Caris Life Sciences, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in Item 1 of in this Quarterly Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Quarterly Report. See the section titled “Special Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless context requires otherwise, references to “we,” “us,” “our,” “Caris,” or “the Company” here refer to Caris Life Sciences, Inc. together with its wholly owned subsidiaries.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in Item 1 of in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025. See the section titled “Special Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless context requires otherwise, references to “we,” “us,” “our,” “Caris,” or “the Company” here refer to Caris Life Sciences, Inc. together with its wholly owned subsidiaries.

Previous wording

We founded Caris in 2008 with the belief and vision that combining a vast set of consistently generated molecular information with robust data-driven insights could realize the potential of precision medicine for patients. We have spent the last 17 years developing and building our portfolio of comprehensive, proprietary molecular profiling solutions and generating what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology based on the millions of tests we have run on over 959,000 cases. Our platform is purpose-built to leverage the convergence of next-generation sequencing (“NGS”), artificial intelligence (“AI”) and machine learning (“ML”) technologies, and high-performance computing. The power of our differentiated Caris platform has enabled us to develop the latest generation of advanced precision medicine diagnostic solutions designed to address the entire cancer care continuum, including early detection, minimal residual disease (“MRD”) tracking, therapy selection, and treatment monitoring, as well as to create molecular signatures and discover and develop novel precision medicine therapeutics.

Current wording

We founded Caris in 2008 with the belief and vision that combining a vast set of consistently generated molecular information with robust data-driven insights could realize the potential of precision medicine for patients. We have spent the last 18 years developing and building our portfolio of comprehensive, proprietary molecular profiling solutions and generating what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology based on tests we have run on over 1,070,000 cases as of March 31, 2026. Our Caris Molecular Intelligence platform is purpose-built to leverage the convergence of next-generation sequencing (“NGS”), artificial intelligence (“AI”) and machine learning (“ML”) technologies, and high-performance computing. The power of our differentiated Caris platform has enabled us to develop the latest generation of advanced precision medicine diagnostic solutions designed to address the entire cancer care continuum, including early detection, minimal residual disease (“MRD”) tracking, therapy selection, and treatment monitoring, as well as to create molecular signatures and discover and develop novel precision medicine therapeutics.

Previous wording

Our current commercial product portfolio consists of MI Profile, our tissue-based molecular profiling solution that has generated the majority of our revenue to date, and Caris Assure, our novel, universal blood-based molecular profiling solution that was broadly launched in the first quarter of 2024 for therapy selection. Our purpose-built, proprietary multi-omic profiling solutions capture and analyze molecular information from tissue and blood in a comprehensive manner. We believe this approach best positions us to provide actionable treatment pathways from targeted therapies to drive superior clinical outcomes for patients while also generating a rich dataset to power insights and innovation. Our molecular profiling solutions and the data generated by our multi-omic technology platform also provide value to our biopharma partners, such as Moderna, AbbVie, Xencor, and Merck KGaA, through partnerships that aim to increase the probability of technical and regulatory success of their therapeutic pipelines.

Current wording

Our Molecular Intelligence product portfolio consists of our MI Profile Platform, our whole exome sequencing (“WES”)/whole transcriptome sequencing (“WTS”) tissue-based molecular profiling solutions that have generated the majority of our revenue to date, our Caris Assure Platform, our WES/WTS blood-based molecular profiling solutions, and our Precision Whole Genome Platform, our whole genome sequencing (“WGS”) blood- and tissue-based profiling solutions. Our purpose-built, proprietary multi-omic profiling solutions capture and analyze molecular information from tissue and blood in a comprehensive manner. We believe this approach best positions us to provide actionable treatment pathways from targeted therapies to drive superior clinical outcomes for patients while also generating a rich dataset to power insights and innovation. Our molecular profiling solutions and the data generated by our multi-omic technology platform also provide value to our biopharma partners, such as Moderna, AbbVie, Xencor, Merck KGaA and Genentech, through partnerships that aim to increase the probability of technical and regulatory success of their therapeutic pipelines.

Previous wording

To our knowledge, we remain the only genomic profiling company to consistently utilize whole exome sequencing (“WES”) and whole transcriptome sequencing (“WTS”) as standard practice on every eligible patient sample. Our in-depth profiling of patient samples has led to the creation of what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology.

Current wording

To our knowledge, we remain the only genomic profiling company to consistently utilize WES and WTS as standard practice on every eligible patient sample. Our in-depth profiling of patient samples has led to the creation of what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology.

Previous wording

Our global annual clinical case volume has been growing rapidly, with year-over-year growth of 29% in 2022, 32% in 2023, 26% in 2024, and 23% through the third quarter of 2025. With our broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024 and the FDA approval of MI Cancer Seek as a companion diagnostic in the fourth quarter of 2024 followed by the broad commercial launch of MI Cancer Seek in the first quarter of 2025 as the NGS component of MI Profile, we believe that increased profiling volumes will meaningfully contribute to our growth in 2025 and beyond.

Current wording

With our broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024 and the FDA approval of MI Cancer Seek as a companion diagnostic in the fourth quarter of 2024 followed by the broad commercial launch of MI Cancer Seek in the first quarter of 2025 as the NGS component of the MI Profile Platform, we believe that increased profiling volumes will meaningfully contribute to our growth in 2026 and beyond.

Previous wording

Our Caris platform is designed to create a virtuous cycle that can enable continued innovation and improved impact for patients and physicians. We believe our comprehensive approach to profiling will continue to drive demand for our genomic profiling capabilities, leading to further expansion of our clinico-genomic datasets, which provide additional valuable inputs to develop and enhance our solutions, with the ultimate goal of contributing to improved patient results. This continuous feedback loop enabled us to develop Caris Assure, which utilized genomic data generated by MI Profile to inform our blood-based bioinformatics algorithms, allowing us to detect previously unknown features and signals in the blood that provide advanced insights into disease development. We believe we will be able to further leverage this process to continue meaningful innovation in precision oncology as well as other chronic disease states, including cardiology, neurology, and metabolic conditions.

Current wording

Our Caris platform is designed to create a virtuous cycle that can enable continued innovation and improved impact for patients and physicians. We believe our comprehensive approach to profiling will continue to drive demand for our genomic profiling capabilities, leading to further expansion of our clinico-genomic datasets, which provide additional valuable inputs to develop and enhance our solutions, with the ultimate goal of contributing to improved patient results. This continuous feedback loop enabled us to develop the Caris Assure Platform, which utilized genomic data generated by the MI Profile Platform to inform our blood-based bioinformatics algorithms, allowing us to detect previously unknown features and signals in the blood that provide advanced insights into disease development. We believe we will be able to further leverage this process to continue meaningful innovation in precision oncology as well as other chronic disease states, including cardiology, neurology, and metabolic conditions.

Previous wording

For the three months ended September 30, 2025 and 2024, we generated total revenue of $216.8 million and $101.6 million, respectively, and incurred net income (loss) of $24.3 million and $(67.7) million, respectively. For the nine months ended September 30, 2025 and 2024, we generated total revenue of $519.1 million and $282.3 million, respectively, and incurred net losses of $150.0 million and $244.9 million, respectively. Our Adjusted EBITDA was $51.2 million and $(45.6) million for the three months ended September 30, 2025 and 2024, respectively, and $31.7 million and $(166.6) million for the nine months ended September 30, 2025 and 2024. While we have achieved net profit for the three months ended September 30, 2025, we may incur net losses in the near future, and our expenses will increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to drive market adoption of our solutions. These investments, together with general and administrative expenses, have resulted in positive (negative) cash flows from operations of $38.4 million and $(206.3) million for the nine months ended September 30, 2025 and 2024, respectively. Our free cash flow was $27.2 million and $(212.4) million for the nine months ended September 30, 2025 and 2024, respectively. For additional information regarding Adjusted EBITDA and free cash flow, non-GAAP financial measures, see “—Non-GAAP Financial Measures.” Additionally, as of September 30, 2025, we had cash, cash equivalents, restricted cash and marketable securities of $759.3 million, and the aggregate principal amount of debt outstanding under our existing term loan was $400.0 million. For additional information regarding our liquidity and capital resources, see “—Liquidity and Capital Resources.”

Current wording

For the three months ended March 31, 2026 and 2025, we generated total revenue of $216.2 million and $120.9 million, respectively, and incurred net loss of $0.5 million and $102.6 million, respectively. Our Adjusted EBITDA was $26.2 million and $(36.2) million for the three months ended March 31, 2026 and 2025, respectively. While we have achieved net profit for the three months ended September 30, 2025 and December 31, 2025, we may continue to incur net losses in the near future, and our expenses are expected to increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to launch and drive market adoption of our solutions. Cash flow from operations was $32.9 million and $(31.3) million for the three months ended March 31, 2026 and 2025, respectively. Our free cash flow was $22.5 million and $(34.0) million for the three months ended March 31, 2026 and 2025, respectively. For additional information regarding Adjusted EBITDA and free cash flow, each non-GAAP financial measures, see “—Non-GAAP Financial Measures.” Additionally, as of March 31, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $825.7 million, and the aggregate principal amount of debt outstanding under our existing term loan was $400.0 million. For additional information regarding our liquidity and capital resources, see “—Liquidity and Capital Resources.”

Previous wording

We believe that our operating performance and future success depend on a number of factors that present significant opportunities for us and may pose risks and challenges, including those discussed below and in the “Risk Factors” section of this Quarterly Report.

Current wording

We believe that our operating performance and future success depend on a number of factors that present significant opportunities for us and may pose risks and challenges, including those discussed below and in the “Risk Factors” section of this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

•Market acceptance and commercial success of our solutions. Our success and future growth will depend on maintaining and expanding market acceptance of our molecular profiling solutions along with commercial success of these solutions across existing and new customers. Our MI Profile and Caris Assure case volumes have continued to increase over time. Changes in our case volumes and the pricing of our solutions, however, are generally not impacted by the cancer type. For the three months ended September 30, 2025 and 2024, the number of clinical cases was 50,763 and 42,956, respectively. For the nine months ended September 30, 2025 and 2024, the number of clinical cases was 146,653 and 118,856, respectively. We commercially launched our MI Cancer Seek solution in January 2025 as the WES/WTS NGS component of MI Profile. We initiated the broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024, and realizing the potential of Caris Assure across the cancer treatment continuum is a key component of our business strategy. The commercial success of Caris Assure will depend upon, among other things, additional clinical trials that demonstrate the effectiveness of Caris Assure, particularly for early detection, multi-cancer early detection (“MCED”), MRD tracking, and treatment monitoring, and the continued adoption of Caris Assure by patients, the medical community, and third-party payers. In addition, we expect that our ability to maintain and expand our sales, marketing, and distribution capabilities to support the increased adoption of our molecular profiling solutions will play a key factor in our success.

Current wording

•Market acceptance and commercial success of our solutions. Our success and future growth will depend on maintaining and expanding market acceptance of our current and future molecular profiling solutions along with commercial success of these solutions across existing and new customers. Our MI Profile and Caris Assure case volumes have continued to increase over time. Changes in our case volumes and the pricing of our solutions, however, are generally not impacted by the cancer type. For the three months ended March 31, 2026 and 2025, the number of clinical cases was 52,800 and 45,900, respectively. We commercially launched our MI Cancer Seek solution in January 2025 as the WES/WTS NGS component of our MI Profile platform. We initiated the broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024. Realizing the potential of Caris Assure and our future solutions, including Caris Detect, across the cancer treatment continuum is a key component of our business strategy. The commercial success of our solutions will depend upon, among other things, additional validation studies and clinical trials that demonstrate the effectiveness of our solutions, particularly for early detection, multi-cancer early detection (“MCED”), MRD tracking, and treatment monitoring, and the continued adoption of Caris Assure and the adoption of our other solutions, including Caris Detect, by patients, the medical community, and third-party payers. In addition, we expect that our ability to maintain and expand our sales, marketing, and distribution capabilities to support the increased adoption of our molecular profiling solutions will be a key factor in our success.

Previous wording

•Biopharma partners. Our revenue also depends on our ability to maintain and expand relationships with our biopharma partners and attract new biopharma partners. As we continue to develop these relationships, we expect to support a growing number of projects and continue to have opportunities to offer our platform to such customers for development and research services. For the three months ended September 30, 2025 and the nine months ended September 30, 2025, our year-over-year growth in pharma research and development services revenue has been 18% and 25%, respectively.

Current wording

•Biopharma partners. Our revenue also depends on our ability to maintain and expand relationships with our biopharma partners and attract new biopharma partners. As we continue to develop these relationships, we expect to support a growing number of projects and continue to have opportunities to offer our platform to such customers for development and research services.

Previous wording

•Payer coverage and reimbursements. Our revenue and future revenue growth will depend on our success in achieving broad coverage and adequate reimbursement for our solutions from third-party payers. Coverage and reimbursement by third-party payers, including managed care organizations, private health insurers, and government healthcare programs for the types of solutions we offer can be limited and uncertain and may depend on a number of factors, including a payer’s determination that a product is appropriate, medically necessary, and cost-effective. Each payer will make its own decision as to whether to establish a policy or enter into a contract to cover our products and the amount it will reimburse for such products. While the average selling prices (“ASPs”) for Caris Assure, MI Tumor Seek Hybrid and MI Cancer Seek reimbursed by a particular payer are determined by our arrangements with that payer and do not materially differ by cancer type, any fluctuation or differences in coverage and reimbursement among our third-party payers may impact our overall ASPs and gross margins. Moreover, if we are unable to obtain and/or maintain broad coverage and adequate reimbursement for our solutions from third-party payers, we may not be able to effectively increase our clinical case volume and our revenue would be impacted.

Current wording

•Payer coverage and reimbursements. Our revenue and future revenue growth will depend on our success in achieving broad coverage and adequate reimbursement for our solutions from third-party payers. Coverage and reimbursement by third-party payers, including managed care organizations, private health insurers, and government healthcare programs for the types of solutions we offer can be limited and uncertain and may depend on a number of factors, including a payer’s determination that a product is appropriate, medically necessary, and cost-effective. Each payer will make its own decision as to whether to establish a policy or enter into a contract to cover our products and the amount it will reimburse for such products. While the average selling prices (“ASPs”) for our solutions reimbursed by a particular payer are determined by our arrangements with that payer and do not materially differ by cancer type, any fluctuation or differences in coverage and reimbursement among our third-party payers may impact our overall ASPs and gross margins. Moreover, if we are unable to obtain and/or maintain broad coverage and adequate reimbursement for our solutions from third-party payers, we may not be able to effectively increase our clinical case volume and our revenue would be impacted.

Previous wording

•Scaling infrastructure to meet increasing demand. Our financial results are also dependent upon our ability to support current and future levels of demand for our solutions, including MI Profile and Caris Assure. As the volumes of our current and new molecular profiling solutions continue to grow, we will need to simultaneously increase our capacity for sample intake and storage, enhance our customer service, improve our billing and general processes, expand our internal quality assurance programs, incorporate new equipment, implement new technology systems and processes, expand laboratory capacity, and otherwise extend our operational capabilities to support comprehensive genomic analyses at a larger scale while retaining expected turnaround times. This may result in us purchasing additional equipment, constructing additional facilities, hiring additional qualified labor, and implementing new systems, technology, controls, and procedures. As such, our capital expenditures and cost of services may increase as we continue our efforts to expand capacity. In addition, revenue may be impacted in the event that we are not able to meet the increase in demand.

Current wording

•Scaling infrastructure to meet increasing demand. Our financial results are also dependent upon our ability to support current and future levels of demand for our solutions, including MI Profile and Caris Assure. As the volumes of our current and new molecular profiling solutions continue to grow, we will need to simultaneously increase our capacity for sample intake and storage, enhance our customer service, improve our billing and general business processes, expand our internal quality assurance programs, incorporate new equipment, implement new technology systems and processes, expand laboratory capacity, and otherwise extend our operational capabilities to support comprehensive genomic analyses at a larger scale while retaining expected turnaround times. This may result in us purchasing additional equipment, constructing additional facilities, hiring additional qualified labor, and implementing new systems, technology, controls, and procedures. As such, our capital expenditures and cost of services may increase as we continue our efforts to expand capacity. In addition, revenue may be impacted in the event that we are not able to meet the increase in demand.

Previous wording

Pharma Research and Development Services Revenue

Current wording

Pharma Research and Development Services

Previous wording

Pharma research and development services revenue is generated from the provision of research and development services for biopharma partners utilizing our Caris platform. Given the nature of these services, each contract may contain multiple performance obligations, such as molecular profiling solutions, target discovery services, and strategic data services. Each performance obligation is analyzed, and revenue is recognized as or when such performance obligations are satisfied. The timing and extent of revenue recognized may vary from contract to contract.

Current wording

Pharma research and development services revenue is generated from the provision of research and development services for biopharma partners utilizing our Caris platform. Given the nature of these services, each contract may contain multiple performance obligations, such as molecular profiling solutions, research services, and strategic data services. Each performance obligation is analyzed, and revenue is recognized as or when such performance obligations are satisfied. The timing and extent of revenue recognized may vary from contract to contract.

Previous wording

Cost of molecular profiling services generally consists of cost of materials, direct labor (including bonus and stock-based compensation), equipment maintenance and depreciation expenses associated with processing cases (including accessioning, sequencing, quality control analyses, and shipping charges to transport samples), and freight. Costs associated with completing the molecular profiling services are recorded as the service is performed, regardless of whether revenue is recognized with respect to the service.

Current wording

(including accessioning, sequencing, quality control analyses, and shipping charges to transport samples), and freight. Costs associated with completing the molecular profiling services are recorded as the service is performed, regardless of whether revenue is recognized with respect to the service.

Previous wording

We believe that our marketing activities continue to drive awareness and differentiate our existing solutions and future solutions. We expect our selling and marketing expenses to continue to increase in absolute dollars as we expand our sales force and continue to grow our presence within and outside of the United States.

Current wording

We believe that our marketing activities continue to drive awareness and differentiate our existing and future solutions. We expect our selling and marketing expenses to continue to increase in absolute dollars as we expand our sales force and continue to grow our presence within and outside of the United States.

Previous wording

We expect to incur additional expenses, primarily due to the additional costs of operating as a public company, which include additional legal, accounting, corporate governance, and investor relations expenses, as well as higher directors’ and officers’ insurance premiums. In addition, as a public company, we also expect to incur increased stock-based compensation expense related to our long-term equity incentive plan.

Current wording

We expect to incur additional expenses, primarily due to the additional costs of operating as a public company, which include additional legal, accounting, corporate governance, and investor relations expenses, as well as higher directors’ and officers’ insurance premiums. In addition, we incur stock-based compensation expense related to our equity incentive plans.

Previous wording

Changes in fair value of financial instruments consists of changes in the fair value of the warrant liability and changes in the fair value of derivative liabilities. Our warrants are classified as a liability on our condensed consolidated balance sheets and re-measured to fair value at each balance sheet date with the corresponding changes in fair value recorded within changes in fair value of financial instruments. All warrants were exercised upon the closing of the IPO.

Current wording

Changes in fair value of financial instruments consists of changes in the fair value of the warrant liability and changes in the fair value of derivative liabilities. Our warrants were classified as a liability on our condensed consolidated balance sheets and re-measured to fair value at each balance sheet date with the corresponding changes in fair value recorded within changes in fair value of financial instruments. All warrants were exercised upon the closing of the IPO.

Previous wording

Other income (expense), net consists of items related to foreign currency gains and losses, debt extinguishment expense and additional immaterial items.

Current wording

Other income (expense), net consists of items related to foreign currency gains and losses, and additional immaterial items.

Previous wording

(1)Costs and operating expenses contains the following stock-based compensation expense:

Current wording

(1)Costs and operating expenses contain the following stock-based compensation expense:

Previous wording

Revenue from clinical cases for patients covered by Medicare represented approximately 46.4% and 39.7% of our molecular profiling services revenue for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

Revenue from clinical cases for patients covered by Medicare represented approximately 41.2% and 54.3% of our molecular profiling services revenue for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Cost of services - Pharma research and development services was $2.3 million for the three months ended September 30, 2025, compared to $2.4 million for the three months ended September 30, 2024, a decrease of $0.1 million, or 2.1%. The decrease was driven primarily by a decrease within costs associated with the research services of $0.1 million.

Current wording

Cost of services - Pharma research and development services was $1.9 million for the three months ended March 31, 2026, compared to $3.0 million for the three months ended March 31, 2025, a decrease of $1.0 million, or 34.3%. The decrease was driven primarily by a decrease in materials and related testing costs of $0.7 million, and a $0.5 million decrease in utilities, rent, and allocated overhead, offset by a decrease in labor costs of $0.4 million.

Previous wording

Gross profit, calculated as total revenue less cost of services, was $147.5 million for the three months ended September 30, 2025, compared to $44.4 million for the three months ended September 30, 2024, an increase of $103.1 million, or 232.1%, primarily due to the increase in molecular profiling services revenue.

Current wording

Gross profit, calculated as total revenue less cost of services, was $141.3 million for the three months ended March 31, 2026, compared to $57.1 million for the three months ended March 31, 2025, an increase of $84.3 million, or 147.7%, primarily due to the increase in molecular profiling services revenue.

Previous wording

Selling and marketing expenses were $41.3 million for the three months ended September 30, 2025, compared to $36.8 million for the three months ended September 30, 2024, an increase of $4.5 million, or 12.3%. This increase was primarily due to a $2.9 million increase in personnel costs to support existing solutions, and a $1.3 million increase in professional services and travel and marketing expenses.

Current wording

Selling and marketing expenses were $45.0 million for the three months ended March 31, 2026, compared to $39.8 million for the three months ended March 31, 2025, an increase of $5.2 million, or 13.1%. This increase was primarily due to a $2.3 million increase in personnel costs to support existing solutions, and a $2.6 million increase in professional services and travel and marketing expenses.

Previous wording

General and administrative expenses were $52.0 million for the three months ended September 30, 2025, compared to $40.9 million for the three months ended September 30, 2024, an increase of $11.1 million, or 27.2%. This increase was primarily due to an increase of $4.3 million in stock-based compensation expense, a $3.9 million increase in labor costs and benefits associated with an expansion of personnel, a $4.1 million increase in consulting, audit and legal professional fees, a $0.8 million increase in insurance expenses, and a $0.8 million increase in travel expenses, offset by a $2.6 million decrease in depreciation expense.

Current wording

General and administrative expenses were $59.7 million for the three months ended March 31, 2026, compared to $52.1 million for the three months ended March 31, 2025, an increase of $7.6 million, or 14.6%. This increase was primarily due to a $3.2 million increase in labor costs and benefits associated with an expansion of personnel, a $2.7 million increase in consulting, audit and legal professional fees primarily due to the increased costs of operating as a public company, a $0.7 million increase in insurance expenses, a $0.8 million increase in utilities expenses, a $0.8 million increase in software licensing expenses, a $2.0 million increase in indirect tax expenses, a $0.8 million increase in rent expenses, and a $0.7 million increase in recruiting expenses, offset by a $1.3 million decrease in depreciation expense, and a $3.2 million decrease in stock-based compensation expense, which is primarily due to a one-time modification expense recorded for the three months ended March 31, 2025.

Previous wording

Research and development expenses were $21.6 million for the three months ended September 30, 2025, compared to $27.6 million for the three months ended September 30, 2024, a decrease of $6.0 million, or 21.8%. The decrease was primarily driven by a reduction of $6.2 million in material and reference testing costs associated with the development of Caris Assure and FDA submission of MI Cancer Seek, and a $0.6 million reduction in allocated overhead, offset by an increase of $1.4 million in labor costs, benefits and stock-based compensation.

Current wording

Research and development expenses were $31.3 million for the three months ended March 31, 2026, compared to $23.1 million for the three months ended March 31, 2025, an increase of $8.2 million, or 35.8%. The increase was primarily driven by an increase of $4.9 million in material and reference testing costs associated with higher product development testing, a $1.1 million increase in depreciation expense, a $0.9 million increase in stock-based compensation, a $3.0 million increase in utilities expenses, offset by a $0.4 million reduction in allocated overhead, and a $1.1 million reduction in biorepository collection fees.

Previous wording

We define Adjusted EBITDA as net loss, adjusted to exclude interest income, interest expense, changes in fair value of financial instruments, other expense, net, the provision for (benefit from) income taxes, depreciation and amortization, and stock-based compensation expense.

Current wording

We define Adjusted EBITDA as net loss, adjusted to exclude interest income, interest expense, changes in fair value of financial instruments, other expense, net, income tax benefit, depreciation and amortization, and stock-based compensation expense.

Previous wording

The following table provides a reconciliation of net income (loss), the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA for the periods presented:

Current wording

The following table provides a reconciliation of net loss, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA for the periods presented:

Previous wording

We define free cash flow as net cash used in operating activities less purchases of property and equipment. We believe free cash flow is a useful measure of liquidity that provides an additional basis for assessing our ability to generate cash. Some of the limitations related to the use of free cash flow as an analytical tool include:

Current wording

We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. We believe free cash flow is a useful measure of liquidity that provides an additional basis for assessing our ability to generate cash. Some of the limitations related to the use of free cash flow as an analytical tool include:

Previous wording

Because of these limitations, you should consider free cash flow alongside other financial performance measures, including net cash used in operating activities, capital expenditures, and our other GAAP results.

Current wording

Because of these limitations, you should consider free cash flow alongside other financial performance measures, including net cash provided by (used in) operating activities, capital expenditures, and our other GAAP results.

Previous wording

The following table provides a reconciliation of net cash used in operating activities, the most directly comparable financial measure presented in accordance with GAAP, to free cash flow for the periods presented:

Current wording

The following table provides a reconciliation of net cash provided by (used in) operating activities, the most directly comparable financial measure presented in accordance with GAAP, to free cash flow for the periods presented:

Previous wording

In the aggregate, we have incurred net losses and negative cash flows from operations since inception. We may incur net losses in the near future, and our expenses will increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to drive market adoption of our solutions. As of September 30, 2025, we had an accumulated deficit of $2.6 billion.

Current wording

We may incur net losses in the near future, and our expenses will increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to launch and drive market adoption of our solutions. As of March 31, 2026, we had an accumulated deficit of $2.5 billion.

Previous wording

To date, we have funded our operations principally from the issuance of stock in private financings, issuance of common stock through our IPO, term loan borrowings and convertible debt, and through revenue from molecular profiling and pharma research and development services. As of September 30, 2025, we had cash and cash equivalents of $753.2 million and short-term marketable securities of $2.3 million. We believe our existing cash and cash equivalents, which includes the net proceeds from our Pre-IPO Financing (as defined below) and the IPO, short-term marketable securities, and anticipated cash flows from operations will provide sufficient capital and liquidity to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We may, however, continue to require additional capital to meet our operational needs. See “—Indebtedness” and “—Cash Requirements” below for additional information regarding our cash requirements and various factors that may impact our liquidity and capital resources.

Current wording

To date, we have funded our operations principally from the issuance of stock in private financings, issuance of common stock through our IPO, term loan borrowings and convertible debt, and through revenue from molecular profiling and pharma research and development services. As of March 31, 2026, we had cash and cash equivalents of $819.9 million and short-term marketable securities of $2.3 million. We believe our existing cash and cash equivalents, short-term marketable securities, and anticipated cash flows from operations will provide sufficient capital and liquidity to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We may, however, continue to require additional capital to meet our operational needs. See “—Indebtedness” and “—Cash Requirements” below for additional information regarding our cash requirements and various factors that may impact our liquidity and capital resources.

Previous wording

Net cash used in operating activities during the nine months ended September 30, 2024 was $206.3 million, which was primarily due to a net loss of $244.9 million and a net change in our operating assets and liabilities of $22.1 million, offset by net non-cash charges of $60.8 million. The net change in our operating assets and liabilities was primarily the result of a $15.0 million increase in accounts receivable, a $14.0 million decrease in accrued expenses and other liabilities, and a $2.2 million increase in prepaid expenses and other current assets, offset by a $5.1 million increase in accounts payable and a $4.2 million decrease in supplies. Net non-cash charges primarily consisted of $39.8 million of depreciation and amortization expense, $13.7 million of stock-based compensation expense, $4.2 million of non-cash operating lease expense, and $5.1 million in amortization of debt discount costs, offset by a $6.1 million gain within changes in the fair value of financial instruments.

Current wording

Net cash provided by operating activities during the three months ended March 31, 2026 was $32.9 million, which was due to a net change in our operating assets and liabilities of $8.3 million and net non-cash charges of $25.1 million, offset by a net loss of $0.5 million. The net change in our operating assets and liabilities was primarily the result of a $21.6 million decrease in accounts receivable, and a $16.4 million increase in accounts payable, offset by a $13.3 million increase in supplies, a $1.6 million increase in prepaid expenses and other current assets, and a $15.0 million decrease in accrued expenses and other liabilities. Net non-cash charges primarily consisted of $5.1 million of depreciation and amortization expense, $15.9 million of stock-based compensation expense, $1.3 million of non-cash operating lease expense, and $2.6 million in amortization of debt discount costs.

Previous wording

Net cash used in operating activities during the nine months ended September 30, 2025 was $38.4 million, which was due to a net change in our operating assets and liabilities of $26.0 million and net non-cash charges of $162.5 million, offset by a net loss of $150.0 million. The net change in our operating assets and liabilities was primarily the result of a $61.2 million decrease in accounts receivable, offset by a $11.1 million increase in supplies, a $1.2 million decrease in accounts payable, a $4.8 million increase in prepaid expenses and other current assets, and a $17.8 million decrease in accrued expenses and other liabilities. Net non-cash charges primarily consisted of $18.3 million of depreciation and amortization expense, $56.6 million of stock-based compensation expense (including $19.5 million of stock-based compensation expense associated with RSUs vested upon the IPO), $4.3 million of non-cash operating lease expense, $12.2 million in amortization of debt discount costs, a $52.3 million loss within changes in the fair value of financial instruments associated with our IPO, and a $17.9 million loss on debt extinguishment associated with our IPO.

Current wording

Net cash used in operating activities during the three months ended March 31, 2025 was $31.3 million, which was primarily due to a net loss of $102.6 million and a net change in our operating assets and liabilities of $13.3 million, offset by non-cash charges of $57.9 million. The net change in our operating assets and liabilities was primarily the result of a $1.7 million decrease in accounts payable, offset by a $7.9 million decrease in accounts receivable, a $2.5 million decrease in prepaid expenses and other current assets, a $2.1 million decrease in supplies, and a $2.6 million increase in accrued expenses and other liabilities. Net non-cash charges primarily consisted of $7.0 million of depreciation and amortization expense, $14.7 million of stock-based compensation expense, and $1.9 million in amortization of debt discount costs, offset by a $32.3 million loss within changes in the fair value of financial instruments.

Previous wording

Net cash used in investing activities during the nine months ended September 30, 2025 was $11.2 million, which was due to purchases of property and equipment of $11.2 million.

Current wording

Net cash used in investing activities during the three months ended March 31, 2026 was $10.3 million, which was due to purchases of property and equipment of $10.3 million.

Previous wording

Net cash provided by investing activities during the nine months ended September 30, 2024 was $55.2 million, which was due to maturities of marketable securities of $61.4 million, offset by purchases of property and equipment of $6.2 million.

Current wording

Net cash used in investing activities during the three months ended March 31, 2025 was $2.7 million, which was primarily due to purchases of property and equipment of $2.7 million.

Previous wording

Net cash provided by financing activities during the nine months ended September 30, 2024 was $200.1 million, which was primarily due to proceeds from issuance of additional borrowings under the 2023 Term Loan Agreement on March 5, 2024, net of issuance costs, of $200.0 million, proceeds from exercises of stock options of $1.3 million, offset by the payment of deferred offering costs of $1.0 million.

Current wording

Net cash provided by financing activities during the three months ended March 31, 2025 was $1.3 million, which was primarily due to proceeds from exercises of stock options of $1.4 million, offset by the payment of deferred offering costs of $0.1 million.

Previous wording

In January 2023, we entered into a term loan agreement, as amended with OrbiMed Royalty & Credit Opportunities III, LP, OrbiMed Royalty & Credit Opportunities IV, LP, and Braidwell Transaction Holdings LLC (the “Lenders”), pursuant to which we issued senior, secured promissory notes and the Lenders agreed to lend us up to an aggregate principal amount of $400.0 million, $200.0 million of which was drawn down upon issuance of the notes. Net cash proceeds to us were $189.0 million, after deducting customary debt discounts and debt issuance costs. The net proceeds were used to repay in full our then-outstanding term loans, including an aggregate principal amount of $175.0 million, a prepayment premium of $5.0 million, and accrued and unpaid interest of $1.0 million. In March 2024, we drew down the remaining $200.0 million under the 2023 Term Loan Agreement. As of September 30, 2025, we had $400.0 million of borrowings outstanding under the 2023 Term Loan Agreement.

Current wording

In January 2023, we entered into a term loan agreement, as amended with OrbiMed Royalty & Credit Opportunities III, LP, OrbiMed Royalty & Credit Opportunities IV, LP, and Braidwell Transaction Holdings LLC (the “2023 Lenders”), pursuant to which we issued senior, secured promissory notes and the Lenders agreed to lend us up to an aggregate principal amount of $400.0 million (the “2023 Term Loan”), $200.0 million of which was drawn down upon issuance of the notes. Net cash proceeds to us were $189.0 million, after deducting customary debt discounts and debt issuance costs. The net proceeds were used to repay in full our then-outstanding term loans, including an aggregate principal amount of $175.0 million, a prepayment premium of $5.0 million, and accrued and unpaid interest of $1.0 million. In March 2024, we drew down the remaining $200.0 million under the 2023 Term Loan. As of March 31, 2026, we had $400.0 million of borrowings outstanding under the 2023 Term Loan.

Previous wording

The aggregate principal amount outstanding under the 2023 Term Loan Agreement is due and payable on January 18, 2028. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the 2023 Term Loan Agreement to be immediately due and payable. A final payment exit fee equal to 1.0% of the amount funded under the 2023 Term Loan Agreement is due upon prepayment or maturity. Amounts borrowed pursuant to the 2023 Term Loan Agreement may be prepaid at any time. Upon prepayment, we may be subject to a prepayment penalty based on the timing of repayment.

Current wording

The aggregate principal amount outstanding under the 2023 Term Loan would have been due and payable on January 18, 2028. At any time during the occurrence and continuation of an event of default, the 2023 Lenders could declare all amounts outstanding under the 2023 Term Loan to be immediately due and payable. A final payment exit fee equal to 1.0% of the amount funded under the 2023 Term Loan and a prepayment premium were due upon prepayment or maturity, which amounts were paid with the proceeds of the 2026 Financing Agreement described below.