BillionToOne, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited financial statements and the related notes included in Item 1 of this Quarterly Report. This discussion and analysis as well as other parts of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, including information with respect to our plans and strategy for our business. You should carefully read the sections titled “Special note regarding forward-looking statements” and “Risk Factors” to gain an understanding of the factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. 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,” “BillionToOne,” or “the Company” here refer to BillionToOne, Inc.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited financial statements and the related notes included in Item 1 of this Quarterly Report. The following discussion and analysis as well as other parts of this Quarterly Report contains forward-looking statements that involve risks, uncertainties and assumptions including information with respect to our plans and strategy for our business. Our actual results and timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those discussed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. See also the section titled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report. Unless context requires otherwise, references to “we,” “us,” “our,” “BillionToOne,” or “the Company” here refer to BillionToOne, Inc.

Previous wording

In the oncology setting, ultrasensitive tests with real-time insights are required to effectively detect, diagnose, and treat patients with a diverse range of mutations and solid tumor types across the cancer care continuum. In 2023, we successfully leveraged our smNGS platform to launch two complementary pan-cancer liquid biopsy tests – Northstar Select® and Northstar Response®. Our Northstar Select test is used to guide therapy selection and has been shown to detect over 50% more actionable solid tumor mutations than conventional liquid biopsies.1,2 Based on our knowledge of all widely available tests, Northstar Response is the only methylation-based assay that quantifies the amount of cancer (tumor burden) at the single molecule level without requiring a tissue biopsy, enabling real-time monitoring of patient response to therapy with unprecedented precision. Our Northstar tests give physicians extraordinary visibility into cancer profile and treatment response, enabling more informed and earlier treatment decisions that can fundamentally alter patient outcomes. Our business momentum is evidenced by our rapidly scaling commercial success and improving operational efficiency. Of approximately one million smNGS-based tests that we have processed since our initial launch, over 50% of them, or approximately 562,900 tests, were processed within the last 12 months ended September 30, 2025. For the year ended December 31, 2024, we generated revenue of $152.6 million, representing 113% year-over-year growth, with a gross margin of 53% and net loss of $41.6 million. While we have generally incurred losses

Current wording

In the oncology setting, ultrasensitive tests with real-time insights are required to effectively detect, diagnose, and treat patients with a diverse range of mutations and solid tumor types across the cancer care continuum. In 2023, we successfully leveraged our smNGS platform to launch two complementary pan-cancer liquid biopsy tests – Northstar Select® and Northstar Response®. Our Northstar Select test is used to guide therapy selection and has been shown to detect over 50% more actionable solid tumor mutations than conventional liquid biopsies. Based on our knowledge of all widely available tests, Northstar Response is the only methylation-based assay that quantifies the amount of cancer (tumor burden) at the single molecule level without requiring a tissue biopsy, enabling real-time monitoring of patient response to therapy with unprecedented precision. Our Northstar tests give physicians extraordinary visibility into cancer profile and treatment response, enabling more informed and earlier treatment decisions that can fundamentally alter patient outcomes. We are actively developing additional diagnostic products to address critical needs across the cancer care continuum. For example, in January 2026, we launched Northstar PGx, and in February 2026, we launched Northstar Select CH. Northstar PGx and Northstar CH are add-on applications for Northstar Select, and expand the Northstar platform beyond genomic profiling to address chemotherapy safety (PGx) and clonal hematopoiesis (CH) — two critical decision points in selecting the right therapy for patients. Our current development efforts focus on MRD detection, leveraging our platform’s exceptional sensitivity to identify trace amounts of tumor DNA following curative-intent surgery in earlier stage cancers. We are developing a tissue-free, pan-cancer MRD test, which we expect to be commercially available in the fourth quarter of 2026.

Previous wording

Our revenue is driven by selling and performing molecular diagnostic tests ordered by physicians and other providers. We generally bill the patients’ insurance carrier, the patient, or a combination of both upon delivery of the test results.

Current wording

Our revenue is driven by selling and performing molecular diagnostic tests ordered by physicians and other providers. We generally bill the patients’ insurance carrier, Medicaid, Medicare, the patient, or a combination upon delivery of the test results.

Previous wording

Our revenue is the function of two inputs: the number of tests ordered and the ASP that we can achieve through reimbursement. There is a flywheel effect between these two factors. The more tests that we process, the easier it becomes for us to contract with third-party payors and become an in-network provider. This increases our ASP for our tests, as the denial rate of our tests significantly decreases once we become an in-network provider. As we become an in-network provider, it becomes easier for our sales representatives to convince ordering providers to use our tests. We believe that the combined effect of ASP increases, cost of goods sold (COGS) decreases, and improved operational efficiency has been the main driver in decreases in our net losses.

Current wording

Our revenue is the function of two inputs: the number of tests ordered and the ASP that we can achieve through reimbursement. There is a flywheel effect between these two factors. The more tests that we process, the easier it becomes for us to contract with third-party payors and become an in-network provider. This increases our ASP for our tests, as the denial rate of our tests significantly decreases once we become an in-network provider. As we become an in-network provider, it becomes easier for our sales representatives to convince ordering providers to use our tests. We believe that the combined effects of ASP increases, cost of goods sold (COGS) decreases, and improved operational efficiency have been the main drivers of our ability to generate net income in recent periods.

Previous wording

Our total test volume, which represents the number of billable tests that we receive for processing during each period and which we also refer to as tests accessioned, grew to approximately 162,900 tests for the three months ended September 30, 2025, compared to 107,900 for the three months ended September 30, 2024. In addition, our total delivered and billable test volume, which represents the number of billable tests for which we deliver a result to the ordering provider each period, grew to approximately 165,000 tests in the three months ended September 30, 2025, compared to 108,500 delivered and billable tests in the three months ended September 30, 2024.

Current wording

Our total test volume, which represents the number of billable tests that we receive for processing during each period and which we also refer to as tests accessioned, grew to approximately 189,000 tests for the three months ended March 31, 2026, compared to 137,000 for the three months ended March 31, 2025. In addition, our total delivered and billable test volume, which represents the number of billable tests for which we deliver a result to the ordering provider each period, grew to approximately 188,000 tests for the three months ended March 31, 2026, compared to 131,000 delivered and billable tests for the three months ended March 31, 2025.

Previous wording

We believe certain factors have influenced, and will continue to influence, our operating performance and results of operations. While each of these factors presents significant opportunities for our business, they also pose important risks and challenges that we must successfully address to sustain and grow our business and improve our results of operations. Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under the section titled “Risk Factors.”

Current wording

We believe certain factors have influenced, and will continue to influence, our operating performance and results of operations. While each of these factors presents significant opportunities for our business, they also pose important risks and challenges that we must successfully address to sustain and grow our business and improve our results of operations. Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under Part I, Item 1A. “Risk Factors.” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

Our ASPs and revenue depend heavily on our success in achieving and maintaining broad coverage and adequate reimbursement for our molecular diagnostic tests from third-party payors. Third-party reimbursement for our tests represented more than 90% of our revenue for the nine months ended September 30, 2025 and the year ended December 31, 2024, and we expect government and commercial third-party payors to continue to be our primary source of payments. Coverage and reimbursement by third-party payors, including commercial health insurers, managed care organizations, and government healthcare programs such as Medicare and Medicaid, can be limited and uncertain for the types of specialized molecular diagnostic tests we offer. Each payor makes its own determination as to whether to establish a policy to cover our tests as well as the amount it will reimburse for such tests. Payors make these determinations based on factors that include medical necessity, clinical utility, and cost-effectiveness. Reimbursement rates vary significantly by test-type, payor, and coverage determination. Historically, our market access and reimbursement teams have pursued strategies to increasing our ASPs by expanding our payor coverage and reimbursement. We believe these strategies will continue to grow our ASPs over time.

Current wording

Our ASPs and revenue depend heavily on our success in achieving and maintaining broad coverage and adequate reimbursement for our molecular diagnostic tests from third-party payors. Third-party reimbursement for our tests represented more than 90% of our revenue for the three months ended March 31, 2026, and we expect government and commercial third-party payors to continue to be our primary source of payments. Coverage and reimbursement by third-party payors, including commercial health insurers, managed care organizations, and government healthcare programs such as Medicare and Medicaid, can be limited and uncertain for the types of specialized molecular diagnostic tests we offer. Each payor makes its own determination as to whether to establish a policy to cover our tests, as well as the amount it will reimburse for such tests. Payors make these determinations based on factors that include medical necessity, clinical utility, and cost-effectiveness. Reimbursement rates vary significantly by test-type, payor, and coverage determination. Historically, our market access and reimbursement teams have pursued strategies to increase our ASPs by expanding our payor coverage and reimbursement. We believe these strategies will continue to grow our ASPs over time.

Previous wording

In addition, we have integrated our internal systems end-to-end, automated many of the repetitive reimbursement procedures, and incorporated AI for significant efficiency improvements (e.g., using large language models (“LLMs”) to read, categorize, and react to thousands of correspondence from insurance companies that we receive every day), allowing our team to significantly increase their productivity. This strategic move not only streamlines our operations and improves cash flow but also allows us to better advocate for the value of our diagnostic tests with payors by providing rapid feedback and responding proactively to evolving reimbursement trends.

Current wording

In addition, we have integrated our internal systems end-to-end, automated many of the repetitive reimbursement procedures, and incorporated AI for significant efficiency improvements (e.g., using large language models (“LLMs”) to read, categorize, and react to thousands of correspondence items from insurance companies that we receive every day), allowing our team to significantly increase their productivity. This strategic move not only streamlines our operations and improves cash flow but also allows us to better advocate for the value of our diagnostic tests with payors by providing rapid feedback and responding proactively to evolving reimbursement trends.

Previous wording

We actively seek ways to continuously reduce our costs-per-test and improve our gross profit margin, long-term profitability, and return on investment. For example, we have reduced COGS per test through automation and optimization of laboratory workflows, successful negotiations with suppliers, and re-design and re-validation of assays with more optimized chemistry or higher-throughput sequencing. Nevertheless, as our test volumes grow, we have made and will continue to make significant investments in state-of-the-art infrastructure to support our growth. In 2023 we successfully expanded our laboratory operations from a single facility with 36,000 square feet in Menlo Park, CA by adding a second laboratory facility in Union City, CA with 90,000 square feet. To further support our growth beyond our current facilities, we have also entered a lease for the construction of 220,000 square feet of laboratory space in Austin, Texas with favorable terms and tenant improvement package. We expect to occupy this facility in 2027, and open in 2028. Once the facility is fully utilized, we expect our potential testing capacity to be nearly triple our current capabilities.

Current wording

We actively seek ways to continuously reduce our costs-per-test and improve our gross profit margin, long-term profitability, and return on investment. For example, we have reduced COGS per test through automation and optimization of laboratory workflows, successful negotiations with suppliers, and re-design and re-validation of assays with more optimized chemistry or higher-throughput sequencing. Nevertheless, as our test volumes grow, we have made and will continue to make significant investments in state-of-the-art infrastructure to support our growth. In 2023 we successfully expanded our laboratory operations from a single facility with 36,000 square feet in Menlo Park, CA by adding a second laboratory facility in Union City, CA with 90,000 square feet. To further support our growth beyond our current facilities, we have also entered a lease for the construction of 220,000 square feet of laboratory space in Austin, Texas with favorable terms and a tenant improvement package. We expect to occupy this facility in 2027, and open for processing commercial samples in 2028. Once the facility is fully utilized, we expect our potential testing capacity to be nearly triple our current capabilities.

Previous wording

Components of Results of Operations

Current wording

Key components of results of operations

Previous wording

The majority of our revenue is derived from sales of our prenatal test, UNITY, and a smaller portion is derived from sales of our liquid biopsy oncology tests, Northstar. Specifically, in 2024, 96% of our revenue was from our prenatal tests, 2% of our revenue was from our oncology tests, and 2% of our revenue was from our clinical trial support and other services. Additionally, during the nine months ended September 30, 2025, approximately 91% of our revenue was from our prenatal tests, 8% of our revenue was from our oncology tests, and 1% of our revenue was from our clinical trial support and other services. We market our products to health clinics and physicians or a combination of the insurance carrier and patient for fees. Revenue for tests is recognized when test results are delivered to the ordering physician.

Current wording

The majority of our revenue is derived from sales of our prenatal test, UNITY, and a smaller portion is derived from sales of our liquid biopsy oncology tests, Northstar. Specifically, during the year ended December 31, 2025, 91% of our revenue was from our prenatal tests, 8% of our revenue was from our oncology tests, and 1% of our revenue was from our clinical trial support and other services. Additionally, during the three months ended March 31, 2026 and 2025, approximately 89% and 95%, respectively, of our revenue was from our prenatal tests, 10% and 4%, respectively, of our revenue was from our oncology tests, and 1% and 1%, respectively, of our revenue was from our clinical trial support and other services. We market our products to health clinics and physicians or a combination of the insurance carrier and patient for fees. Revenue for tests is recognized when test results are delivered to the ordering physician.

Previous wording

Our clinical trial support and other services includes revenue from a strategic partnership with Johnson & Johnson that utilizes our testing capabilities as part of a project to perform clinical trials. Revenue from this strategic partnership agreement is recognized as services are performed and tests are delivered, as well as upon the achievement of certain milestones including (i) receipt of approval of the trial, which was achieved in 2023, (ii) various patient enrollment milestones, and (iii) subsequent full trial completion. Our revenue derived from this agreement has not been material to our results of operations.

Current wording

Our clinical trial support and other services include revenue from strategic partnerships with Johnson & Johnson that utilize our testing capabilities as part of a project to perform clinical trials and the development and commercialization of a companion diagnostic. Revenue from these strategic partnership agreements are recognized as services are performed and costs are incurred. Our revenue derived from these agreements has not been material to our results of operations.

Previous wording

Our cost of revenue consists primarily of expenses related to materials and consumables, test kits, personnel-related expenses such as salaries, stock-based compensation and related benefits for its operations and support personnel, shipping costs, overhead allocations, depreciation expense, facilities-related expenses and other services used in connection delivering the Company’s services.

Current wording

Our cost of revenue consists primarily of expenses related to materials and consumables, test kits, personnel-related expenses such as salaries, stock-based compensation expense and related benefits for its operations and support personnel, shipping costs, overhead allocations, depreciation expense, facilities-related expenses and other services used in connection with delivering our services.

Previous wording

Research and development expenses include costs incurred to develop our technology, clinical samples and conduct clinical studies to develop and support our products. These costs consist primarily of personnel-related expenses such as salaries and related benefits for our product development employees. Research and development expenses also include non-personnel costs such as materials and consumables used for research, clinical third-party services and consulting expenses, and an allocation of our general overhead expenses. These costs are expensed in the period as incurred.

Current wording

Research and development expenses consist primarily of personnel-related expenses such as salaries, stock-based compensation expense and related benefits for our product development employees. Research and development expenses also include non-personnel costs such as materials and consumables used for research, clinical third-party services and consulting expenses, and an allocation of our general overhead expenses. These costs are expensed in the period they are incurred.

Previous wording

Selling, general and administrative expenses consist primarily of personnel-related expenses such as salaries and related benefits for our sales, marketing, and general and administrative employees. Selling, general and administrative expenses also include commission payments, marketing related expenses in promoting our brand and tests, and training costs for the sales employees.

Current wording

Selling, general and administrative expenses consist primarily of personnel-related expenses such as salaries, stock-based compensation expense and related benefits for our sales, marketing, and general and administrative employees. Selling, general and administrative expenses also include our commission payments, marketing related expenses in promoting our brand and tests, and training costs for sales employees. All selling, general and administrative costs are expensed in the period as incurred.

Previous wording

We expect selling, general and administrative expenses to increase in absolute dollars as we increase our sales and marketing personnel, increase product offerings, grow our operations and incur additional expenses associated with operating as a public company. These expenses as a result of operating as a public company include expenses necessary to comply with the rules and regulations applicable to companies listed on Nasdaq and related compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations and other professional services.

Current wording

We expect selling, general and administrative expenses to increase in absolute dollars as we increase our sales and marketing personnel, increase product offerings, grow our operations and incur additional expenses associated with operating as a public company. These expenses are associated with operating as a public company include expenses necessary to comply with the rules and regulations applicable to companies listed on NASDAQ and related compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations and other professional services.

Previous wording

Interest income consists of income earned on our short-term cash and cash equivalents and marketable securities.

Current wording

Interest income consists of income earned on our short-term cash and cash equivalents which include money market funds.

Previous wording

Provision for income taxes consists of U.S. federal, state, and foreign income taxes. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Current wording

Provision for income taxes consists of U.S. federal and state income taxes. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Previous wording

Revenue increased $45.1 million, or 117%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was driven primarily by a 52% increase in the total volume of delivered and billable tests to approximately 165,000 for the three months ended September 30, 2025 from approximately 108,500 for the three months ended September 30, 2024. The increase in revenue was also attributable to an increase in our Overall ASP 3 of 44%.

Current wording

Revenue increased $49.4 million, or 84%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was driven primarily by a 44% increase in the total volume of delivered and billable tests to approximately 188,000 for the three months ended March 31, 2026 from approximately 131,000 for the three months ended March 31, 2025. The increase in revenue was also attributable to an increase in our Overall ASP of 28%. Overall ASP is the weighted average ASP across all of our prenatal and oncology products. It is computed by dividing revenue for our prenatal and oncology tests by the number of tests that are delivered and billable. The number of tests that are delivered and billable in a given period represents the number of billable tests for which we deliver a result to the ordering provider in such period. Furthermore, new agreements with payors entered into in the first quarter of 2026 resulted in an increase in revenue related to expected payments on the reprocessing of claims for tests delivered in the three months ended March 31, 2026 and the year ended December 31, 2025. Revenue related to services performed during the year ended December 31, 2025 that were covered by these payors contributed slightly more than half of the $9.2 million in revenue related to performance obligations satisfied in prior periods for the three months ended March 31, 2026.

Previous wording

The increase in test volume was driven by higher volumes of our prenatal tests primarily as a result of expansion of our sales force for our prenatal products. In addition, volumes for both our Northstar Select and Northstar Response oncology tests increased as a result of expansion of our oncology sales force. The increase in our ASP per test was driven by several factors. For example, we increased the number of contracts compared to last year that we have with payors for our prenatal tests and we continued to benefit from our proprietary PLA code, both of which drove increases in ASP for the three months ended September 30, 2025 compared to the same period in the prior year. We also benefited from an increased attachment and ordering rate of 22q11.2 micro deletion testing (our 22q test) along with our aneuploidy test and the resulting incremental reimbursement, and coverage of our RhD test from more payors. Furthermore, our ASPs for our Northstar Select oncology test increased as Medicare began to reimburse for this test during the first quarter of 2025, and we began to bill for our Northstar Response oncology test for the first time at the beginning of 2025.

Current wording

The increase in test volume was driven by higher volumes of our prenatal tests primarily as a result of the expansion of our sales force for our prenatal products. In addition, volumes for both our Northstar Select and Northstar Response oncology tests increased as a result of the expansion of our oncology sales force. The increase in our ASP per test was driven by several factors. For example, we increased the number of contracts compared to last year that we have with payors for our prenatal tests and we continued to benefit from our proprietary PLA code, both of which drove increases in ASP for the three months ended March 31, 2026 compared to the same period in the prior year.

Previous wording

Cost of revenue increased $6.9 million, or 38%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to an increase of $4.6 million in expenses associated with testing samples and supplies used in processing tests, phlebotomy, and related shipping costs, driven by a higher volume of tests processed; and an increase of $1.5 million in labor and consulting related expenses, including stock-based compensation, which were driven by higher test volumes and an increase in product support.

Current wording

Cost of revenue increased $8.3 million, or 40%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an increase of $5.7 million in expenses associated with testing samples and supplies used in processing tests, phlebotomy, and related shipping costs, driven by a higher volume of tests processed; and an increase of $2.6 million in labor and consulting related expenses, including stock-based compensation, which were driven by higher test volumes and an increase in product support.

Previous wording

Gross profit increased $38.2 million, or 189%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to an increase in tests processed and a higher Overall ASP in conjunction with a lower cost per test as we continued to actively reduce variable expenses and increase efficiency from our fixed costs.

Current wording

Gross profit increased $41.1 million, or 108%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an increase in the number of tests processed and a higher Overall ASP in conjunction with a lower Overall Cost Per Test as we continued to actively reduce variable expenses and increase efficiency from our fixed costs. Overall Cost Per Test is the weighted average cost per test across all of our prenatal and oncology products. It is computed by dividing cost of goods sold for our prenatal and oncology tests by the number of tests that are accessioned. The number of tests that are accessioned in a given period represents the number of billable tests that we receive for processing during such period. We refer to this number as our “Total Test Volume.”

Previous wording

Gross margin increased to 70% for the three months ended September 30, 2025 from 53% for the three months ended September 30, 2024 for the reasons described above.

Current wording

Gross margin increased to 73% for the three months ended March 31, 2026 from 64% for the three months ended March 31, 2025 for the reasons described above.

Previous wording

For the three months ended September 30, 2025, our cost of goods sold consisted of 59% of variable costs and 41% of fixed costs and for the three months ended September 30, 2024 our cost of goods sold consisted of 55% of variable costs and 45% of fixed costs. The increase in variable costs during the period is attributable primarily to an increase in test volume from prenatal testing, partially offset by efficiencies gained in in our lab from the increased test volume in both prenatal and oncology testing.

Current wording

For the three months ended March 31, 2026, our cost of goods sold consisted of 58% of variable costs and 42% of fixed costs and for the three months ended March 31, 2025 our cost of goods sold consisted of 53% of variable costs and 47% of fixed costs. The increase in variable costs during the period is attributable primarily to an increase in test volume from prenatal testing, partially offset by efficiencies gained in our lab from the increased test volume in both prenatal and oncology testing.

Previous wording

Research and development expenses increased $3.4 million, or 36%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to a $2.3 million increase in personnel costs which includes $0.4 million in stock-based compensation expense, a $0.9 million increase in materials, equipment expenses and overhead allocations, and a $0.2 million increase in clinical studies expense. The increase in research and development expenses was primarily driven by an increase in average research and development headcount of 34 employees during the periods presented to support our product development and innovation efforts.

Current wording

Research and development expenses increased $4.3 million, or 41%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to a $2.2 million increase in personnel costs which included $0.6 million in stock-based compensation expense, a $1.6 million increase in materials, equipment expenses and overhead allocations, a $0.3 million increase in consulting and other costs and a $0.2 million increase in clinical studies expense. The increase in research and development expenses was primarily driven by an increase in our average research and development headcount of 30 employees during the periods presented to support our product development and innovation efforts.

Previous wording

Selling, general and administrative expenses increased $12.5 million, or 54%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to a $10.3 million increase in salaries, commissions and related expenditure which includes $1.8 million in stock-based compensation expense, a $1.3 million increase in facilities and other costs, and a $0.9 million increase in professional and consulting fees. The increase in selling, general and administrative expenses was driven by an increase in average selling, general and administrative headcount of 118 employees during the periods presented to support our sales, marketing and other corporate strategies.

Current wording

Selling, general and administrative expenses increased $16.7 million, or 56%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an $12.3 million increase in salaries, commissions and related expenditure which included $3.3 million in stock-based compensation expense, a $2.5 million increase in facilities and other costs, and a $1.9 million increase in professional and consulting fees. The increase in selling, general and administrative expenses was driven by an increase in our average selling, general and administrative headcount of 129 employees during the periods presented to support our sales, marketing and other corporate strategies.

Previous wording

Interest income increased by $0.3 million, or 8%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was due to higher average balances of cash and cash equivalents.

Current wording

Interest income increased by $3.1 million, or 208%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to a higher average balance of cash and cash equivalents, compared to the three months ended March 31, 2025, due to the proceeds from our IPO in November 2025.

Previous wording

Change in fair value of term loan increased $1.7 million, or 72% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was due to a change in fair value of the Oberland Capital debt of $1.3 million and interest expense of $0.4 million.

Current wording

Change in fair value of term loan increased $1.2 million, or 38% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was due to a change in fair value of the Oberland Capital debt of $1.0 million, primarily related to the draw of the third tranche on March 31, 2026, and an increase revenue participation payments of $0.2 million.

Previous wording

We use certain non-GAAP financial measures to supplement our financial statements, which are presented in accordance with GAAP. These non-GAAP financial measures include EBITDA, Adjusted EBITDA, non-GAAP operating income (loss), and non-GAAP net income (loss). We use these non-GAAP financial measures for financial and operational decision-making and as a means to assist us in evaluating period-to-period comparisons. By excluding the impact of certain items that we believe do not directly reflect our underlying operations, we are of the opinion that EBITDA, Adjusted EBITDA, non-GAAP operating income (loss) and non-GAAP net income (loss) provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and forecasting. These metrics also provide investors and other users of our financial information with additional tools to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Current wording

We use certain non-GAAP financial measures to supplement our financial statements, which are presented in accordance with GAAP. These non-GAAP financial measures include EBITDA, Adjusted EBITDA, non-GAAP income (loss) from operations, and non-GAAP net income (loss). We use these non-GAAP financial measures for financial and operational decision-making and as a means to assist us in evaluating period-to-period comparisons. By excluding the impact of certain items that we believe do not directly reflect our underlying operations, we are of the opinion that EBITDA, Adjusted EBITDA, non-GAAP income (loss) from operations and non-GAAP net income (loss) provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and forecasting. These metrics also provide investors and other users of our financial information with additional tools to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance. However, there are a number of limitations related to the use of non-

Previous wording

We define Adjusted EBITDA as net income (loss) adjusted for income taxes, interest income, interest expense, depreciation and amortization expense, and certain other items which include significant non-cash items events that are highly variable, significant in size, and that we do not believe are indicative of ongoing or future business operations, which include: stock-based compensation expense; net gain on extinguishment of debt; change in fair value of term loan; and change in value of convertible notes. A reconciliation of net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA is presented below (in thousands):

Current wording

We define Adjusted EBITDA as net income (loss) adjusted for income taxes, interest income, interest expense, depreciation and amortization expense, and certain other items which include significant non-cash items events that are highly variable, significant in size, and that we do not believe are indicative of ongoing or future business operations, which include: stock-based compensation expense; change in fair value of term loan; and change in fair value of warrant liabilities. A reconciliation of net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA is presented below (in thousands):

Previous wording

We define non-GAAP operating income (loss) as operating income (loss) presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses.

Current wording

We define non-GAAP income (loss) from operations as income (loss) from operations presented in accordance with GAAP, adjusted to exclude stock-based compensation expense.

Previous wording

We monitor non-GAAP net income (loss) for planning and performance measurement purposes. We define non-GAAP net income (loss) as net income (loss) reported on our statements of operations, excluding the impact of stock-based compensation expenses, net gain or loss on extinguishment of debt, change in fair value of the term loan, and change in fair value of convertible notes. We exclude fair value adjustments related to debt, which can fluctuate significantly and do not directly reflect our underlying operations. Our calculation of non-GAAP net income (loss) does not currently include the tax effects of the stock-based compensation expense adjustment because such tax effects have not been material to date.

Current wording

We monitor non-GAAP net income (loss) for planning and performance measurement purposes. We define non-GAAP net income (loss) as net income (loss) reported on our statements of operations, excluding the impact of stock-based compensation expense, change in fair value of the term loan, and change in fair value of convertible notes. We exclude fair value adjustments related to debt, which can fluctuate significantly and do not directly reflect our underlying operations. Our calculation of non-GAAP net income (loss) does not currently include the tax effects of the stock-based compensation expense adjustment because such tax effects have not been material to date.

Previous wording

Since our inception, prior to our IPO, we have financed our operations primarily through the issuance of convertible notes, redeemable convertible preferred stock, debt, and cash generated from the sale of our products. As of September 30, 2025, our principal sources of liquidity were cash and cash equivalents of $195.2 million and working capital of $210.9 million. On November 7, 2025, we closed our IPO of our Class A common stock. The total net proceeds received were approximately $286.4 million after deducting underwriting discounts, commissions and offering expenses payable by us. Cash and cash equivalents are comprised of cash held in sweep accounts, checking accounts, lock-box accounts and money market funds. Our principal use of cash is to fund operations and invest in research and development to support our growth.

Current wording

Since our inception, prior to our IPO, we financed our operations primarily through the issuance of convertible notes, redeemable convertible preferred stock, debt, and cash generated from the sale of our products. As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $537.5 million and working capital of $567.0 million. On November 7, 2025, we closed our IPO of our Class A common stock. The total net proceeds received were approximately $286.9 million after deducting underwriting discounts, commissions and offering expenses payable by us. Cash and cash equivalents are comprised of cash held in sweep accounts, checking accounts, lock-box accounts and money market funds. Our principal use of cash is to fund operations and invest in research and development to support our growth.

Previous wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $280.7 million as of September 30, 2025, though we did have positive operating income and positive cashflow in the nine months ended September 30, 2025. We believe our current cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements, however, will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, the continuing market acceptance of our products, and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be adversely affected.

Current wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $256.8 million as of March 31, 2026. While we did have positive income from operations and positive cash flows in the three months ended March 31, 2026, we may be unable to sustain positive income from operations and positive cash flows in future periods. We believe our current cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements, however, will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, the continuing market acceptance of our products, and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be adversely affected.

Previous wording

We have a debt facility with availability of up to $140.0 million, issuable in four separate tranches, pursuant to a Note Purchase Agreement, dated as of August 2, 2024, by and among us, the purchasers party thereto, and BWCB SA LLC (an entity affiliated with Oberland Capital), as purchaser’s agent. The advanced principal accrues interest at a rate of 8.0% per annum. The first tranche of $50.0 million was advanced on August 5, 2024, with a maturity date of August 5, 2031, interest-only payments through August 5, 2031 and a lump sum payment due on August 5, 2031. The lump sum payment includes all of the outstanding principal plus a payment that would generate an IRR for the purchasers of 10.0%. The term loan advances are secured by a lien on our assets.

Current wording

We have a debt facility with availability of up to $140.0 million, issuable in four separate tranches, pursuant to a Note Purchase Agreement, dated as of August 2, 2024, by and among us, the purchasers party thereto, and BWCB SA LLC (an entity affiliated with Oberland Capital), as purchaser’s agent. The advanced principal accrues interest at a rate of 8.0% per annum. The first tranche of $50.0 million was advanced on August 5, 2024, with a maturity date of August 5, 2031, interest-only payments through August 5, 2031 and a lump sum payment due on August 5, 2031. The lump sum payment includes all of the outstanding principal plus a payment that would generate an internal rate of return ("IRR") for the purchasers of 10.0%. The term loan advances are secured by a lien on our assets.

Previous wording

We are required to sell a tranche of notes in the amount of $30.0 million prior to March 31, 2026 as we achieved the revenue and gross margin thresholds triggering this obligation on June 30, 2025 based on our results for the first half of 2025. The thresholds triggering this tranche are trailing six-month revenue of at least $112.5 million and a trailing six-month gross margin of at least 45%. The terms of this tranche are identical to those of the first $50.0 million tranche.

Current wording

We were required to sell a tranche of notes in the amount of $30.0 million prior to March 31, 2026 as we achieved the revenue and gross margin thresholds triggering this obligation on June 30, 2025 based on our results for the first half of 2025. The thresholds triggering this tranche were trailing six-month revenue of at least $112.5 million and a trailing six-month gross margin of at least 45%. The third tranche of $30.0 million was advanced on March 31, 2026, with a maturity date of August 5, 2031, interest-only payments through August 5, 2031 and a lump sum payment due on August 5, 2031. The terms of this tranche are identical to those of the first $50.0 million tranche. We did not elect the option to draw on the fourth tranche.

Previous wording

We have the option at any time to prepay all of the then-outstanding notes, and Oberland Capital has the option to redeem the notes upon a change in control of the Company, an event of default, or maturity. The repayment amount of the note shall equal: (1) 130% of the principal amount if the payment is made within 24 months of issuance; (2) 145% of the principal amount if the payment is made within 36 months of issuance; (3) if the payment is made within 48 months, an amount that would generate an internal rate of return (“IRR”) for the purchasers of 12.25%; (4) if the payment is made within 60 months of the issuance, an amount that would generate an IRR for the purchasers of 11.75%; (5) if the payment is made thereafter but prior to maturity, an amount that would generate an IRR for the purchasers of 11.25%; and (6) if the payment is made at maturity, an amount that would generate an IRR for the purchasers of 10.0%.

Current wording

We have the option at any time to prepay all of the then-outstanding notes, and Oberland Capital has the option to redeem the notes upon a change in control of the Company, an event of default, or maturity. The repayment amount of the note shall equal: (1) 130% of the principal amount if the payment is made within 24 months of issuance; (2) 145% of the principal amount if the payment is made within 36 months of issuance; (3) if the payment is made within 48 months, an amount that would generate an IRR for the purchasers of 12.25%; (4) if the payment is made within 60 months of the issuance, an amount that would generate an IRR for the purchasers of 11.75%; (5) if the payment is made thereafter but prior to maturity, an amount that would generate an IRR for the purchasers of 11.25%; and (6) if the payment is made at maturity, an amount that would generate an IRR for the purchasers of 10.0%.

Previous wording

Beginning with the fiscal quarter ended March 31, 2025, excluding any fiscal quarter in which our aggregate cash and cash equivalents is greater than 1.1 times the aggregate principal amount of the notes issued under the Note Purchase Agreement, we are required to maintain trailing six-month net revenue based on a schedule that gradually increases up to $120.0 million after the year ending December 31, 2026, and a trailing six-month gross margin (as defined in the Note Purchase Agreement) of not less than 30%. As of September 30, 2025, we were in compliance with all financial covenants in the agreement. The Note Purchase Agreement also contains a revenue participation provision, under which, for any fiscal quarter, 0.01% of net revenue for such fiscal quarter (up to $100.0 million of net revenue for each fiscal year) per each $1.0 million principal amount of the notes will be payable to Oberland Capital. The revenue participation payments are additional financing costs of the loan and are included in the computation of the internal rate of return measures described in the preceding paragraph. Beginning with the fiscal year beginning January 1, 2025, we are required to make revenue participation payments under the Note Purchase Agreement.

Current wording

Beginning with the fiscal quarter ended March 31, 2025, excluding any fiscal quarter in which our aggregate cash and cash equivalents is greater than 1.1 times the aggregate principal amount of the notes issued under the Note Purchase Agreement, we are required to maintain trailing six-month net revenue based on a schedule that gradually increases up to $120.0 million as of December 31, 2026, and a trailing six-month gross margin (as defined in the Note Purchase Agreement) of not less than 30%. As of March 31, 2026, we were in compliance with all financial covenants in the agreement. The Note Purchase Agreement also contains a revenue participation provision, under which, for any fiscal quarter, 0.01% of net revenue for such fiscal quarter (up to $100.0 million of net revenue for each fiscal year) per each $1.0 million principal amount of the notes will be payable to Oberland Capital. The revenue participation payments are additional financing costs of the loan and are included in the computation of the internal rate of return measures described in the preceding paragraph. Beginning with the fiscal year beginning January 1, 2025, we are required to make revenue participation payments under the Note Purchase Agreement.

Previous wording

Cash provided by operating activities during the nine months ended September 30, 2025 was $13.8 million. Net income of $1.5 million includes $23.6 million in non-cash charges primarily resulting from $9.6 million of stock- based compensation, $5.2 million of depreciation and amortization, $3.7 million of amortization of right-of-use assets, and $4.9 million change in fair value of the common stock warrant liability and term loan. Operating assets had outflows of $20.4 million primarily resulting from a $9.9 million increase in accounts receivable, $8.7 million increase in inventory, $1.7 million increase in prepaid expenses and other current assets, and $0.1 million increase in other non-current assets. Operating liabilities had inflows of $9.1 million primarily resulting from a $12.5 million increase in accounts payable and accrued expense balances, offset by a $3.2 million decrease in operating lease liabilities.

Current wording

Net cash provided by operating activities during the three months ended March 31, 2025 was $2.6 million. Net loss of $4.0 million included $7.1 million in non-cash charges primarily resulting from $2.4 million of stock-based compensation, $1.8 million of depreciation and amortization, $1.2 million of amortization of right-of-use assets, and aggregate $1.7 million of change in fair value of the common stock warrant liability, term loan and convertible notes. Operating assets had outflows of $8.0 million primarily resulting from a $4.9 million increase in accounts receivable, $3.3 million increase in inventory, and $0.3 million increase in other non-current assets, offset by a $0.5 million decrease in prepaid and other current assets. Operating liabilities had inflows of $7.5 million primarily resulting from an $8.7 million increase in accounts payable and accrued expense balances, offset by a $1.1 million decrease in operating lease liabilities and $0.2 million decrease in deferred revenue.

Previous wording

Cash used in investing activities during the nine months ended September 30, 2025 totaled $7.3 million due to purchases of property and equipment.

Current wording

Net cash used in investing activities during the three months ended March 31, 2026 totaled $4.5 million due to purchases of property and equipment.