CASTLE BIOSCIENCES INC 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rates fluctuations. We had cash and cash equivalents of $85.6 million as of September 30, 2025, which include bank deposits and money market funds. We had marketable investment securities of $202.0 million as of September 30, 2025, which include U.S. government securities. Due to the nature of these instruments, we believe that we have no material exposure to interest rate risk. We had a term debt of $10.0 million as of September 30, 2025, consisting of an outstanding term loan which bears interest at a floating rate that fluctuates with the WSJ Prime Rate, subject to an interest rate floor of 6.00%. In September 2025, the U.S. Federal Reserve lowered interest rates by 25 basis points, lowering the target for key lending rates by quarter a percent and the WSJ Prime Rate decreased by 25 basis points thereafter. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our financial statements. Inflation Risk Our exposure to inflationary pressures is primarily in personnel and related costs. The extent of any future impacts from inflation on our business and our results of operations will be dependent upon how long the elevated inflation levels persist and if the rate of inflation were to further increase, neither of which we are able to predict. If elevated levels of inflation were to persist or if the rate of inflation were to accelerate, the purchasing power of our cash and cash equivalents may be eroded, our expenses could increase faster than anticipated and we may utilize our capital resources sooner than expected. Further, given the complexities of the reimbursement landscape in which we operate, our payors may be unwilling or unable to increase reimbursement rates to compensate for inflationary impacts. Equity Price Risk As of September 30, 2025, we had equity securities with a total fair value of $8.9 million. A hypothetical 10% decrease in the market price of our equity securities as of September 30, 2025 would decrease the fair value by approximately $0.9 million. These securities are subject to a wide variety and number of market-related risks that could substantially reduce or increase the fair value of our holdings. We are also exposed to market risk related to changes in foreign currency exchange rates. We do not currently hedge our foreign currency exchange rate risk. 45 Table of Contents