CareDx, Inc.

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

CareDx Inc. ("CareDx" or the "Company"), together with its subsidiaries, is a precision medicine company dedicated to improving outcomes for transplant patients and advancing organ health. The Company delivers solutions designed to empower clinicians and improve patient outcomes.The Company's integrated solutions include non-invasive molecular testing for heart, kidney, and lung transplants; laboratory products; digital health technologies; and patient solutions that support care before and after transplant. CareDx is the leading provider of genomics-based information for transplant patients. The Company’s headquarters are in Brisbane, California and it has other primary operations in Omaha, Nebraska; and Stockholm, Sweden.

The Company’s commercially available post-transplant testing services consist of AlloSure® Kidney, a donor-derived cell-free DNA, or dd-cfDNA, solution for kidney transplant patients, AlloMap® Heart, a gene expression profiling solution for heart transplant patients, AlloSure® Heart, a dd-cfDNA solution for heart transplant patients, HeartCare, the combined use of AlloMap Heart and AlloSure Heart, and AlloSure® Lung, a dd-cfDNA solution for lung transplant patients. The Company has initiated several clinical studies to generate data on its existing and planned future testing services. The Company has signed multiple biopharma research partnerships for AlloCell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy. The Company also offers high-quality products in the pre-transplant space that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs. The Company also provides digital technologies solutions and various offerings that help transplant centers with patient management, outcomes quality and operational support.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP, and include the accounts of the Company and its subsidiaries. Intercompany transactions have been eliminated.

Certain reclassifications have been made to prior period amounts to conform to current period presentations.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the Company's consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to transaction price estimates used for testing services revenue; accrued expenses for clinical studies; inventory valuation; the grant date fair value assumptions used to estimate stock-based compensation expense; income taxes; impairment of long-lived assets and indefinite-lived assets (including goodwill); and legal contingencies. Actual results could differ from those estimates.

Concentrations of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents and marketable securities. The Company’s policy is to invest its cash and cash equivalents in money market funds, obligations of U.S. government agencies and government-sponsored entities, commercial paper, corporate debt securities and various bank deposit accounts. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of amounts recorded on the balance sheets that may be in excess of insured limits.

The Company is also subject to credit risk from its accounts receivable, which are primarily derived from revenue earned from AlloSure Kidney, AlloSure Heart, AlloMap Heart, HeartCare and AlloSure Lung tests provided for patients located in the U.S. and Canada, and billed to various third-party payers, from sales of products to distributors, strategic partners and transplant laboratories in Europe, Asia, the Middle East, Africa, the U.S., Latin America and other geographic regions, and from sales of patient and digital solutions. The Company has not experienced any significant credit losses and does not require collateral on receivables. For the years ended December 31, 2025, 2024 and 2023, approximately 34%,38% and 40%, respectively, of total revenue was billed to Medicare. No other payers represented more than 10% of total revenue for the years ended December 31, 2025, 2024 and 2023.

As of December 31, 2025 and 2024, approximately 21% and 27%, respectively, of accounts receivable was due from Medicare. No other payer or customer represented more than 10% of accounts receivable at either December 31, 2025 or 2024.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds.

Restricted Cash

As a condition of the lease agreements for certain facilities, the Company must maintain letters of credit and certain minimum collateral requirements. The cash used to support these arrangements of $0.6 million is classified as long-term restricted cash on the accompanying consolidated balance sheets.

Marketable Securities

The Company considers all highly liquid investments in securities with a maturity of greater than three months at the time of purchase to be marketable securities. As of December 31, 2025, the Company’s marketable securities consisted of corporate debt securities and U.S government securities. Those with maturities of greater than three months but less than 12 months from the balance sheet date were classified as current assets, while investments with maturities of one year or beyond one year from the balance sheet date are classified as non-current assets on the consolidated balance sheet.

The Company classifies its marketable securities as held-to-maturity at the time of purchase and reevaluates such designation at each balance sheet date. The Company has the positive intent and ability to hold these marketable securities to maturity. Marketable securities are carried at amortized cost and are adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income, net, on the consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on marketable securities are included in interest income, net. The cost of securities sold is determined using specific identification.

Inventory

Inventories are stated at the lower of actual purchased cost, determined on an average cost basis, on a first-in, first-out basis, or at net realizable value. Excess and obsolete inventories are determined primarily based on expiration dates and future demand forecasts, and write-downs of excess and obsolete inventories are recorded as a component of cost of product.

Property and Equipment, net

Property and equipment are stated at historical cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful life is generally three tofive years for computer, office and laboratory equipment, andseven years for furniture and fixtures. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease term.

The Company capitalizes certain costs incurred for software developed or obtained for internal use, including hosting arrangements. These costs include software licenses and consulting services, as well as employee payroll and payroll-related costs. Capitalized internal-use software costs are usually amortized over a period ofthree toseven years.

Business Combinations

The Company determines and allocates the purchase price of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including separately identifiable intangible assets, which are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods.

In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under Accounting Standard Codification, or ASC, Topic 480, Distinguishing Liabilities from Equity, the Company recognizes a liability equal to the fair value of the contingent payments that the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value as a component of operating expenses.

Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition.

Acquired Intangible Assets

Amortizable intangible assets include customer relationships, developed technology, commercialization rights, trademarks and tradenames and in-process technology assets acquired as part of a business combination or asset acquisition. Intangible assets subject to amortization are amortized over their estimated useful lives. Acquired in-process technology assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time.

Impairment of Goodwill, Intangible Assets and Long-lived Assets

Goodwill recorded in a business combination is not subject to amortization. Instead, it is tested for impairment on an annual basis and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. The Company has a single reporting unit and consequently evaluates goodwill for impairment based on an evaluation of the fair value of the Company as a whole.

The Company’s annual impairment test date is December 1 st. During the goodwill impairment review, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and the market considerations, and the Company's overall financial performance. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company proceeds to compare the estimated fair value of the reporting unit with the carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the fair value, the Company records an impairment loss based on the difference.

When necessary, to determine the reporting unit’s fair value under the quantitative approach, the Company uses a combination of income and market approaches, such as estimated discounted future cash flows of that reporting unit, multiples of earnings or revenues, and analysis of recent sales or offerings of comparable entities. The Company also considers its market capitalization on the date of the analysis to assess the reasonableness of the reporting unit’s fair value.

Indefinite-lived intangible assets

The Company evaluates the carrying value of indefinite-lived intangible assets, related to acquired in-process technology assets and a favorable license agreement.

During the period the assets are considered indefinite-lived, they are tested for impairment on an annual basis, as well as between annual tests if the Company becomes aware of any events or changes in circumstances that would indicate that the fair value of the acquired in-process technology assets and the favorable license agreement are less than their carrying amounts. An impairment loss would be recorded when the fair value of an acquired in-process technology asset and the favorable license agreement are less than the carrying value. If and when development is complete, which generally occurs when the products are made commercially available, the associated acquired in-process technology asset and the favorable license agreement will be deemed finite-lived and will then be amortized based on the estimated useful life.

Finite-lived intangible assets and long-lived assets

The Company evaluates its finite-lived intangible assets and its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The Company then compares the carrying amounts of the asset group with the future net undiscounted cash flows expected to be generated by such asset group. If an impairment exists, the Company measures the impairment based on the excess carrying value of the asset group over the asset group’s fair value determined using discounted estimates of future cash flows. Intangible assets subject to amortization are carried at cost less accumulated amortization. Amortization expenses are recorded to cost of testing services, cost of product, cost of patient and digital solutions, research and development expenses and sales and marketing expenses in the consolidated statements of operations.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company uses the U.S. GAAP fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

•Level 1: Inputs that include quoted prices in active markets for identical assets and liabilities.

•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of certain financial instruments of the Company, including accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their short maturities. The carrying amount of the contingent consideration liability also represents its fair value.

Leases

The Company determines if an arrangement is or contains a lease at contract inception. For leases with an initial term of 12 months or more, a right-of-use, or ROU, asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the consolidated balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company also has lease arrangements with lease and non-lease components. The Company does not separate non-lease components from lease components for the Company's facility leases. The Company also elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for leases with an initial term of 12 months or less.

The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment.

Revenue

The Company recognizes revenue from testing services, product sales, and patient and digital solutions revenue in the amount that reflects the consideration that it expects to be entitled in exchange for goods or services as it transfers control to its customers. Revenue is recorded considering a five-step revenue recognition model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.

Testing Services Revenue

AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung patient tests are ordered by healthcare providers. The Company receives a test requisition form with payer information along with a collected patient blood sample. The Company considers the patient to be its customer and the test requisition form to be the contract. Testing services are performed in the Company’s laboratory. Testing services represent one performance obligation in a contract and are performed when results of the test are provided to the healthcare provider, at a point in time.

The healthcare providers that order the tests and on whose behalf the Company provides testing services are generally not responsible for the payment of these services. The first criterion, identify the contracts(s) with a customer, and the second criterion, identify the performance obligations in the contract, of revenue recognition are satisfied when the Company receives a test requisition form with payer information from the healthcare provider. Generally, the Company bills third-party payers upon delivery of an AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare or AlloSure Lung test result to the healthcare provider. Amounts received may vary amongst payers based on coverage practices and policies of the payer. The Company has used the portfolio approach under ASC Topic 606, Revenue from Contracts with Customers, to identify financial classes of payers. Revenue recognized for Medicare and other contracted payers is based on the agreed current reimbursement rate per test, adjusted for historical collection trends where applicable. The Company estimates revenue for non-contracted payers and self-payers using transaction prices determined for each financial class of payers using a history of reimbursements. This includes analysis of the average reimbursement per test and a percentage of tests reimbursed. These estimates require significant judgment.

The Company monitors revenue estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Changes in transaction price estimates are updated quarterly based on actual cash collected or changes made to contracted rates, the Company's discussions with payers, and other pertinent information. In addition, consistent with ASC 606-10-25-1, the Company continues to assess whether it is probable that it will collect substantially all of the consideration to which it will be entitled when determining if a contract with a customer exists.

For the years ended December 31, 2025 and 2024, the Company recognized $9.6 million and $17.4 million respectively, in revenue for the tests performed in prior periods, as all performance obligations were satisfied at the time the contract was established.

Refunds Reserve

With respect to revenue recognized related to testing services whereby consideration is expected to be received from third-party payers, the Company recognized a constraint to the estimated variable consideration such that it is not probable that a significant revenue reversal will occur. When assessing the total consideration expected to be received from third-party payers, a certain percentage of revenues is further constrained for estimated refunds.

Certain refunds were recognized in accrued liabilities until they are either paid to the respective third-party payers or it is determined the refund will not ultimately be paid, at which time the related accrual is reduced with a corresponding increase to testing services revenue. During the year ended December 31, 2025, the refunds reserve to third-party payers were recognized and testing services revenue decreased by $3.5 million for amounts the Company estimated that would be refunded to third-party payers.

Product Revenue

Product revenue is recognized from the sale of products to end-users, distributors and strategic partners when all revenue recognition criteria are satisfied. The Company generally has a contract or a purchase order from a customer with the specified required terms, including the number of products ordered. Transaction prices are determinable in the contract. The products are delivered and control is transferred to the customer upon either shipping or delivery, as per the terms of the agreement. There are no further performance obligations related to a contract and revenue is recognized at the point of shipment or delivery consistent with the terms of the contract or purchase order.

Patient and Digital Solutions Revenue

Patient and digital solutions revenue is primarily derived from software as a service, or SaaS, agreements entered into with various transplant centers, which are the Company’s customers for this class of revenue. Digital revenue in connection with software license agreements is recognized at the point in time when control of the license is transferred and made available for the customer's use and benefit. The PCS is recognized ratably over the term of the arrangement beginning on the date when access to the subscription is made available to the customer in accordance with ASC 606.

Software license agreements typically require advance payments from customers upon the achievement of certain milestones. The Company records deferred revenue in relation to these agreements when cash payments are received for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met, and generally recognizes revenue over the contractual term, as performance obligations are fulfilled.

In addition, the Company derives patient revenue from medication sales. The medication sales revenue is recognized based on the negotiated contract price with the governmental, commercial and non-commercial payers with any applicable patient co-pay. Based on the individual agreement, the Company recognizes revenue from medication sales when prescriptions are shipped or delivered.

Cost of Testing Services

Cost of testing services reflects the aggregate costs incurred in delivering the Company’s testing services. The components of cost of testing services primarily consist of materials and service costs, direct labor costs, stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples, and allocated overhead including rent, information technology, equipment depreciation, utilities and royalties. Royalties for licensed technology, calculated as a percentage of testing services revenues, are recorded as license fees in cost of testing services at the time the testing services revenues are recognized.

Cost of Product

Cost of product reflects the aggregate costs incurred in delivering the Company’s products to customers. The components of cost of product primarily consist of materials costs, manufacturing and kit assembly costs, direct labor costs, equipment and infrastructure expenses associated with preparing kitted products for shipment, shipping, and allocated overhead including rent, information technology, equipment depreciation and utilities. Cost of product also includes amortization of acquired developed technology and adjustments to inventory values, including write-downs of excess or obsolete inventory.

Cost of Patient and Digital Solutions

Cost of patient and digital solutions primarily consists of personnel-related costs associated with developing, installing and maintaining software, depreciation of servers and equipment, amortization of acquired intangible assets, support of the functionality of the software's platforms, including stock-based compensation expenses, cost of medications and allocated costs of facilities and information technology.

Research and Development Expenses

Research and development expenses, including clinical operations, represent costs incurred to develop diagnostic products and services, high-quality evidence to support the use of the Company’s tests, as well as continued efforts related to improving the Company’s existing products and patient and digital solutions offerings. These expenses include payroll and related expenses, consulting expenses, laboratory supplies, clinical studies and certain allocated expenses as well as amounts incurred under certain collaborative agreements. Research and development costs are expensed as incurred. The Company records accruals for estimated clinical study costs comprised of work performed by contract research organizations based on measure of progress.

Stock-based Compensation

The Company uses the Black-Scholes Model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, estimates volatility using its own historical stock prices, estimates risk-free rates using the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and estimates dividend yield using the Company’s expectations and historical data. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes Model and is recorded over the service performance period using the straight-line attribution method. Options subject to vesting are required to be periodically remeasured over their service performance period, which is generally the same as the vesting period.

The fair value of each restricted stock unit is calculated based upon the closing price of the Company’s common stock on the date of the grant.

The Company's stock-based compensation arrangements vest over athree tofour year vesting schedule. The Company expenses its stock-based compensation under the ratable method, which treats each vesting tranche as if it were an individual grant. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company's historical experience.

Income Taxes

The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company’s assessment of an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available.

Foreign Currency Translation

The functional currency of the Company’s foreign subsidiaries is the local currency for each entity, including the Swedish Krona and Australian dollar. The revenue and expenses of such subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Foreign currency translation gains and losses on revenue and expenses are recognized in the consolidated statements of operations. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting cumulative translation adjustments are reported in other comprehensive income (loss).

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other income and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income or loss. For the Company, such items consist of foreign currency income and losses on the translation of foreign assets and liabilities.

Recent Accounting Pronouncements

Adopted in the current period

In December 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-09, Income Taxes (Topic 340): Improvements to Income Tax Disclosures, which requires annual disclosures in the rate reconciliation table to be presented using both percentages and reporting currency amounts, and this table must include disclosure of specific categories. Additional information is required for reconciling items that meet a quantitative threshold. The new guidance also requires enhanced disclosures of income taxes paid, including the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions that exceed a quantitative threshold. The Company adopted this ASU on a prospective basis effective January 1, 2025. Refer to Note 12, Income Taxes.

Effective in Future Periods

In December 2025, the Financial Accounting Standards Board, or FASB, issued ASU 2025-11, Narrow-Scope Improvements (Topic 270): Interim Reporting. This update makes targeted, narrow-scope improvements to the interim reporting guidance in Topic 270 to clarify application and improve consistency in practice. The amendments do not change the underlying principles of interim reporting. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt the guidance in its Form 10-Q for the interim period ending March 31, 2028. The Company is currently evaluating the provisions of this ASU and does not expect to have a material impact on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, or ASU 2025-12. ASU 2025-12 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 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. Amendments to all other ASC topics may be applied prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. This standard requires entities to disaggregate certain costs and expenses into specific categories and by relevant expense caption in the statement of operations. This guidance will be effective for the Company's annual disclosures for the fiscal year ending December 31, 2027 and for interim period disclosures beginning in the fiscal year ending December 31, 2028. The Company is currently evaluating the potential impact of the new standard on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This standard modernizes the accounting guidance for internal-use software costs to better reflect current development practices, including agile and iterative methodologies. This guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the provisions of this ASU and does not expect to have a material impact on its consolidated financial statements.

3. NET (LOSS) INCOME PER SHARE

Basic and diluted net (loss) income per share have been computed by dividing the net (loss) income by the weighted-average number of common shares outstanding during the period.

For the years ended December 31, 2025, and 2023 common share equivalents have been excluded from the calculation of diluted net loss per share, as their effect would be antidilutive.

For the year ended December 31, 2024, all common share equivalents have been included in the calculation of diluted net income per share.

The following tables set forth the computation of the Company’s basic and diluted net (loss) income per share (in thousands, except shares and per share data):

The following potentially dilutive securities have been excluded from diluted net (loss) income per share because their effect would be antidilutive:

4. FAIR VALUE MEASUREMENTS

The following table sets forth the Company’s financial assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2025 and 2024 (in thousands):

The following table presents the exercise, changes in estimated fair value, additions, deduction and payments of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands):

In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. The valuation methodologies used for the Company’s instruments measured at fair value and their classification in the valuation hierarchy are summarized below:

•Money market funds– Investments in money market funds are classified within Level 1. Money market funds are valued at the closing price using the fund's net asset value reported by the fund sponsor, utilizing actively traded exchange information. At December 31, 2025 and 2024, money market funds were included as cash and cash equivalents in the consolidated balance sheets.

•Contingent consideration– Contingent consideration is classified within Level 3. Contingent consideration relates to asset acquisitions and business combinations. The Company recorded the estimate of the fair value of the contingent consideration based on its evaluation of the probability of the achievement of the contractual conditions that would result in the payment of the contingent consideration. Contingent consideration was estimated using the fair value of the milestones to be paid if the contingency is met based on management’s estimate of the probability of success and projected revenues for revenue-based considerations at discounted rates of 7% at December 31, 2025 and 7% to 12% at December 31, 2024. The significant input in the Level 3 measurement that is not supported by market activity is the Company’s probability assessment of the achievement of the milestones. The value of the liability is subsequently remeasured to fair value at each reporting date, and the change in estimated fair value is recorded as income or expense within operating expenses in the consolidated statements of operations until the milestones are paid, expire or are no longer achievable. Increases or decreases in the estimation of the probability percentage result in a directionally similar impact on the fair value measurement of the contingent consideration liability. The carrying amount of the contingent consideration liability represents its fair value.

5. CASH AND MARKETABLE SECURITIES

Cash, Cash Equivalents and Restricted Cash

A reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the amount reported within the consolidated statements of cash flows is shown in the table below (in thousands):

Marketable Securities

All marketable securities were considered held-to-maturity at December 31, 2025 and 2024. The Company determined that it had the positive intent and ability to hold until maturity all marketable securities. The Company assesses whether the decline in value of marketable securities is temporary or other-than-temporary. In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information. There has beenno recognition of any other-than-temporary impairment at December 31, 2025 and 2024.

The amortized cost, unrealized holding gains, and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the tables below (in thousands):

As of December 31, 2025, $24.2 million of marketable securities had maturities of more than one year and less than two years and are classified as non-current assets.

6. GOODWILL AND INTANGIBLE ASSETS

On December 1, 2025, the Company performed a qualitative assessment of its reporting unit taking into consideration past, current and projected future earnings, recent trends and market conditions, and its market capitalization. Based on this analysis, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. As such, it was not necessary to perform the quantitative goodwill impairment assessment at this time. As of December 31, 2025, 2024 and 2023, there has beenno impairment of goodwill.

Intangible Assets

The following table presents details of the Company’s intangible assets as of December 31, 2025 ($ in thousands):

The following table presents details of the Company’s intangible assets as of December 31, 2024 ($ in thousands):

As of December 31, 2025, 2024 and 2023, other than the $1.7 million intangible asset that was impaired and written off under general and administrative expenses during the year ended December 31, 2025, the Company did not identify any impairment indicators suggesting that the carrying value of the intangible assets was not recoverable.

The following table summarizes the Company's amortization expense of intangible assets (in thousands):

The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2025 (in thousands):

7. BALANCE SHEET COMPONENTS

Inventory

Inventory consisted of the following (in thousands):

Property and Equipment, Net

Property and equipment consisted of the following (in thousands):

Depreciation expense was $8.7 million, $7.8 million and $7.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Accrued and Other Liabilities

Accrued and other liabilities consisted of the following (in thousands):

8. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases its operating and office facilities for various terms under long-term, non-cancelable operating lease agreements in Brisbane, California; West Chester, Pennsylvania; Flowood, Mississippi; Omaha, Nebraska; Fremantle, Australia; and Stockholm, Sweden.

The Company's facility leases expire at various dates through 2033. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties.

As of December 31, 2025, the carrying value of the ROU asset was $22.8 million. The related current and non-current lease liabilities as of December 31, 2025 were $6.5 million and $19.7 million, respectively. The current and non-current lease liabilities are included in accrued andother liabilities and operating lease liabilities, less current portion, respectively, in the consolidated balance sheets.

The following table summarizes the lease cost for the years ended December 31, (in thousands):

Supplemental cash flow information related to leases for the years ended December 31, are as follows (in thousands):

Maturities of operating lease liabilities as of December 31, 2025, are as follows (in thousands):

As of December 31, 2025, the Company’s leases had remaining terms of 0.41 years to 7.09 years, some of which include options to extend the lease term.

Royalty Commitments

Illumina

On May 4, 2018, the Company entered into a license agreement with Illumina, Inc., or the Illumina Agreement. The Illumina Agreement requires the Company to pay royalties in the mid-single to low-double digits on sales of products covered by the Illumina Agreement.

Other Royalty Commitment

Effective as of August 2023, the Company entered into a license agreement with a university institution, or the University Agreement. The University Agreement requires the Company to pay royalties in the low single digits on sales of products covered by the University Agreement.

Other Commitments

Effective as of July 2023, the Company entered into a license and collaboration agreement with a private entity, or the Collaboration Agreement, pursuant to which the Company was granted an irrevocable, non-transferable right to commercialize its proprietary software, iBox, for the predictive analysis of post-transplantation kidney allograft loss in the field of transplantation for a period offour years with exclusive rights in the United States. Pursuant to the Collaboration Agreement, the Company will share an agreed-upon percentage of revenue with the private entity, if and when revenues are generated from iBox.

Litigation and Indemnification Obligations

From time to time, the Company may become involved in litigation and other legal actions. The Company estimates the range of liability related to any pending litigation where the amount and range of loss can be estimated. The Company records its best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements, and (ii) the range of loss can be reasonably estimated.

Natera

In response to the Company’s false advertising suit filed against Natera Inc., or Natera, on April 10, 2019, Natera filed a counterclaim against the Company on February 18, 2020, in the U.S. District Court for the District of Delaware, or the Court, alleging the Company made false and misleading claims about the performance capabilities of AlloSure. The suit seeks injunctive relief and unspecified monetary relief. On September 30, 2020, Natera requested leave of Court to amend its counterclaims to include additional allegations regarding purportedly false claims the Company made with respect to AlloSure, and the Court granted Natera’s request. The trial commenced on March 7, 2022 and concluded on March 14, 2022, with the jury finding that Natera violated the Lanham Act by falsely advertising the scientific performance of its Prospera transplant test and awarding the Company $44.9 million in damages, comprised of $21.2 million in compensatory damages and $23.7 million in punitive damages. In July 2023, the Court upheld and reaffirmed the March 2022 jury verdict but did not uphold the monetary damages awarded by the jury. In August 2023, the Court issued an injunction prohibiting Natera from making the claims the jury previously found to be false advertising. Both parties appealed. On October 8, 2024, the U.S. Court of Appeals for the Third Circuit remanded the case to make additional findings. On December 23, 2024, the Court issued an order concluding that there was sufficient evidence to support the jury’s findings of falsity oneight advertisements by Natera. Following the decision, the parties submitted additional briefing to the Court. On August 28, 2025, the U.S. Court of Appeals for the Third Circuit issued a decision affirming the District Court’s findings on both liability and damages. On September 25, 2025, the Company filed a petition for panel rehearing or rehearing en banc of the Court’s damages decision. On October 10, 2025, the Third Circuit denied the petition. On February 9, 2026, the Company filed a petition for Supreme Court review. The Company did not record a receivable or a gain from the judgment as the amount has not yet been realized.

In addition, Natera filed suit against the Company on January 13, 2020, in the Court alleging, among other things, that AlloSure infringes Natera’s U.S. Patent 10,526,658. This case was consolidated with the Company’s patent infringement suit on February 4, 2020. On March 25, 2020, Natera filed an amendment to the suit alleging, among other things, that AlloSure also infringes Natera’s U.S. Patent 10,597,724. The suit seeks a judgment that the Company has infringed Natera’s patents, an order preliminarily and permanently enjoining the Company from any further infringement of such patents and unspecified damages. On May 13, 2022, Natera filedtwo new complaints alleging that AlloSure infringes Natera’s U.S. Patents 10,655,180 and 11,111,544. Thesetwo cases were consolidated with the patent infringement case on June 15, 2022. On May 17, 2022, Natera agreed to dismiss the case alleging infringement of Natera’s U.S. Patent 10,526,658. On July 6, 2022, the Company moved to dismiss the rest of Natera’s claims. On September 6, 2022, the Company withdrew its motion to dismiss. On December 11, 2023, the Court dismissed the case alleging infringement of Natera's U.S. Patent 10,597,724. Natera appealed that decision. On March 13, 2024, the Federal Circuit dismissed Natera's appeal after Natera failed to file its brief and other required papers. On May 30, 2024, Natera filed a second notice of appeal of the dismissal of U.S. Patent 10,597,724. On June 19, 2024, the Company moved to dismiss Natera's appeal. On September 11, 2024, the Federal Circuit denied that motion.

On January 26, 2024, following afive-day trial, a jury concluded that the Company did not infringe Natera's U.S. Patent 10,655,180 but did infringe Natera's U.S. Patent 11,111,544. The jury awarded Natera approximately $96.3 million in damages based on sales of AlloSure and AlloSeq between September 2021 and August 2023. Natera's U.S. Patent 11,111,544 expires in September 2026. Following trial, Natera moved for an injunction on the Company's prior AlloSure process and the parties engaged in motion practice regarding the jury's verdict and discovery as to whether the Company’s current AlloSure process infringes Natera's U.S. Patent 11,111,544. On September 11, 2024, Natera informed the Court that it was abandoning claims of ongoing infringement. On January 3, 2025, the Court issued an order denying Natera’s motion to set aside the jury’s finding that the Company did not infringe Natera's U.S. Patent 10,655,180. On February 24, 2025, the Court issued an order concluding that Natera's U.S. Patents 11,111,544 and 10,655,180 were invalid for lack of written description thereby overturning the jury verdict. On February 25, 2025, the Court issued an order denying Natera's motion for an injunction as moot. Natera has appealed the Court's invalidation of the three patents it asserted against CareDx. The Company intends to defend these matters vigorously, and believes that the Company has good and substantial defenses to the claims alleged in the suits, but there is no guarantee that the Company will prevail.

In addition, Natera's U.S. Patent 10,597,724 is currently subject to an ex parte reexamination before the United States Patent and Trademark Office, or PTO. On December 17, 2025, a PTO examiner issued a non-final office action rejecting Claims 1 and 4-6 of the patent. Natera's U.S. Patent 11,111,544 was previously subject to an ex parte reexamination before the PTO. On February 14, 2025, a PTO examiner issued a non-final Office action rejecting Claims 21, 26, and 27 of the patent, the claims CareDx was found to have infringed in the litigation. On July 9, 2025, the PTO issued a reexamination certificate finding that Natera had overcome the prior rejections of the 11,111,544 patent, concluding the reexamination proceeding.

After the jury finding, the Company recognized the damages of $96.3 million as other liabilities on the consolidated balance sheets as of December 31, 2023 as the loss was probable and reasonably estimable at that time. After the Court order overturned the jury finding, the Company derecognized the $96.3 million as of December 31, 2024 as the Company concluded that the loss was no longer probable. It is reasonably possible that the Company may not prevail if Natera continues to pursue the case through appeal, in which case the range of loss could be up to the jury awarded amount of $96.3 million plus potential interest.

United States Department of Justice and United States Securities and Exchange Commission Investigations

As previously disclosed, in 2021, the Company received a civil investigative demand, or CID, from the United States Department of Justice, or DOJ, requesting that the Company produce certain documents in connection with a False Claims Act investigation by the DOJ regarding certain business practices related to the Company’s kidney testing and phlebotomy services, and a subpoena from the United States Securities and Exchange Commission, or the SEC, in relation to an investigation by the SEC in respect of matters similar to those identified in the CID, as well as certain of the Company’s accounting and public reporting practices. By letter dated September 19, 2023, the Company was notified by the staff of the SEC that the SEC has concluded its investigation as to the Company and does not intend to recommend an enforcement action by the SEC against the Company. The notice was provided under the guidelines set out in the final paragraph of Securities Act Release No. 5310.

In a court document unsealed on October 7, 2024, the DOJ notified the United States District Court for the Eastern District of New York that it was declining to intervene in a qui tam action filed against the Company by a former employee that served as the basis for the CID. Accordingly, CareDx understands that the DOJ has closed its investigation of the Company with no finding of wrongdoing. On April 8, 2025, the private plaintiff who originally filed the qui tam action in 2021, or the Relator, filed an amended complaint on the public docket. On July 16, 2025, the District Court held a conference, at which it set a briefing schedule for a motion to dismiss. On October 17, 2025, Relator filed an opposition to the Company’s motion to dismiss, and on October 31, 2025, the Company filed its reply in further support of its motion to dismiss. The Company denies the allegations in the qui tam action and intends to vigorously defend itself.

The Company may receive additional requests for information from the DOJ, the SEC, or other regulatory and governmental agencies regarding similar or related subject matters. Although the Company remains committed to compliance with all applicable laws and regulations, it cannot predict the outcome of, or any other requests or investigations that may arise, in the future.

Securities Class Action

On May 23, 2022, Plumbers & Pipefitters Local Union #295 Pension Fund filed a federal securities class action, or the Securities Class Action, in the U.S. District Court for the Northern District of California against the Company, Reginald Seeto, its former President, Chief Executive Officer and member of the Company’s Board of Directors, Ankur Dhingra, its former Chief Financial Officer, Marcel Konrad, its former interim Chief Financial Officer and former Senior Vice President of Finance & Accounting, and Peter Maag, its former President, former Chief Executive Officer, former Chairman of the Company’s Board of Directors and current member of the Company’s Board of Directors. The action alleges that the Company and the individual defendants made materially false and/or misleading statements and/or omissions and that such statements violated Section 10(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Rule 10b-5 promulgated thereunder. The action also alleges that the individual defendants are liable pursuant to Section 20(a) of the Exchange Act as controlling persons of the Company. The suit seeks to recover damages caused by the alleged violations of federal securities laws, along with the plaintiffs’ costs incurred in the lawsuit, including their reasonable attorneys’ and experts’ witness fees and other costs.

On August 25, 2022, the court appointed an investor group led by the Oklahoma Police Pension and Retirement System as lead plaintiffs and appointed Saxena White P.A. and Robbins Geller Rudman & Dowd LLP as lead counsels. Plaintiffs filed an amended complaint on November 28, 2022. On January 27, 2023, defendants moved to dismiss all claims and to strike certain allegations in the amended complaint.

On May 24, 2023, the court granted the Company’s motion to strike and motion to dismiss, dismissing all claims against defendants with leave to amend. On June 28, 2023, plaintiffs filed a second amended complaint against the Company, Reginald Seeto, Ankur Dhingra, and Peter Maag. Under a briefing schedule ordered by the court on June 12, 2023, defendants’ motion to dismiss and motion to strike the second amended complaint was filed on July 26, 2023, plaintiffs’ opposition was filed on August 30, 2023, and defendants’ reply was filed on September 22, 2023. The court held oral argument on October 31, 2023.

On September 18, 2024, the court granted the Company’s motion to dismiss the second amended complaint without prejudice, providing plaintiffs leave to file a third amended complaint by no later than October 2, 2024 (a deadline which was subsequently extended by stipulation). On October 18, 2024, plaintiffs filed a third amended complaint, which again alleges that the Company and the individual defendants made materially false and/or misleading statements and/or omissions in violation of Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. Among other things, plaintiffs removed former Chief Financial Officer, Ankur Dhingra, as a named defendant. The third amended complaint reiterates many of the same factual allegations as in prior complaints, but purports to add new allegations based on, among other things, a recently unsealed qui tam action filed by a former employee. On November 15, 2024 the defendants filed a motion to dismiss the third amended complaint and on December 13, 2024, plaintiffs filed an opposition brief. On January 10, 2025, defendants filed their reply brief and a hearing was held on January 28, 2025. On February 18, 2025, the court denied the defendant’s motion to dismiss the third amended complaint.

On April 1, 2025, a mediation was held between the parties to the Securities Class Action with the assistance of Phillips ADR Enterprises.

On April 22, 2025, the parties in the Securities Class Action reached an agreement-in-principle to resolve the Securities Class Action under which the Company would pay or cause to be paid a settlement payment of approximately $20.25 million. On May 16, 2025, the parties reached a definitive stipulation of settlement. On May 23, 2025, plaintiffs filed a motion for preliminary approval. On July 23, 2025, the District Court issued an order preliminarily approving the settlement triggering the Company's obligation to fund its portion of the settlement. Pursuant to the settlement agreement, the Company and its insurers each deposited their respective obligations into an escrow account.

In accordance with the Court’s July 23, 2025 order, plaintiffs filed a motion for final approval and a motion for an award of attorneys’ fees and expenses on September 30, 2025. On December 4, 2025, the Court provided final approval of the settlement and the Company paid the settlement amount.

Derivative Actions

On February 26, 2025, the plaintiffs in a previously-dismissed consolidated derivative action initiated a new action, captioned Edelman v. Bickerstaff, 3:25-c-02036 (N.D. Cal. filed Feb. 26, 2025), purporting to reinstate their claims and updating and amending their prior complaint, or the Edelman Derivative Action. The Edelman Derivative Action asserts claims against the Company as nominal defendant and Drs. Seeto and Maag and Mr. Dhingra, and other current and former members of the Company's Board of Directors alleging, among other things, breaches of fiduciary duty and various state and federal claims based on the factual allegations of the Securities Class Action.

On March 19, 2025, the parties to the Edelman Derivative Action and the Securities Action filed an administrative motion to consider whether the Edelman Derivative Action should be related to the Securities Class Action. On April 1, 2025, the Court granted the motion.

On April 1, 2025, a mediation was held between the parties to the Edelman Derivative Action with the assistance of Phillips ADR Enterprises. No settlement was reached during the mediation.

On April 10, 2025, the Court held an Initial Case Management Conference in the Edelman Derivative Action and thereafter issued a Case Management and Scheduling Order setting a trial date of July 19, 2027, among other deadlines.

On April 21, 2025, plaintiffs in the Edelman Derivative Action submitted a letter motion to the Court seeking to have the Court lift the discovery stay provided by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4, or the PSLRA. On April 23, 2025, CareDx submitted a brief in opposition and a hearing was held on June 10, 2025. On June 12, 2025, the Court issued an order denying plaintiffs’ letter motion to lift the PSLRA’s discovery stay.

On March 20, 2024, Edward W. Burns IRA filed a stockholder derivative action complaint in the Court of Chancery of the State of Delaware against the Company as nominal defendant and Dr. Seeto, Mr. Dhingra, Dr. Maag, and other current and former members of the Company's Board of Directors, or the Burns Derivative Action. Prior to filing the complaint, the Company produced documents to the plaintiff in response to a books and records inspection demand made pursuant to Section 220 of the Delaware General Corporation Law. The plaintiff purports to incorporate those documents in the complaint. The plaintiff alleges that the individual defendants breached their fiduciary duties as directors and/or officers of the Company and engaged in insider trading, unjust enrichment, waste of corporate assets, and aiding and abetting breaches of fiduciary duty. The suit seeks declaratory relief, recovery of alleged damages sustained by the Company as a result of the alleged violations, equitable relief, restitution, and plaintiff’s costs incurred in the lawsuit, including reasonable attorneys’, accountants’, and experts’ fees, costs, and expenses. On April 11, 2024, the Court entered an order staying the Burns Derivative Action pursuant to a stipulation filed by the parties.

On March 10, 2025, the parties to the Burns Derivative Action filed an amended stipulation and proposed order to continue the stay in that action, which was so-ordered by the Court on the same day. On April 1, 2025, a mediation was held between the parties to the Burns Derivative Action with the assistance of Phillips ADR Enterprises. No settlement was reached. On June 9, 2025, in accordance with the Court’s March 10, 2025 order, the parties submitted a joint status report, informing the Court that subject to Court approval, the Securities Class Action has been settled and that settlement discussions in the Burns and Edelman Derivative Actions were ongoing.

On July 22, 2025, the parties reached an agreement in principle to resolve the case, subject to the negotiation of an agreed-upon attorney fee, and informed the Court. On July 31, 2025, the parties submitted a joint status report, notifying the Court that the parties selected a JAMS mediator to oversee attorney’s fee negotiation.

On September 9, 2025, the parties participated in a mediation session to mediate attorneys’ fees which was unsuccessful. On September 11, 2025, the parties in the Edelman Derivative Action submitted a joint status report notifying the Court that because a request for attorneys’ fees is not evaluated at the preliminary approval stage, plaintiffs intended to file a motion for preliminary approval of the derivative settlement.

On September 26, 2025, the parties entered into a stipulation and agreement of compromise, settlement and release resolving and settling, subject to court approval, both the Edelman and Burns Derivative Actions. The same day, plaintiffs in the Edelman Derivative Action filed their unopposed motion for preliminary approval. The deadline to oppose the motion was October 10, 2025 and no opposition was filed. On October 13, 2025, plaintiffs filed a notice of non-opposition, requesting that the Court enter an order granting the motion for preliminary approval without oral argument, which is currently scheduled for December 2, 2025 in the Edelman Derivative Action. The motion for preliminary approval remains under consideration.

On October 1, 2025 the parties to the Burns Derivative Action filed a third amended stipulation and proposed order to continue the stay in that action through the pendency of a determination on the proposed settlement in the Edelman Derivative Action. The court entered this stipulated order on October 6, 2025.

On December 9, 2025, the Court issued an order preliminarily approving the parties' settlement, subject to resolution of the plaintiffs' request for attorney's fees.

There is no guarantee that the parties will reach a definitive settlement or, if they do, that the settlement will be approved by the Court. In the event there is no settlement, the Company intends to defend itself vigorously. The Company believes that it has good and substantial defenses to the claims alleged in the suits, but there is no guarantee that the Company will prevail. The Company has not recorded liabilities for these suits.

9. STOCKHOLDERS' EQUITY

Shelf Registration Statement

On May 10, 2023, the Company filed a universal shelf registration statement (File No. 333-271814), or the Registration Statement, and thereafter filed post-effective amendments on May 9, 2024 and May 23, 2024. The SEC declared the Registration Statement effective on May 23, 2024, and as a result, the Company can sell from time to time up to $250.0 million of shares of its common stock, preferred stock, debt securities, warrants, units or rights comprised of any combination of these securities, for the Company’s own account in one or more offerings under the Registration Statement. The terms of any offering under the Registration Statement will be established at the time of such offering and will be described in a prospectus supplement to the Registration Statement filed with the SEC prior to the completion of any such offering.

Stock Repurchase Programs

On February 20, 2025, the Company's Board of Directors approved a Stock Repurchase Program, or the February 2025 Repurchase Program, whereby the Company was authorized to purchase up to $50.0 million in shares of its common stock over a period of up totwo years, commencing on February 20, 2025, through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. During the three months ended June 30, 2025, the Company purchased an aggregate of 3.0 million shares of its common stock under the February 2025 Repurchase Program for an aggregate purchase price of$50.0 million.

Following the completion of the February 2025 Repurchase Program, on May 30, 2025, the Company’s Board of Directors authorized a new share repurchase program of up to$50.0 million in shares of its common stock over a period of up totwo years, commencing on May 30, 2025, or the May 2025 Repurchase Program. The May 2025 Repurchase Program may be carried out, subject to approval by a committee of the Company's Board of Directors, through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. During the year ended December 31, 2025, the Company purchased an aggregate of 2.8 million shares of its common stock under the May 2025 Repurchase Program for an aggregate purchase price of $37.8 million. As of December 31, 2025, $12.2 million was available for future share repurchases under the May 2025 Repurchase Program.

During the year ended December 31, 2025, the Company purchased an aggregate of 5.8 million shares of its common stock under the February 2025 and May 2025 Repurchase Programs, for a total purchase price of $87.8 million.

These shares were retired upon repurchase. The Company's policy related to repurchase of its common stock is to charge the excess of cost over par value to accumulated deficit.

Common Stock

Holders of common stock are entitled toone vote per share on all matters to be voted upon by the stockholders of the Company.

Preferred Stock

As of December 31, 2025 and 2024, the Company had 10,000,000 shares of preferred stock authorized with a par value of $0.001 per share. No shares of preferred stock were outstanding as of December 31, 2025 and 2024.

10.401(K) PLAN

The Company sponsors a 401(k) defined contribution plan covering all U.S. employees under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Employee contributions are voluntary and are determined on an individual basis subject to the maximum allowable under federal tax regulations. The Company incurred expenses related to contributions to the plan of $3.8 million, $2.3 million and $1.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.

11. STOCK INCENTIVE PLANS

2025 Inducement Equity Incentive Plan

On November 4, 2025, the Company adopted the 2025 Inducement Equity Incentive Plan, or the 2025 Plan, that allows for the issuance of stock options, restricted stock units, or RSUs, and other stock awards of up to a total of 350,000 shares of common stock to new employees of the Company. The 2025 Plan was adopted to accommodate a reserve of additional shares of common stock for issuance to new employees hired by the Company. There were 68,745 shares of common stock reserved for future issuance under the 2025 Plan as of December 31, 2025.

2024 Equity Incentive Plan

The Company grants stock-based awards under the 2024 Equity Incentive Plan, or the 2024 Plan, that allows for the issuance of stock options, RSUs and other stock awards to the Company’s employees, directors, and consultants.

On November 4, 2025, the Company increased the shares available under the 2024 Plan by 1,600,000 shares.There were 3,047,496 shares of common stock reserved for future issuance under the 2024 Plan as of December 31, 2025.

2019 Inducement Equity Incentive Plan

The Company grants stock-based awards under the 2019 Inducement Equity Incentive Plan, or the 2019 Plan, that allows for the issuance of stock options, RSUs and other stock awards to new employees of the Company. There were 57,204 shares of common stock reserved for future issuance under the 2019 Plan as of December 31, 2025.

2016 Inducement Plan

On April 21, 2016, the Company adopted the 2016 Inducement Equity Incentive Plan, or the 2016 Plan, that allows for the issuance of stock options, RSUs and other stock awards of up to a total of 155,500 shares of common stock to new employees of the Company. The 2016 Plan was adopted to accommodate a reserve of additional shares of common stock for issuance to new employees hired by the Company from Allenex AB. There were 15,495 shares of common stock reserved for future issuance under the 2016 Plan as of December 31, 2025.

The Company has reserved common stock, on an if-converted basis, for issuance as follows:

Stock Options

There wereno stock options granted to employees during 2025.

The following table summarizes stock option activity during the year ended December 31, 2025:

The total intrinsic value of options exercised was $1.5 million, $4.8 million and $0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Options outstanding that have vested and are expected to vest at December 31, 2025 are as follows:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock at December 31, 2025 for stock options that were in-the-money.

Restricted Stock Units and Performance Restricted Stock Units

The following table summarizes RSUs and performance restricted stock units, or PSUs, activity during the year ended December 31, 2025:

The total fair value of RSUs vested during 2025 was $31.8 million. As of December 31, 2025, the total intrinsic value of outstanding RSUs was approximately $68.9 million.

The Company granted PSUs, included in RSUs, under the stock incentive plans. The PSUs granted to employees consist of financial and operational metrics to be met over a performance period oftwo years. The number of shares, based on expected performance achievement, underlying outstanding PSUs was 226,183 and 335,583 as of December 31, 2025 and December 31, 2024, respectively. The weighted-average remaining recognition period was 2.09 years and 1.07 years for the years ended December 31, 2025 and 2024, respectively.

2014 Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan, or the ESPP, under which employees can purchase shares of its common stock based on a percentage of their compensation, but not greater than 15% of their respective earnings, provided that an eligible employee’s right to purchase shares of the Company’s common stock may not accrue at a rate which exceeds $25,000 of the fair market value of such shares for each calendar year in which such rights are outstanding. The ESPP has consecutive offering periods of approximatelysix months in length. The purchase price per share must be equal to the lower of 85% of the fair value of the common stock on the first day of the offering period or on the exercise date.

During the offering period in 2025 that ended on December 31, 2025,61,866 shares were purchased for aggregate proceeds of $1.0 million from the issuance of shares, which occurred on January 2, 2026.

During the offering period in 2025 that ended on June 30, 2025,84,234 shares were purchased for aggregate proceeds of $1.4 million from the issuance of shares, which occurred on June 30, 2025.

During the offering period in 2024 that ended on December 31, 2024,66,747 shares were purchased for aggregate proceeds of $0.9 million from the issuance of shares, which occurred on January 2, 2025.

The Company issued 150,981 shares and 159,019 shares of common stock during the years ended December 31, 2025 and December 31, 2024, respectively, pursuant to the ESPP. The Company received proceeds of $2.4 million and $1.4 million from the purchases of shares during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company had 541,706 shares available for issuance under the ESPP.

Board of Directors Stock Awards Granted for Services

For the years ended December 31, 2025, 2024 and 2023, the Company paid a portion of its directors’ compensation through the award of fully vested common shares. The stock awards are classified as equity, and compensation expense was recognized upon the issuance of the shares at the grant date price per share, which is the fair value. For the years ended December 31, 2025, 2024 and 2023, a total of 4,794,16,582 and 21,965 shares, respectively, were issued to the Company’s directors for a total fair value of $0.1 million, $0.1 million and $0.2 million, respectively, which was included in general and administrative expense on the consolidated statements of operations.

Valuation Assumptions

The estimated fair values of ESPP shares were estimated using the Black-Scholes option pricing model based on the following weighted average assumptions:

Risk-free Interest Rate: The Company based the risk-free interest rate over the expected term of the award based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of grant.

Volatility: The Company used an average historical stock price volatility of its own stock.

Expected Term: The expected term represents the period for which the Company’s stock-based compensation awards are expected to be outstanding and is based on analyzing the vesting and contractual terms of the awards and the holders’ historical exercise patterns and termination behavior.

Expected Dividends: The Company has not paid and does not anticipate paying any dividends in the near future.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense relating to employee and non-employee stock-based awards for the years ended December 31, 2025, 2024 and 2023, included on the consolidated statements of operations as follows (in thousands):

As of December 31, 2025, unrecognized stock-based compensation expense related to stock options, RSUs, and PSUs was approximately $5.5 million, $34.8 million, and $2.3 million, respectively. The remaining unrecognized compensation cost related to the unvested stock options, RSUs, and PSUs is expected to be recognized over a weighted-average period of 2.13 years,2.12 years, and 2.09 years, respectively.

12. INCOME TAXES

The components of the provision for (benefit from) income taxes are summarized as follows (in thousands):

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, the Company's actual provision for tax differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pretax income as a result of the following (in thousands, except for percentages):

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in millions):

The Company determines the amount of state tax liability based on current year operations. In accordance with the guidance under ASU 2023-09, California, Pennsylvania, and New York contributed to a majority of the effect of the state income taxes.

Deferred income tax assets and liabilities consist of the following (in thousands):

The Company assesses the realizability of its net deferred tax assets by evaluating all available evidence, both positive and negative, including (1) cumulative results of operations in recent years, (2) sources of recent losses, (3) estimates of future taxable income and (4) the length of net operating loss carryforward periods. The Company believes that based on the history of its U.S. losses and other factors, the weight of available evidence indicates that it is more likely than not that it will not be able to realize its U.S. net deferred tax assets.

Accordingly, the U.S. and Sweden net deferred tax assets have been offset by a full valuation allowance. The valuation allowance increased by $0.4 million and decreased by $10.6 million during the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company had domestic federal net operating loss carryforwards of $130.8 million, domestic state net operating loss carryforwards of $6.2 million, and foreign net operating loss carryforwards of $29.3 million that can reduce future taxable income. The domestic federal and state net operating loss carryforwards will begin to expire in 2026 and 2027, respectively. The foreign and $111 million of federal net operating loss carryforwards can be carried forward indefinitely.

As of December 31, 2025, the Company had credit carryforwards of approximately $12.4 million and $13.9 million available to reduce future taxable income, if any, for domestic federal and California state income tax purposes, respectively. The domestic federal credit carryforwards will begin to expire in 2026. California credits have no expiration date.

A reconciliation of the Company's unrecognized tax benefits is as follows (in thousands):

None of the $13.5 million of net unrecognized tax benefit as of December 31, 2025, if recognized, would impact the Company's effective tax rate. During the year ended December 31, 2025, given the Company's valuation allowance, the uncertain tax benefits would not have impacted the effective tax rate.

The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryovers, the domestic federal and state income tax returns are subject to tax authority examination from inception. In the foreign jurisdictions where the Company files income tax returns, the statutes of limitations with respect to these jurisdictions vary from jurisdiction to jurisdiction and range from 4 to 6 years.

As of December 31, 2025, the Company had gross unrecognized tax benefits of $13.5 million which included penalties and interest of $0.2 million, of which approximately $0.2 million is recorded as a noncurrent liability. At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities; therefore, such amounts are not included in the above contractual obligation table.

13. SEGMENT REPORTING

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Company’s Chief Operating Decision Maker, or CODM, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its President and Chief Executive Officer as the CODM. In determining its reportable segments, the Company considered the markets and types of customers served and the products or services provided in those markets. The Company has determined that it hasone operating segment, and therefore, one reportable segment.

Revenue by geographic regions are based upon the customers’ ship-to address for product revenue, the region of testing for testing services revenue and the region where the performance obligation is satisfied for patient and digital solutions revenue. The following table summarizes reportable revenue by geographic regions (in thousands):

The following table summarizes long-lived assets, consisting of property and equipment, net, by geographic regions (in thousands):

The CODM assesses the Company’s performance by using net (loss) income. The CODM uses net income (loss) predominately in the annual budget and forecasting process. The Company's objective in making resource allocation decisions is to optimize the consolidated financial results. The CODM considers budget-to-actual variances on a quarterly basis for the profit measure when making decisions. The CODM organizes the business and leaders functionally. The CODM assesses performance and resources are allocated to functions which utilize those allocations across the business's testing services, products and digital solutions offerings.

The following table summarizes the reconciliation to net (loss) income (in thousands):

1 Cost of testing services, cost of product and cost of patient and digital solutions include depreciation expense.

2 Transformational initiative costs consist of consulting expenses which relate to the Company's ongoing transformation strategy that the Company has undertaken as a series of initiatives focused on operational excellence, enterprise-wide efficiency, and long-term strategic growth, including rebranding costs.

3 Other segment items include the following: restructuring costs, acquisition costs, software expenses, corporate expenses, rent and maintenance expense, travel and event related expense, one-time impairment charge on intangible asset and associated construction in progress, and other expenses (income).