 million of capacity remained available under this ATM offering.

Current wording

We previously had an effective shelf registration statement that registered $300.0 million shares of Class A common stock and other securities, which expired in September 2025. We intend to file a new automatic shelf registration statement with the SEC registering shares of our Class A common stock and other securities to replace our prior shelf registration statement.

Previous wording

As discussed in the notes to our condensed consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of June 30, 2025, remaining payments due to the payor were $12.0 million. For more information regarding this matter, see Note 3, “Revenue Recognition” to our consolidated financial statements included in our 2024 Form 10-K and Note 4, “Revenue Recognition,” to our condensed consolidated financial statements included within this Quarterly Report, respectively.

Current wording

As discussed in the notes to our condensed consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of September 30, 2025, remaining payments due to the payor were $12.0 million, with $10.0 million due prior to December 31, 2025. For more information regarding this matter, see Note 3, “Revenue Recognition” to our consolidated financial statements included in our 2024 Form 10-K and Note 4, “Revenue Recognition,” to our condensed consolidated financial statements included within this Quarterly Report, respectively.

Previous wording

Our critical accounting policies and estimates are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the 2024 Form 10-K. Except as disclosed in Note 2, “Summary of Significant Accounting Policies” to our condensed consolidated financial statements included in this Quarterly Report, there have been no material changes to our critical accounting policies and estimates in the current period.

Current wording

Our critical accounting policies and estimates are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the 2024 Form 10-K. Except as disclosed in Note 2, “Summary of Significant

Previous wording

Net cash used in operating activities during the six months ended June 30, 2024 was $20.9 million, driven by lower cash expenditures associated with the current year period net loss as compared with the prior year period, which reflected improved gross margin profitability, as well as the realization of cost savings from exiting the Legacy Sema4 business and other cost reduction initiatives.

Current wording

Net cash used in operating activities during the nine months ended September 30, 2024 was $25.3 million, driven by lower cash expenditures associated with the current year period net loss as compared with the prior year period, which reflected improved gross margin profitability, as well as the realization of cost savings from exiting the Legacy Sema4 business and other cost reduction initiatives.

Previous wording

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

Current wording

Net cash used in investing activities during the nine months ended September 30, 2025 was $50.4 million, which included $33.2 million for the acquisition of Fabric Genomics, purchases of marketable securities of $36.5 million and property and equipment of $14.7 million, partially offset by $34.0 million in proceeds from the maturities of marketable securities.

Previous wording

Net cash used in investing activities during the six months ended June 30, 2024 was $21.9 million, which included net purchases of marketable securities of $29.4 million and property and equipment of $1.8 million, partially offset by $9.3 million in proceeds from the sales and maturities of marketable securities.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2024 was $29.6 million, which included net purchases of marketable securities of $52.7 million and property and equipment of $2.4 million, partially offset by $25.6 million in proceeds from the sales and maturities of marketable securities.

Previous wording

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

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2025 was $24.8 million, which primarily reflected proceeds from our prior at-the-market (“prior ATM offering”) of $25.6 million.