What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-06 compared with 2025-11-03 · 204 added, 307 removed, 561 unchanged (48% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

ASSETS (unaudited)

30 unchanged sentences

Preferred stock, $ 0.001 par value per share;

10,000,000 shares authorized as of September 30, 2025 and December 31, 2024;

no shares issued and outstanding as of September 30, 2025 and December 31, 2024

10,000,000 shares authorized as of March 31, 2026 and December 31, 2025;

no shares issued and outstanding as of March 31, 2026 and December 31, 2025

Common stock, $ 0.001 par value per share;

200,000,000 shares authorized as of September 30, 2025 and December 31, 2024;

29,161,863 and 28,483,195 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

200,000,000 shares authorized as of March 31, 2026 and December 31, 2025;

30,295,965 and 29,686,314 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 700,255 694,860

Accumulated deficit ( 238,806 ) ( 224,284 )

Accumulated other comprehensive income 240 230

Accumulated other comprehensive (loss) income ( 63 ) 267

Total stockholders’ equity 461,416 470,873

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

NET REVENUES $ 83,679 $ 87,988

5 unchanged sentences

Total operating expenses, net 102,086 115,916

Operating (loss) income ( 6,804 ) 5,079 ( 38,983 ) 4,620

Operating loss ( 18,407 ) ( 27,928 )

Interest income 2,545 3,099

Changes in fair value of equity securities 3,561 — 3,321 —

Net gains (losses) on equity securities 2,022 ( 1,425 )

Interest expense ( 134 ) ( 17 )

Other expense 48 — 48 —

(Loss) income before income taxes ( 386 ) 8,282 ( 26,800 ) 13,679

Other loss ( 439 ) —

Loss before income taxes ( 14,413 ) ( 26,271 )

Income tax expense (benefit) 109 ( 423 )

Net (loss) income $ ( 501 ) $ 2,269 $ ( 21,826 ) $ 8,655

Earnings (loss) per share:

Basic $ ( 0.02 ) $ 0.08 $ ( 0.76 ) $ 0.31

Diluted $ ( 0.02 ) $ 0.08 $ ( 0.76 ) $ 0.30

Weighted-average shares outstanding:

Basic 29,073 27,840 28,868 27,659

Diluted 29,073 29,401 28,868 28,838

Net loss $ ( 14,522 ) $ ( 25,848 )

Loss per share, basic and diluted

$ ( 0.49 ) $ ( 0.90 )

Weighted-average shares outstanding, basic and diluted

29,889 28,609

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CASTLE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net (loss) income $ ( 501 ) $ 2,269 $ ( 21,826 ) $ 8,655

Other comprehensive income:

Net unrealized gain on marketable investment securities 201 645 10 337

Comprehensive (loss) income $ ( 300 ) $ 2,914 $ ( 21,816 ) $ 8,992

Net loss $ ( 14,522 ) $ ( 25,848 )

Other comprehensive loss:

Net unrealized loss on marketable investment securities ( 330 ) ( 99 )

Comprehensive loss $ ( 14,852 ) $ ( 25,947 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

12 unchanged sentences

Exercise of common stock options 6,331 — 18 — — 18

Issuance of common stock from vested restricted stock units and payment of employees’ taxes 44,830 — ( 474 ) — — ( 474 )

Issuance of common stock from vested restricted stock units, net of shares withheld for taxes 251,970 1 ( 2,517 ) — — ( 2,516 )

Issuance of common stock under the employee stock purchase plan 103,441 — 1,737 — — 1,737

3 unchanged sentences

28,844,937 $ 29 $ 666,120 $ ( 225,974 ) $ 131 $ 440,306

Stock-based compensation expense — — 13,179 — — 13,179

Exercise of common stock options 1,779 — 8 — — 8

Issuance of common stock from vested restricted stock units and payment of employees’ taxes 123,576 — ( 615 ) — — ( 615 )

Net unrealized loss on marketable investment securities — — — — ( 61 ) ( 61 )

Net income — — — 8,920 — 8,920

BALANCE, JUNE 30, 2024

27,711,024 $ 28 $ 636,022 $ ( 211,985 ) $ ( 172 ) $ 423,893

Stock-based compensation expense — — 13,027 — — 13,027

Exercise of common stock options 90,378 — 1,571 — — 1,571

Issuance of common stock from vested restricted stock units, performance stock units and payment of employees’ taxes 117,959 — ( 1,294 ) — — ( 1,294 )

Issuance of common stock under the employee stock purchase plan 56,447 — 944 — — 944

Net unrealized gain on marketable investment securities — — — — 645 645

Net income — — — 2,269 — 2,269

BALANCE, SEPTEMBER 30, 2024

27,975,808 $ 28 $ 650,270 $ ( 209,716 ) $ 473 $ 441,055

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CASTLE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

Common Stock Additional

8 unchanged sentences

Exercise of common stock options 28,494 — 322 — — 322

Issuance of common stock from vested restricted stock units and payment of employees’ taxes 251,970 1 ( 2,517 ) — — ( 2,516 )

Issuance of common stock from vested restricted stock units and performance-based restricted stock units, net of shares withheld for taxes 486,737 — ( 6,598 ) — — ( 6,598 )

Issuance of common stock under the employee stock purchase plan 94,420 1,895 — — 1,895

3 unchanged sentences

30,295,965 $ 30 $ 700,255 $ ( 238,806 ) $ ( 63 ) $ 461,416

Stock-based compensation expense — — 11,208 — — 11,208

Exercise of common stock options 10,664 — 19 — — 19

Issuance of common stock from vested restricted stock units and payment of employees’ taxes 125,550 — ( 588 ) — — ( 588 )

Net unrealized loss on marketable investment securities — — — — ( 92 ) ( 92 )

Net income — — — 4,523 — 4,523

BALANCE, JUNE 30, 2025

28,981,151 $ 29 $ 676,759 $ ( 221,451 ) $ 39 $ 455,376

Stock-based compensation expense — — 12,100 — — 12,100

Exercise of common stock options 4,000 — 77 — — 77

Issuance of common stock from vested restricted stock units, performance stock units and payment of employees’ taxes 119,255 — ( 1,185 ) — — ( 1,185 )

Issuance of common stock under the employee stock purchase plan 57,457 — 978 — — 978

Net unrealized gain on marketable investment securities — — — — 201 201

Net loss — — — ( 501 ) — ( 501 )

BALANCE, SEPTEMBER 30, 2025

29,161,863 $ 29 $ 688,729 $ ( 221,952 ) $ 240 $ 467,046

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

OPERATING ACTIVITIES

Net (loss) income $ ( 21,826 ) $ 8,655

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net loss $ ( 14,522 ) $ ( 25,848 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 3,929 29,764

Stock-based compensation expense 9,776 11,179

Change in fair value of equity securities ( 3,321 ) —

Net (gains) losses on equity securities ( 2,022 ) 1,425

Deferred income taxes ( 10 ) ( 770 )

Accretion of discounts on marketable investment securities ( 454 ) ( 1,435 )

Other 282 208

Change in operating assets and liabilities:

8 unchanged sentences

Other accrued and current liabilities 2,755 1,141

Net cash provided by operating activities 37,416 40,501

Net cash used in operating activities ( 22,129 ) ( 6,036 )

INVESTING ACTIVITIES

2 unchanged sentences

Purchases of debt securities classified as held-to-maturity — ( 5,569 )

Asset acquisition, net of cash and cash equivalents acquired ( 18,726 ) —

Proceeds from sale of equity securities 2,681 —

Purchases of property and equipment ( 12,455 ) ( 4,740 )

3 unchanged sentences

Proceeds from exercise of common stock options 322 18

Payment of employees’ taxes on vested restricted stock units ( 4,289 ) ( 2,383 )

Payment of employees’ taxes on vested restricted stock units and performance-based restricted stock units ( 6,598 ) ( 2,515 )

Proceeds from contributions to the employee stock purchase plan 1,267 970

Repayment of principal portion of finance lease liabilities ( 24 ) ( 26 )

Proceeds from lease incentives received 190 —

Proceeds from issuance of term debt — 10,000

Net cash (used in) provided by financing activities ( 2,371 ) 11,524

Net cash used in financing activities ( 5,033 ) ( 1,553 )

NET CHANGE IN CASH AND CASH EQUIVALENTS ( 52,965 ) ( 30,020 )

5 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Asset acquisition, liability for contingent consideration $ 2,500 $ —

Accrued purchases of property and equipment $ 4,097 $ 3,217

Operating lease assets obtained in exchange for lease obligations $ 4,687 $ 607

Decrease in operating lease assets with corresponding change in lease liabilities $ ( 104 ) $ ( 7 )

Finance lease assets obtained in exchange for lease obligations $ — $ 44

Property and equipment acquired with tenant improvement allowance $ 7,224 $ 1,389

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

We have a history of recurring net losses and negative cash flows and as of September 30, 2025, we had an accumulated deficit of $ 222.0 million.

We believe our $ 85.6 million of cash and cash equivalents and $ 202.0 million of marketable investment securities as of September 30, 2025, and anticipated revenue from our test reports, will be sufficient to meet our cash requirements through at least the 12-month period following the date that these unaudited condensed consolidated financial statements were issued.

We have a history of recurring net losses and negative cash flows and as of March 31, 2026, we had an accumulated deficit of $ 238.8 million.

We believe our $ 63.8 million of cash and cash equivalents and $ 197.9 million of marketable investment securities as of March 31, 2026, and anticipated revenue from our test reports, will be sufficient to meet our cash requirements through at least the 12-month period following the date that these unaudited condensed consolidated financial statements were issued.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of September 30, 2025;

the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive (loss) income and the condensed consolidated statements of stockholders’ equity, each for the three and nine months ended September 30, 2025 and 2024;

and the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our consolidated financial position as of September 30, 2025, the results of our consolidated operations for the three and nine months ended September 30, 2025 and 2024 and our consolidated cash flows for the nine months ended September 30, 2025 and 2024.

The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2025 and 2024 are also unaudited.

The results for the three and nine months ended September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

The accompanying condensed consolidated balance sheet as of March 31, 2026;

the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss and the condensed consolidated statements of stockholders’ equity, each for the three months ended March 31, 2026 and 2025;

and the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our consolidated financial position as of March 31, 2026, the results of our consolidated operations for the three months ended March 31, 2026 and 2025 and our consolidated cash flows for the three months ended March 31, 2026 and 2025.

The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are also unaudited.

The results for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period.

The balance sheet as of December 31, 2025 included herein was derived from the audited financial statements as of that date.

17 unchanged sentences

Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less.

Our cash equivalents consist of money market funds, which are not insured by the Federal Deposit Insurance Corporation (“FDIC”), that are primarily invested in short-term U.S.

government obligations.

Our cash equivalents consist of money market funds, which are not insured by the Federal Deposit Insurance Corporation (“FDIC”), that are primarily invested in short-term United States (“U.S.”) government obligations.

Cash deposits at financial institutions may exceed the amount of insurance provided by the FDIC.

12 unchanged sentences

Our equity securities consist of investments in shares of common stock which are listed and traded on the Nasdaq Global Market and certain foreign exchanges.

All equity securities are recognized in accordance with ASC Topic 321, Investments-Equity Securities (“ASC 321”) and reported at their readily determinable fair values based on quoted market prices where changes in fair value are included in changes in fair value of equity securities in the condensed consolidated statements of operations.

All equity securities are recognized in accordance with ASC Topic 321, Investments-Equity Securities (“ASC 321”) and reported at their readily determinable fair values based on quoted market prices where changes in fair value are included in net gains (losses) on equity securities in the condensed consolidated statements of operations.

For investments denominated in a foreign currency, the fair value is remeasured into U.S.

dollars using exchange rates in effect at each balance sheet date in accordance with ASC Topic 830, Foreign Currency Matters .

dollars using exchange rates in effect at each balance sheet date in accordance with ASC Topic 830, Foreign Currency Matters (“ASC 830”).

As a result, changes in fair value include the effects of both market price movements and foreign currency exchange rate fluctuations.

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We assess acquisitions under ASC Topic 805, Business Combinations (“ASC 805”) , to determine whether a transaction represents the acquisition of assets or a business combination.

Under this guidance, we apply a two-step model.

The first step involves a screening test where we evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single asset or a group of similar assets.

If the screening test is met, we account for the set as an asset acquisition.

If the screening test is not met, we apply the second step of the model to determine if the set meets the definition of a business based on the guidance in ASC 805.

If so, the transaction is treated as a business combination.

Otherwise, it is treated as an asset acquisition.

Asset acquisitions are accounted for by allocating the cost of the acquisition, including transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis without recognition of goodwill.

If the total consideration transferred is less than the aggregate fair value of the net assets acquired (i.e., a bargain purchase), the difference is not recognized as a gain.

Instead, the difference is allocated to the cost of the acquired assets on a relative fair value basis.

Business combinations are accounted for using the acquisition method.

Under the acquisition method, goodwill is measured as a residual amount equal to the fair value of the consideration transferred less the net recognized fair value of the identifiable assets acquired and the liabilities assumed, as of the acquisition date, and transaction costs are expensed as incurred.

Contingent Consideration

Under the terms of business combinations or asset acquisitions, we may be required to pay additional consideration if specified future events occur or certain conditions are met.

In May 2025, we acquired Capsulomics, Inc., d/b/a Previse (“Capsulomics”), which was recorded as an asset acquisition, and agreed to pay additional consideration of up to $ 2.5 million in cash based on the achievement of certain commercial milestones (the “Earnout Payments”).

In May 2025, we acquired Capsulomics, Inc., d/b/a Previse (“Previse”), which was recorded as an asset acquisition, and agreed to pay additional consideration of up to $ 2.5 million in cash based on the achievement of certain commercial milestones (the “Earnout Payments”).

We account for the contingent consideration as a liability in accordance with ASC 450-20, Loss Contingencies (“ASC 450-20”) when it is both probable and reasonably estimable.

1 unchanged sentence

These changes are allocated to the acquired assets based on their relative fair values as of the date of acquisition.

In December 2025 and March 2026, two commercial milestones were achieved, resulting in aggregate Earnout Payments of $ 1.0 million becoming payable.

The payment related to the initial milestone was extended.

Both earnout payments are expected to be made within 60 days following the end of the period.

Contingent consideration is classified as current or noncurrent in the condensed consolidated balance sheets based on the contractual timing of future settlement.

12 unchanged sentences

To the extent the arrangement is within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”), we assess whether aspects of the arrangement are within the scope of other accounting literature.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In June 2025, we entered into a Collaboration and License Agreement with SciBase Holding AB (“SciBase”).

Following approval under the Swedish Screening of Foreign Direct Investments Act in the third quarter of 2025, subsequent to approval, we completed our investment in SciBase.

Following approval under the Swedish Screening of Foreign Direct Investments Act in the third quarter of 2025, we completed our investment in SciBase.

The agreement aims to jointly develop diagnostic tests for dermatologic diseases, initially focused on atopic dermatitis, by combining SciBase’s Electrical Impedance Spectroscopy technology with our diagnostic and development expertise.

6 unchanged sentences

Other elements, such as shared development activities and cost reimbursements, are accounted for in accordance with ASC 808 and presented as reductions to research and development (“R&D”) expenses.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable and Allowance for Credit Losses

2 unchanged sentences

We accrue an allowance for credit losses against our accounts receivable based on management’s current estimate of amounts that will not be collected.

Management’s estimates are typically based on historical loss information adjusted for current conditions.

We have elected the practical expedient under ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”) to assume that current conditions as of the balance sheet date do not change for the remaining life of our accounts receivable.

Accordingly, management’s estimates are based on historical loss information adjusted for current conditions.

We generally do not perform evaluations of customers’ financial condition and generally do not require collateral.

Historically, our credit losses have not been significant.

The allowance for credit losses was zero as of September 30, 2025 and December 31, 2024.

The allowance for credit losses was zero as of March 31, 2026 and December 31, 2025.

Adjustments for implicit price concessions attributable to variable consideration, as discussed below, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for credit losses.

Convertible Loan Receivable

On November 7, 2025, we entered into a Convertible Loan Agreement with SciBase (the “Convertible Loan Receivable”), pursuant to which we loaned SEK 20.0 million, approximately $ 2.1 million based on the exchange rate in effect on November 7, 2025.

The Convertible Loan Receivable bears interest at a rate of 2.00 % plus the three-month Stockholm Interbank Offered Rate (“STIBOR”), payable quarterly.

SciBase may prepay all or a portion of the Convertible Loan Receivable at any time.

The Convertible Loan Receivable matures on November 7, 2030, at which time we have the option, at our sole discretion, to convert the outstanding principal plus accrued interest into shares of SciBase that are listed on the Nasdaq First North Growth Market in Sweden, receive full repayment in cash, or receive a combination of cash and shares.

We accounted for the convertible loan as a receivable within the scope of ASC Topic 310, Receivables.

The carrying amount of the convertible loan is presented at amortized cost, within other assets - long-term in the condensed consolidated balance sheets.

The Convertible Loan Agreement is remeasured into U.S.

dollars using exchange rates in effect at each balance sheet date in accordance with ASC 830 with changes in exchange rates recognized in earnings.

In addition, the embedded conversion feature to shares of SciBase did not meet the definition of a derivative and was not bifurcated from the host contract under ASC Topic 815, Derivatives and Hedging .

We have determined that expected credit losses associated with the loan are insignificant and, accordingly, have not recorded a credit loss allowance under ASC Topic 326-20, Financial Instruments - Credit Losses.

Interest income on the Convertible Loan Receivable is recognized quarterly and included in interest income in the condensed consolidated statements of operations.

Accrued interest receivable is recorded within prepaid expenses and other current assets in the condensed consolidated balance sheets.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between five and ten years .

Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the lease.

Our leasehold improvements primarily relate to our office and laboratory facilities located in Friendswood, Texas, Phoenix, Arizona and Pittsburgh, Pennsylvania, and are generally depreciated over the remaining lease terms, which end in 2026, 2034 and 2033, respectively.

Maintenance and repairs are charged to expense as incurred, and material improvements are capitalized.

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally ranging from 5 to 39 years.

Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the term of the lease.

Leasehold improvements primarily relate to office and laboratory facilities in Phoenix, Arizona and Pittsburgh, Pennsylvania , and are generally depreciated over the remaining lease terms, which expire in 2034 and 2033, respectively.

Maintenance and repairs are expensed as incurred, and material improvements are capitalized.

Interest costs incurred during the construction of major capital projects are capitalized until the underlying asset is ready for its intended use, at which point the capitalized interest costs are amortized using the straight-line method over the estimated useful life of the underlying asset.

When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the condensed consolidated balance sheet and any resulting gain or loss is reflected in the condensed consolidated statements of operations in the period realized.

When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the condensed consolidated balance sheets and any resulting gain or loss is reflected in the condensed consolidated statements of operations in the period realized.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination.

2 unchanged sentences

Events and changes in circumstances indicating that goodwill may be impaired include sustained declines in the price of our common stock, increased competition, changes in macroeconomic developments, unfavorable government or regulatory developments and changes in coverage or reimbursement conditions.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Goodwill is tested for impairment at the reporting unit level where goodwill is held.

10 unchanged sentences

We also accrue for liabilities under employee sales incentive bonus plans with accruals based on performance achieved to date compared to established targets.

As of September 30, 2025 and December 31, 2024, we accrued approximately $ 21.8 million and $ 23.3 million, respectively, for liabilities associated with these bonus plans.

As of March 31, 2026 and December 31, 2025, we accrued approximately $ 7.9 million and $ 28.1 million, respectively, for liabilities associated with these bonus plans.

These amounts are classified as current accrued liabilities in the condensed consolidated balance sheets based on the expected timing of payment.

9 unchanged sentences

The requisite service period for PSUs is based on an analysis of vesting requirements and performance conditions for the particular award.

Certain employees are entitled to acceleration of vesting of a portion of their awards upon retirement, subject to age, service and notice requirements.

Stock-based awards falling into the scope of the Retirement Policy (as defined in Note 13) are accounted for as a modification of existing awards under ASC Topic 718, Compensation – Stock Compensation .

Certain employees are entitled to acceleration of vesting of a portion of their awards upon retirement, subject to age, service and notice requirements (“Retirement Policy”).

Stock-based awards falling into the scope of the Retirement Policy are accounted for as a modification of existing awards under ASC Topic 718, Compensation – Stock Compensation .

The modifications do not result in the recognition of incremental compensation cost;

2 unchanged sentences

Forfeitures are accounted for as they occur.

Comprehensive (Loss) Income

Comprehensive (loss) income is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources.

Comprehensive (loss) income is made up of net (loss) income plus net unrealized gain or loss on marketable investment securities, which is our only other item of other comprehensive (loss) income.

Accounting Pronouncements Yet to be Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for the Company prospectively to all annual periods beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact this update will have on the consolidated financial statements and disclosures.

Comprehensive Loss

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources.

Comprehensive loss is made up of net loss plus net unrealized loss on marketable investment securities, which is our only other item of other comprehensive loss.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments— Credit Losses (Topic 326):

Practical Expedient for Certain Current Receivables (“ASU 2025-05”), which provides a practical expedient for estimating expected credit losses on current accounts receivable and contract assets arising from transactions under ASC 606.

The practical expedient allows entities to assume that current conditions remain unchanged over the remaining life of the receivables.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods.

We adopted the standard effective January 1, 2026, with no impact on our consolidated financial statements.

Accounting Pronouncements Yet to be Adopted

In November 2024, the FASB issued ASU No.

5 unchanged sentences

We are currently evaluating the impact this update will have on the consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments— Credit Losses (Topic 326):

The practical expedient allows entities to assume that current conditions remain unchanged over the remaining life of the receivables.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles —Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software costs.

The amendments in ASU 2025-06 remove all references to prescriptive and sequential software development stages throughout ASC 350-40.

The ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods.

Early adoption is permitted.

2 unchanged sentences

All of our revenues from contracts with customers are associated with the provision of testing services.

Our revenues are primarily attributable to our DecisionDx®-Melanoma test for cutaneous melanoma, our TissueCypher® test for patients diagnosed with Barrett’s esophagus, and our DecisionDx®-SCC test for cutaneous squamous cell carcinoma.

We also provide a test for patients with suspicious pigmented lesions, MyPath® Melanoma, a test for uveal melanoma, DecisionDx®-UM, and a pharmacogenomics testing service focused on mental health, IDgenetix®.

Our revenues are primarily attributable to our DecisionDx®-Melanoma test for cutaneous melanoma and our TissueCypher® test for patients diagnosed with Barrett’s esophagus.

We also provide our DecisionDx®-UM test for uveal melanoma, MyPath® Melanoma test for patients with melanocytic lesions and our DecisionDx®-SCC test for cutaneous squamous cell carcinoma.

IDgenetix®, a pharmacogenomics testing service focused on mental health, was previously offered and discontinued in May 2025.

Once we satisfy our performance obligations and bill for the service, the timing of the collection of payments may vary based on the payment practices of the third-party payor and the existence of contractually established reimbursement rates.

5 unchanged sentences

These situations may result in a delay in the collection of payments.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Medicare claims that are covered by Medicare are generally paid at a rate established on Medicare’s Clinical Laboratory Fee Schedule or by the respective Medicare contractor within 30 days from receipt.

1 unchanged sentence

A successful appeal at any of these levels may result in prompt payment.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In the absence of Medicare coverage, contractually established reimbursements rates or other coverage, we have concluded that our contracts include variable consideration because the amounts paid by Medicare or commercial health insurance carriers may be paid at less than our standard rates or not paid at all, with such differences considered implicit price concessions.

6 unchanged sentences

Variable consideration is evaluated each reporting period and adjustments are recorded as increases or decreases in revenues.

Included in revenues for the three months ended September 30, 2025 and 2024 were $ 2.5 million of net positive revenue adjustments and $ 0.6 million of net negative revenue adjustments, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods.

Included in revenues for the nine months ended September 30, 2025 and 2024 were $ 5.4 million and $ 1.3 million of net negative revenue adjustments, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods.

Included in revenues for the three months ended March 31, 2026 and 2025 were $ 0.6 million of net negative and $ 0.8 million of net positive revenue adjustments, respectively, associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods.

These amounts include (i) adjustments for actual collections versus estimated amounts and (ii) cash collections and the related recognition of revenue in current period for tests delivered in prior periods due to the release of the constraint on variable consideration.

1 unchanged sentence

Any incremental costs to obtain contracts are recorded as selling, general and administrative expenses as incurred due to the short duration of our contracts.

Contract balances consisted solely of accounts receivable (both current and noncurrent) as of September 30, 2025 and December 31, 2024.

Contract balances consisted solely of accounts receivable (both current and noncurrent) as of March 31, 2026 and December 31, 2025.

Disaggregation of Revenues

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Dermatologic (1)

3 unchanged sentences

Total net revenues $ 83,679 $ 87,988

(1) Consists of DecisionDx-Melanoma, DecisionDx-SCC and our Diagnostic Gene Expression Profile offering.

(1) Consists of DecisionDx-Melanoma, DecisionDx-SCC and MyPath Melanoma.

(2) Consists of TissueCypher, DecisionDx-UM and IDgenetix.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We have presented disaggregated net revenues included in our single reportable segment in the table above.

4 unchanged sentences

We rely upon reimbursements from third-party government payors (primarily Medicare) and private-payor insurance companies to collect accounts receivable related to sales of our tests.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Our significant third-party payors and their related revenues as a percentage of total revenues and accounts receivable balances were as follows:

Our significant third-party payors and their related revenues, each of which accounted for more than 10% of total revenues and accounts receivable balances were as follows:

Percentage of Revenues Percentage of

4 unchanged sentences

(noncurrent) as of

Nine Months Ended

September 30,

2025 2024 September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024

Three Months Ended

2026 2025 March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025

Medicare 40 % 47 % 19 % 18 % * *

2 unchanged sentences

* Less than 10%

There were no other third-party payors that individually accounted for more than 10% of our total revenue or accounts receivable for the periods shown in the table above.

(Loss) Earnings Per Share

Basic (loss) earnings per share is computed by dividing net (loss) income for the period by the weighted-average number of common shares outstanding during the period.

Diluted (loss) earnings per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, vesting of RSUs and PSUs or purchases under the ESPP.

Loss Per Share

Basic loss per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period.

Diluted loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, vesting of RSUs and PSUs or purchases under the ESPP.

The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents.

Contingently issuable PSU awards are included in the computation of diluted (loss) earnings per share when the applicable performance criteria would be met and the common shares would be issuable if the end of the reporting period were the end of the contingency period.

However, potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share when their effect is antidilutive.

The following table shows the computation of basic and diluted (loss) earnings per share (in thousands, except per share data):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net (loss) income $ ( 501 ) $ 2,269 $ ( 21,826 ) $ 8,655

Weighted-average common shares outstanding, basic 29,073 27,840 28,868 27,659

Assumed exercise of stock options — 457 — 447

Assumed vesting of RSUs — 1,041 — 663

Assumed vesting of PSUs — 42 — 55

Assumed issuance of shares under the ESPP — 21 — 14

Weighted-average common shares outstanding, diluted 29,073 29,401 28,868 28,838

Earnings (loss) per share:

Basic $ ( 0.02 ) $ 0.08 $ ( 0.76 ) $ 0.31

Diluted $ ( 0.02 ) $ 0.08 $ ( 0.76 ) $ 0.30

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Due to the Company reporting a net loss attributable to common stockholders for the three and nine months ended September 30, 2025, all potentially dilutive securities are antidilutive and are excluded from the computations of diluted loss per share.

The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in our calculation of diluted (loss) earnings per share for the three and nine months ended September 30, 2025 and 2024 because to do so would be antidilutive.

With regard to the PSUs, we assume that the associated performance targets will be met at the target level of performance for purposes of calculating diluted earnings per common share until such time that it is probable that actual performance will be above or below target (in thousands):

Contingently issuable PSU awards are included in the computation of diluted loss per share when the applicable performance criteria would be met and the common shares would be issuable if the end of the reporting period were the end of the contingency period.

However, potentially dilutive shares are excluded from the computation of diluted loss per share when their effect is antidilutive.

Because we reported a net loss for all periods presented, all potentially dilutive securities are antidilutive and are excluded from the computation of diluted loss per share for such periods.

The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in our calculation of diluted loss per share for the three months ended March 31, 2026 and 2025 because to do so would be antidilutive or, in the case of PSUs, the applicable performance conditions have not yet been met (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Stock options 2,769 2,983

RSUs and PSUs 3,946 3,739

ESPP 153 155 151 207

Total 6,971 6,898

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Marketable Investment Securities

Marketable investment securities consisted of the following (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current marketable investment securities:

3 unchanged sentences

Total current marketable investment securities $ 197,921 $ 182,776

(1) We held no debt securities - HTM as of December 31, 2024.

On January 26, 2026, in connection with SciBase’s rights offering, we completed an amendment to our previously disclosed subscription commitment.

We agreed to increase our commitment to subscribe for shares without subscription rights from 115.0 million shares to 125.0 million shares.

This amendment was intended to achieve an outcome substantially similar to full participation under our subscription rights.

In addition, we purchased subscription rights for another 30.5 million shares from a separate SciBase shareholder.

These purchased rights, together with our shares without subscription rights, aggregated to a total share purchase of 155.5 million shares for $ 3.6 million.

Equity Securities

We recognized unrealized gains of $ 3.6 million and $ 3.3 million in our equity securities for the three and nine months ended September 30, 2025, respectively.

No gains or losses were recognized for the three and nine months ended September 30, 2024, as we did not hold any equity securities during those periods.

The portion of unrealized gains and losses related to equity securities still held during the period is as follows (in thousands):

Three Months Ended

Net gains (losses) on equity securities $ 2,022 $ ( 1,425 )

Net loss recognized on equity securities sold ( 127 ) —

Net unrealized gains (losses) recognized on equity securities still held $ 2,149 $ ( 1,425 )

CASTLE BIOSCIENCES, INC.

2 unchanged sentences

The following tables present our debt securities (in thousands):

September 30, 2025

March 31, 2026

Amortized Cost Unrealized Estimated Fair Value

6 unchanged sentences

government securities - HTM

5,590 11 — 5,601

Total debt securities $ 176,954 $ 280 $ ( 2 ) $ 177,232

(1) We held no debt securities - HTM as of December 31, 2024.

government securities includes both AFS and HTM securities.

1 unchanged sentence

We classify all AFS investments as current assets, as these are readily available for use in current operations.

As of March 31, 2026 and December 31, 2025, all of our AFS securities had contractual maturities of one year or less.

We classify our HTM investments as current assets, as we have the positive intent and ability to hold these investments to maturity, and all such maturities are less than one year from the balance sheet date.

1 unchanged sentence

government securities under the AFS and HTM impairment model guidance, respectively, and determined our investment portfolio is comprised of low-risk, investment grade securities.

As of September 30, 2025, unrealized losses on our AFS and HTM U.S.

For the three months ended March 31, 2026 and 2025, unrealized losses on our AFS and HTM U.S.

government securities are not attributed to credit risk.

We believe that an allowance for credit losses is unnecessary because the unrealized losses on certain of our marketable investment securities are due to market factors.

The allowance for credit losses was zero as of September 30, 2025 and December 31, 2024.

There were no realized gains or losses on sales of debt securities for the three and nine months ended September 30, 2025 and 2024.

No credit-related or noncredit-related impairment losses were recorded for the three and nine months ended September 30, 2025 and 2024.

The allowance for credit losses was zero as of March 31, 2026 and December 31, 2025.

There were no realized gains or losses on sales of debt securities for the three months ended March 31, 2026 and 2025.

In addition, no credit-related or noncredit-related impairment losses were recorded for the three months ended March 31, 2026 and 2025.

Accrued interest receivable for our AFS and HTM U.S.

government securities is included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

As of September 30, 2025 and December 31, 2024, the accrued interest receivable related to AFS securities was $ 1.2 million and $ 0.6 million, respectively.

The balance related to HTM securities was immaterial as of September 30, 2025, and no amounts were accrued as of December 31, 2024, as no securities were classified as HTM at that time.

As of March 31, 2026 and December 31, 2025, the accrued interest receivable related to AFS securities was $ 1.3 million and $ 1.1 million, respectively.

As of March 31, 2026 and December 31, 2025, the accrued interest receivable related to HTM securities was immaterial.

Additional information relating to the fair value of marketable investment securities can be found in Note 11.

3 unchanged sentences

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Land $ 7,245 $ 7,245

7 unchanged sentences

Property and equipment, net $ 100,934 $ 97,443

In 2025, construction-in-progress related primarily to construction of our new headquarters in Friendswood, Texas, which was substantially completed in February 2026.

Upon completion, we commenced depreciation of the capitalized construction costs of the building over an estimated useful life of 39 years.

As of March 31, 2026, construction-in-progress related primarily to leasehold improvements for our office and laboratory facilities in Scottsdale, Arizona.

Depreciation expense was recorded in the condensed consolidated statements of operations as follows (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Cost of sales (exclusive of amortization of acquired intangible assets) $ 1,158 $ 903

3 unchanged sentences

Goodwill and Other Intangible Assets, Net

We had a single reporting unit where all goodwill was allocated for as of September 30, 2025 and December 31, 2024.

The balance of our goodwill was $ 10.7 million as of September 30, 2025 and December 31, 2024.

There were no accumulated impairments of goodwill as of September 30, 2025 or December 31, 2024.

We had a single reportable segment consisting of a single operating segment where the operating segment and the single reporting unit were the same as of September 30, 2025 and December 31, 2024.

We had a single reportable segment consisting of a single operating segment where the operating segment and the single reporting unit were the same as of March 31, 2026 and December 31, 2025, where all goodwill was allocated.

As of March 31, 2026 and December 31, 2025, our goodwill was $ 10.7 million.

There were no accumulated impairments of goodwill as of March 31, 2026 or December 31, 2025.

See Note 15 for additional information on our reportable segment.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Intangible Assets, Net

Our other intangible assets, net consisted of the following (in thousands):

September 30, 2025

March 31, 2026

Gross carrying value Accumulated amortization Net Weighted-Average Remaining Life (in years)

2 unchanged sentences

Total other intangible assets, net $ 154,063 $ ( 67,407 ) $ 86,656

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2025

6 unchanged sentences

This change resulted in an acceleration of amortization expense of approximately $ 20.1 million.

In May 2025, in connection with the acquisition of Capsulomics, and in accordance with ASC 805, we determined that substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset;

therefore, the transaction was accounted for as an asset acquisition.

The acquired intangible asset consists of developed technology and is valued at $ 28.2 million with an estimated useful life of 12 years and is being amortized on a straight-line basis.

Amortization expense of intangible assets was $ 2.3 million and $ 32.6 million for the three and nine months ended September 30, 2025, respectively, and $ 2.3 million and $ 6.8 million for the three and nine months ended September 30, 2024, respectively.

Amortization expense of intangible assets was $ 2.2 million and $ 28.3 million for the three months ended March 31, 2026 and 2025, respectively.

Other Accrued and Current Liabilities

Other accrued and current liabilities consisted of the following (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Accrued service fees $ 4,007 $ 3,213

Clinical studies 2,718 2,674

Accrued taxes 1,245 1,076

Self-insurance liability 2,333 —

ESPP contributions 296 924

1 unchanged sentence

Total $ 10,691 $ 8,937

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Long-Term Debt

Our long-term debt is presented in the table below (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Term debt $ 10,200 $ 10,200

3 unchanged sentences

Total long-term debt $ 8,399 $ 9,640

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Future maturities of principal amounts on long-term debt as of September 30, 2025 were as follows (in thousands):

Future maturities of principal amounts on long-term debt as of March 31, 2026 were as follows (in thousands):

Years Ending December 31,

2 unchanged sentences

On March 26, 2024 (the “Closing Date”), we entered into a Loan and Security Agreement, as amended in April 2025 (the “2024 LSA”), by and between us, our wholly owned subsidiary, Castle Narnia Real Estate Holding 1, LLC and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Lender”).

The 2024 LSA provides for (i) a term loan in the principal amount of $ 10.0 million, which was drawn on the Closing Date (the “2024 Term Loan”), and (ii) a $ 25.0 million line of credit that was available at our option from the Closing Date through September 30, 2025, with the same interest rate and maturity as the 2024 Term Loan (the “2024 Credit Line”).

The Consent and First Amendment executed on April 4, 2025, modified certain terms of the 2024 LSA, including the extension of the draw period for the 2024 Credit Line from March 31, 2025 to September 30, 2025.

The obligations under the 2024 LSA are secured by substantially all of our assets, excluding intellectual property, the real property held by the Company, and are subject to certain other exceptions and limitations.

We have the right to prepay the 2024 LSA in whole, subject to a prepayment fee of approximately 1.50 % if paid prior to March 26, 2026.

The 2024 LSA provides for (i) a term loan in the principal amount of $ 10.0 million, which was drawn on the Closing Date (the “2024 Term Loan”), and (ii) a $ 25.0 million line of credit which expired undrawn on September 30, 2025.

The obligations under the 2024 LSA are secured by substantially all of our assets, excluding intellectual property, the real property held by us, and are subject to certain other exceptions and limitations.

We have the right to prepay the 2024 LSA in whole.

Amounts repaid may not be reborrowed.

2 unchanged sentences

Should we seek to further amend the terms of the 2024 LSA, the consent of the Lender would be required.

As of September 30, 2025, we were in compliance with all of the covenants.

As of March 31, 2026, we were in compliance with all of the covenants.

The 2024 LSA bears interest at a floating rate equal to the greater of (a) the WSJ Prime Rate plus 0.25 % or (b) 6.00 % per annum.

The 2024 Term Loan is interest-only from the Closing Date through November 30, 2025, subject to extension under the Interest-Only Extension Milestone (as defined in the 2024 LSA) provision.

On August 26, 2025, we elected to extend the interest-only period to December 1, 2026.

The 2024 Term Loan was interest-only from the Closing Date through November 30, 2025, however, on August 26, 2025, we elected to exercise our option to extend the interest-only period to December 1, 2026.

Beginning in December 2026, the principal payments will be made in equal monthly installments through the maturity date of November 1, 2028.

4 unchanged sentences

A discount on debt equal to this obligation was recorded on the draw date and is being amortized as additional interest expense using the effective interest method over the term of the debt.

As of September 30, 2025, no payment on principal has been made and the weighted-average effective interest rate for all outstanding debt under the 2024 Term Loan was 7.99 %.

2024 Credit Line

We had a $ 25.0 million line of credit under the terms and provisions of the 2024 LSA, from the Closing Date through September 30, 2025.

As of September 30, 2025, no draws had been made on the 2024 Credit Line and the 2024 Credit Line expired on September 30, 2025.

As of March 31, 2026, no payment on principal has been made and the weighted-average effective interest rate for all outstanding debt under the 2024 Term Loan was 7.69 %.

CASTLE BIOSCIENCES, INC.

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Interest expense on long term debt $ 184 $ 202

1 unchanged sentence

Total $ 126 $ 8

Scottsdale Lease

On May 14, 2025, we entered into a lease agreement (the “Commencement Date”) with Perimeter Gateway Portfolio, LLC (the “Lessor”) for the lease of approximately 55,573 square feet of office and laboratory space in Scottsdale, Arizona (the “Scottsdale Lease”).

The Scottsdale Lease has a term of 143 months term that will expire in April 2037, and provides for right of refusal to lease any additional adjacent space that would/may become available in the future (the “ROFR Space”).

The Scottsdale Lease provides us two optional five-year term extensions, and a one -time option to terminate the lease on the last day of the 96 th month following the Commencement Date, subject to certain conditions, in exchange for payment of an early termination fee equal to the following:

the unamortized balance of the commissions paid to Lessor’s broker and our broker, plus the unamortized balance of the hard and soft costs incurred by the Lessor in connection with the tenant improvement allowance.

The Scottsdale Lease contains provisions for $ 7.2 million in lease incentives in form of Lessor paid improvements.

Rent for the first twelve months is abated, in the amount of $ 1.8 million, and any amount that is unamortized becomes payable if we default on the lease.

Unit 1 Pittsburgh Lease

On March 19, 2026, we entered into a lease agreement with Faros ACA RE, LLC for approximately 21,000 square feet of additional office and laboratory space in Pittsburgh, Pennsylvania within a building we already partially occupy (the “Unit 1 Pittsburgh Lease”).

The lease has an initial term of approximately 11 years and will commence upon completion of landlord-provided leasehold improvements.

The lease includes tenant improvement allowances and provides for an extension option and a one -time early termination option, each subject to certain conditions.

As of March 31, 2026, the Unit 1 Pittsburgh Lease has not commenced, and accordingly, we have not recognized a right-of-use asset or lease liability in our condensed consolidated balance sheet.

Fair Value Measurements

13 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The tables below provide information, by level within the fair value hierarchy, of our financial assets and liabilities that are accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 (in thousands):

As of September 30, 2025

The tables below provide information, by level within the fair value hierarchy, of our financial assets and liabilities that are accounted for at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 (in thousands):

As of March 31, 2026

Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs

28 unchanged sentences

For additional information on the carrying amount and fair value of our HTM investments, see Note 5.

The Convertible Loan Receivable with SciBase is carried at amortized cost which approximates fair value due to the variable interest rate and market-based terms of the instrument.

Fair value is estimated using a discounted cash flow model.

The inputs used to fair value the Convertible Loan Receivable are classified as Level 2 in the fair value hierarchy and include a three-month STIBOR and a market credit spread.

For additional information on the carrying amount and estimated fair value of our Convertible Loan Receivable, see Note 2.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Commitments and Contingencies

From time to time, we may be involved in legal proceedings arising in the ordinary course of business.

We believe there is no threatened litigation or litigation pending that could have, individually or in the aggregate, a material adverse effect on our financial position, results of operations or cash flows.

On February 1, 2024, we received a subpoena from the Department of Health and Human Services, Office of Inspector General, seeking documents and information concerning claims submitted for payment under federal healthcare programs.

The subpoena requested that we produce documents relating primarily to interactions with medical providers and billing to government-funded healthcare programs for our tests.

The time period covered by the subpoena is January 1, 2015 through February 1, 2024.

The time period covered by the subpoena is January 1, 2015 through the date of issuance of the subpoena.

We are continuing to cooperate with the government’s request and are in the process of responding to the subpoena.

4 unchanged sentences

We are unable to predict the outcome and are unable to make a meaningful estimate of the amount or range of loss, if any, that could result from any unfavorable outcome.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Incentive Plans and Stock-Based Compensation

3 unchanged sentences

Under this provision, effective January 1, 2026, an additional 1,484,315 shares became available under the 2019 Plan.

As of September 30, 2025, 1,082,161 shares remained available for grant under the 2019 Plan.

As of March 31, 2026, 1,590,533 shares remained available for grant under the 2019 Plan.

Inducement Plan

On December 22, 2022, our board of directors approved the 2022 Inducement Plan (the “Inducement Plan”).

On August 5, 2025, our compensation committee amended the Inducement Plan to increase the number of shares issuable under the Inducement Plan by 700,000 shares.

The Inducement Plan provides for the granting of awards as inducement material to the grantee’s entering into employment with us to the extent such grantee was not previously an employee of ours or is entering into employment following a bona fide period of non-employment with us.

As of September 30, 2025, there were 828,770 shares available for grant under the amended Inducement Plan.

As of March 31, 2026, there were 746,182 shares available for grant under the amended Inducement Plan.

Stock Options

Stock option activity under our stock plans for the nine months ended September 30, 2025 is set forth below:

Stock option activity under our stock plans for the three months ended March 31, 2026 is set forth below:

Weighted-Average

8 unchanged sentences

Forfeited/Cancelled ( 12,590 ) $ 53.51

Balance as of September 30, 2025 2,880,269 $ 36.19 4.8 $ 8,933

Exercisable as of September 30, 2025

Balance as of March 31, 2026 2,743,348 $ 36.71 4.3 $ 9,262

Exercisable as of March 31, 2026

2,740,690 $ 36.72 4.3 $ 9,262

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted Stock Units

The following table summarizes our RSU activity for the nine months ended September 30, 2025:

The following table summarizes our RSU activity for the three months ended March 31, 2026:

Restricted Stock Units Outstanding Weighted-Average Grant Date Fair Value

4 unchanged sentences

Forfeited/Cancelled ( 52,647 ) $ 24.21

Balance as of September 30, 2025

Balance as of March 31, 2026

3,983,319 $ 24.08

(1) The aggregate number of shares withheld upon vesting for employee tax obligations was 167,751 for the nine months ended September 30, 2025.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(1) The aggregate number of shares withheld upon vesting for employee tax obligations was 201,867 for the three months ended March 31, 2026.

Performance-Based Restricted Stock Units

The following table summarizes our PSU activity for the nine months ended September 30, 2025:

The following table summarizes our PSU activity for the three months ended March 31, 2026:

Performance-Based Restricted Stock Units Outstanding Weighted-Average Grant Date Fair Value

2 unchanged sentences

Granted 172,397 $ 27.57

Vested ( 98,015 ) $ 23.23

( 88,757 ) $ 21.23

Forfeited/Cancelled — $ —

Balance as of September 30, 2025

Balance as of March 31, 2026

433,784 $ 24.15

(1) The aggregate number of shares withheld upon vesting for employee tax obligations was 35,426 for the nine months ended September 30, 2025.

(1) The aggregate number of shares withheld upon vesting for employee tax obligations was 28,797 for the three months ended March 31, 2026.

Employee Stock Purchase Plan

The ESPP provides for certain automatic increases in the number of shares of common stock reserved for issuance, which resulted in an additional 296,863 shares becoming available under the ESPP effective January 1, 2026.

During the nine months ended September 30, 2025, we issued 160,898 shares of common stock pursuant to scheduled purchases under the ESPP.

As of September 30, 2025, 1,170,613 shares remained available for issuance under the ESPP.

During the three months ended March 31, 2026, we issued 94,420 shares of common stock pursuant to scheduled purchases under the ESPP.

As of March 31, 2026, 1,373,056 shares remained available for issuance under the ESPP.

Determining Fair Value - Summary of Assumptions

We use the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date.

The following table sets forth the assumptions used to determine the fair value of stock options:

Nine Months Ended

September 30,

Average expected term (years) N/A 5.0

Expected stock price volatility N/A 80.20 % - 80.20 %

Risk-free interest rate N/A 4.39 % - 4.39 %

Dividend yield N/A — %

The following table sets forth assumptions used to determine the fair value of the purchase rights issued under the ESPP:

Nine Months Ended

September 30,

Three Months Ended

Average expected term (years) 1.2 1.2

6 unchanged sentences

We use the closing price of our common stock on the date of grant to determine the fair value of RSUs and PSUs.

There were no stock options granted for the nine months ended September 30, 2025.

For the nine months ended September 30, 2024, the weighted-average grant date fair value of the stock options was $ 9.23 per share.

For the nine months ended September 30, 2025 and 2024, the weighted-average grant date fair value of the purchase rights granted under the ESPP was $ 9.71 and $ 12.28 per share, respectively.

CASTLE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There were no stock options granted for the three months ended March 31, 2026 and 2025.

For the three months ended March 31, 2026 and 2025, the weighted-average grant date fair value of the purchase rights granted under the ESPP was $ 11.27 and $ 9.43 per share, respectively.

Stock-Based Compensation Expense

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Cost of sales (exclusive of amortization of acquired intangible assets) $ 1,257 $ 1,456

2 unchanged sentences

Total stock-based compensation expense $ 9,776 $ 11,179

Retirement Policy

In January 2023, our board of directors approved a retirement policy (the “Retirement Policy”) that provides for acceleration of a portion of unvested awards granted to and held by certain eligible employees upon meeting age, service and notice requirements.

Pursuant to the Retirement Policy, we accelerated the recognition of compensation expense of $ 0.2 million and $ 0.4 million during the three months ended September 30, 2025, and 2024, respectively, and accelerated the recognition of compensation expense of $ 0.6 million and $ 0.8 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the total unrecognized stock-based compensation cost related to outstanding awards was $ 69.6 million, which is expected to be recognized over a weighted-average period of 2.3 years.

Included in total stock-based compensation expense is $ 0.2 million and $ 0.3 million for the three months ended March 31, 2026 and 2025, respectively, from the accelerated recognition of expense for modifications of awards falling in scope of the Retirement Policy.

As of March 31, 2026, the total unrecognized stock-based compensation cost related to outstanding awards was $ 94.5 million, which is expected to be recognized over a weighted-average period of 2.8 years.

The total unrecognized compensation cost will be adjusted for forfeitures in future periods as they occur.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

The legislation includes a number of significant changes to U.S.

federal tax law that affect both current and deferred income taxes.

Key provisions of the OBBBA include, among other items, changes to certain business deductions, modifications to bonus depreciation rules, and revisions to the treatment of R&D expenditures.

As a result of enactment, changes in current taxes are reflected through the revised average effective tax rate, and deferred taxes, including valuation allowance effects, have been recorded as a discrete item in the period.

The OBBBA did not have a material impact on our condensed consolidated statement of operations for the three and nine months ended September 30, 2025.

Our effective income tax rate was ( 29.8 )% and 18.6 % for the three and nine months ended September 30, 2025, respectively.

The effective rate for the three and nine months ended September 30, 2025 differed from our federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity including the acquisition of Capsulomics, state income taxes and the non-deductibility of other permanent items.

Our effective income tax rate was 72.6 % and 36.7 % for the three and nine months ended September 30, 2024, respectively.

For the three months ended September 30, 2024, differences in our effective rate and the federal statutory rate of 21% was due to revisions in estimated pre-tax income, reflecting uncertainty in continued Medicare coverage for our DecisionDx-SCC test and updated information, as well as stock-based compensation, permanent differences, changes in valuation allowance, R&D tax credit and state income taxes.

For the nine months ended September 30, 2024, differences in our effective rate and the federal statutory rate of 21% was due to stock-based compensation, permanent differences, changes in valuation allowance, R&D tax credit and state income taxes.

Our effective tax rate was immaterial for the three months ended March 31, 2026 and 2025.

The effective rate for the three months ended March 31, 2026 and 2025 differed from our federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.

Segment and Related Information

The Company derives revenues through the delivery of test reports for our molecular diagnostic tests.

All of our operations are located within the United States and our business is focused on the U.S.

We derive revenues through the delivery of test reports for our molecular diagnostic tests.

All of our operations are located within the U.S.

and our business is focused on the U.S.

We have a single reportable segment consisting of a single operating segment.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The measures of segment (loss) income for of our single reportable segment were as follows (in thousands):

The measures of segment profit or loss for our single reportable segment were as follows (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net revenues from external customers (1)

7 unchanged sentences

Other segment items 12,254 37,015

Segment (loss) income $ ( 501 ) $ 2,269 $ ( 21,826 ) $ 8,655

Segment loss $ ( 14,522 ) $ ( 25,848 )

(1) For information on disaggregation of segment revenue by type and information about payor concentration, see Note 3.

Other Segment Items

Other segment items include all other operating expenses types to included IT service and software licensing costs, fixed and variable expenses incurred for leasing of facilities and equipment, depreciation and amortization, gain or losses on disposal of fixed assets in the routine course of business, fair value adjustment for equity securities, realized gains or losses on investment securities, administrative costs, expense for use of prepaids to include insurance premiums and warranties for lab equipment, public company costs (less audit fees), interest and other non-operating income, and income tax expense or benefits.

Other segment items include all other operating expenses types, including IT service and software licensing costs, fixed and variable expenses incurred for leasing of facilities and equipment, depreciation and amortization, gain or losses on disposal of fixed assets in the routine course of business, fair value adjustment for equity securities, realized gains or losses on investment securities, administrative costs, expense for use of prepaids, including insurance premiums and warranties for lab equipment, public company costs (less audit fees), interest and other non-operating loss or income, and income tax expense or benefits.

Our CODM does not individually review budgets or results for these activities.

Other amounts included in the measure of segment (loss) income were as follows (in thousands):

Other amounts included in the measure of segment profit or loss were as follows (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Interest income $ 2,545 $ 3,099

3 unchanged sentences

Stock-based compensation expense 9,776 11,179

Changes in fair value of equity securities 3,561 — 3,321 —

Total assets for our reportable segment were located in the United States and were $ 562.8 million and $ 531.2 million as of September 30, 2025 and December 31, 2024, respectively.

Expenditures for additions to long-lived assets were $ 12.5 million and $ 5.8 million for the three months ended September 30, 2025 and 2024, respectively, $ 31.1 million and $ 21.1 million for the nine months ended September 30, 2025, and 2024, respectively.

Net gains (losses) on equity securities 2,022 ( 1,425 )

Total assets for our reportable segment were located in the U.S.

and were $ 547.8 million and $ 578.6 million as of March 31, 2026 and December 31, 2025, respectively.

Expenditures for additions to long-lived assets were $ 5.2 million and $ 5.7 million for the three months ended March 31, 2026, and 2025, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements