Heartflow, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Heartflow, Inc. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2025, 2024 and 2023 Audited Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 92 Financial Statements Consolidated Balance Sheets 93 Consolidated Statements of Operations and Comprehensive Loss 94 Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit ) 95 Consolidated Statements of Cash Flows 96 Notes to Consolidated Financial Statements 97 ‎ 91 Table of Contents R eport of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Heartflow, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Heartflow, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, of redeemable convertible preferred stock and stockholders' equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP San Jose, California March 18, 2026 We have served as the Company’s auditor since 2009. ‎ 92 Table of Contents Heartflow, Inc. Consolidated B alance Sheets (in thousands, except share and per share amounts) December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 44,776 $ 51,367 Short-term investments 132,010 — Accounts receivable, net of allowance for credit losses of $ 626 and $ 814 at December 31, 2025 and 2024, respectively 29,343 24,639 Restricted cash, current — 150 Prepaid expenses and other current assets 14,075 6,132 Total current assets 220,204 82,288 Long-term investments 103,365 — Property and equipment, net 8,587 8,920 Operating lease right-of-use assets 17,488 18,805 Restricted cash, non-current 4,709 4,325 Other non-current assets 5,099 4,366 Total assets $ 359,452 $ 118,704 Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) Current liabilities Accounts payable $ 3,169 $ 2,870 Accrued expenses and other current liabilities 33,279 25,319 Operating lease liabilities, current 5,922 5,416 Total current liabilities 42,370 33,605 Term loan — 136,431 Common stock warrant liability — 20,835 Operating lease liabilities, non-current 16,132 18,537 Other non-current liabilities 303 214 Total liabilities 58,805 209,622 Commitments and contingencies (Note 7) Redeemable convertible preferred stock issuable in series, $ 0.001 par value; none and 122,231,454 shares authorized, issued and outstanding as of December 31, 2025 and 2024, respectively; aggregate liquidation value of none and $ 951,917 as of December 31, 2025 and 2024, respectively — 768,566 Stockholders’ equity (deficit) Preferred stock, $ 0.001 par value; 50,000,000 and no shares authorized as of December 31, 2025 and 2024, respectively; no shares issued and outstanding as of December 31, 2025 and 2024 — — Common stock, $ 0.001 par value; 250,000,000 and 210,300,000 shares authorized as of December 31, 2025 and 2024, respectively; 85,280,597 and 6,122,048 shares issued and outstanding as of December 31, 2025 and 2024, respectively 85 6 Additional paid-in capital 1,388,737 112,241 Accumulated other comprehensive loss ( 425 ) ( 772 ) Accumulated deficit ( 1,087,750 ) ( 970,959 ) Total stockholders’ equity (deficit) 300,647 ( 859,484 ) Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) $ 359,452 $ 118,704 The accompanying notes are an integral part of these consolidated financial statements. 93 Table of Contents Heartflow, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share amounts) Year Ended December 31, 2025 2024 2023 Revenue $ 176,034 $ 125,808 $ 87,174 Cost of revenue 40,837 31,359 29,123 Gross profit 135,197 94,449 58,051 Operating expenses: Research and development 64,918 43,517 35,854 Selling, general and administrative 134,345 112,154 95,111 Total operating expenses 199,263 155,671 130,965 Loss from operations ( 64,066 ) ( 61,222 ) ( 72,914 ) Interest income 5,538 4,066 5,457 Interest expense ( 15,173 ) ( 22,768 ) ( 24,694 ) Change in fair value of common stock warrant liability ( 43,894 ) ( 16,395 ) ( 2,320 ) Change in fair value of derivative liability 7,311 ( 222 ) 4,158 Change in fair value of convertible note — — ( 5,120 ) Loss on extinguishment of debt ( 6,360 ) — — Other income (expense), net ( 223 ) 168 325 Loss before provision for income taxes ( 116,867 ) ( 96,373 ) ( 95,108 ) (Provision for) benefit from income taxes 76 ( 53 ) ( 547 ) Net loss $ ( 116,791 ) $ ( 96,426 ) $ ( 95,655 ) Cumulative dividends on Series C redeemable convertible preferred stock — — ( 1,239 ) Deemed dividend upon down round of redeemable convertible preferred stock — — ( 26,794 ) Net loss attributable to common stockholders $ ( 116,791 ) $ ( 96,426 ) $ ( 123,688 ) Comprehensive loss: Net loss $ ( 116,791 ) $ ( 96,426 ) $ ( 95,655 ) Other comprehensive income (loss): Foreign currency translation gain (loss) 191 ( 271 ) ( 504 ) Unrealized gain on investments, net 156 — — Total other comprehensive income (loss) 347 ( 271 ) ( 504 ) Total comprehensive loss $ ( 116,444 ) $ ( 96,697 ) $ ( 96,159 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 3.17 ) $ ( 17.98 ) $ ( 25.32 ) Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted 36,853,867 5,363,435 4,885,231 The accompanying notes are an integral part of these consolidated financial statements. 94 Table of Contents Heartflow, Inc. Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (in thousands, except share and per share amounts) * Redeemable Convertible ‎ Preferred Stock Common Stock Additional ‎ Paid-in Accumulated Other Comprehensive Accumulated Total Shareholders’ Shares Amount Shares Amount Capital Loss Deficit Equity (Deficit) Balances as of January 1, 2023 39,422,361 $ 538,423 4,943,764 $ 5 $ 58,436 $ 3 $ ( 752,084 ) $ ( 693,640 ) Issuance of common stock upon exercise of stock options — — 99,900 — 589 — — 589 Issuance of Series F redeemable convertible preferred stock at $ 2.8505 per share, net of issuance costs of $ 5,904 61,344,029 168,957 — — — — — — Issuance of Series F-1 redeemable convertible preferred stock at $ 1.9098 per share upon conversion of convertible notes and accrued interest 21,465,064 61,186 — — — — — — Deemed dividend upon down round of redeemable convertible preferred stock — — — — 26,794 — ( 26,794 ) — Repurchase of common stock — — ( 102,739 ) — ( 228 ) — — ( 228 ) Stock-based compensation expense — — — — 11,874 — — 11,874 Foreign currency translation loss — — — — — ( 504 ) — ( 504 ) Net loss — — — — — — ( 95,655 ) ( 95,655 ) Balances as of December 31, 2023 122,231,454 768,566 4,940,925 5 97,465 ( 501 ) ( 874,533 ) ( 777,564 ) Issuance of common stock upon exercise of stock options — — 1,181,123 1 4,563 — — 4,564 Stock-based compensation expense — — — — 10,213 — — 10,213 Foreign currency translation loss — — — — — ( 271 ) — ( 271 ) Net loss — — — — — — ( 96,426 ) ( 96,426 ) Balances as of December 31, 2024 122,231,454 768,566 6,122,048 6 112,241 ( 772 ) ( 970,959 ) ( 859,484 ) Conversion of redeemable convertible preferred stock to common stock upon IPO ( 122,231,454 ) ( 768,566 ) 51,226,348 51 768,515 — — 768,566 Issuance of common stock upon IPO, net of underwriting discounts, commissions and offering costs — — 19,166,667 19 332,368 — — 332,387 Conversion of convertible notes to common stock upon IPO, net — — 6,470,743 6 94,133 — — 94,139 Net exercise of common stock warrants — — 1,646,317 2 64,728 — — 64,730 Issuance of common stock upon exercise of stock options — — 617,134 1 3,297 — — 3,298 Issuance of common stock upon vesting of restricted stock units, net of shares withheld for taxes — — 31,340 — ( 510 ) — — ( 510 ) Stock-based compensation expense — — — — 13,965 — — 13,965 Unrealized gain on investments, net — — — — — 156 — 156 Foreign currency translation gain — — — — — 191 — 191 Net loss — — — — — — ( 116,791 ) ( 116,791 ) Balances as of December 31, 2025 — $ — 85,280,597 $ 85 $ 1,388,737 $ ( 425 ) $ ( 1,087,750 ) $ 300,647 The accompanying notes are an integral part of these consolidated financial statements. 95 Table of Contents Heartflow, Inc. Conso lidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 116,791 ) $ ( 96,426 ) $ ( 95,655 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,440 5,358 4,744 Stock-based compensation expense 13,965 10,213 11,874 Amortization of debt discount and debt issuance costs 5,367 1,609 2,777 Amortization of right-of-use asset 3,133 2,735 2,889 Accretion of discounts on investments, net ( 1,676 ) — — Change in fair value of common stock warrant liability 43,894 16,395 2,320 Change in fair value of derivative liability ( 7,311 ) 222 ( 4,158 ) Change in fair value of convertible note — — 5,120 Loss on extinguishment of debt 6,360 — — Paid-in-kind interest — — 144 Non-cash interest charges 1,071 2,016 865 Change in allowance for credit losses 188 ( 244 ) 1,190 Changes in assets and liabilities: Accounts receivable, net ( 4,892 ) ( 3,849 ) ( 9,350 ) Prepaid expenses and other current assets ( 7,943 ) ( 998 ) ( 357 ) Other non-current assets ( 733 ) ( 2,698 ) ( 402 ) Accounts payable 218 ( 327 ) ( 623 ) Accrued expenses and other current liabilities 9,313 426 3,759 Operating lease liabilities ( 3,715 ) ( 3,218 ) ( 1,761 ) Other non-current liabilities 89 ( 215 ) 190 Net cash used in operating activities ( 54,023 ) ( 69,001 ) ( 76,434 ) Cash flows from investing activities: Purchase of property and equipment ( 5,025 ) ( 4,357 ) ( 6,105 ) Purchases of investments ( 233,543 ) — — Net cash used in investing activities ( 238,568 ) ( 4,357 ) ( 6,105 ) Cash flows from financing activities: Proceeds from issuance of Series F redeemable convertible preferred shares, net of issuance costs — — 168,957 Proceeds from initial public offering, net of issuance costs 332,387 — — Proceeds from convertible notes offering, net of issuance costs 72,769 — — Proceeds from exercise of stock options 3,298 4,564 589 Repayment of term loan ( 115,137 ) — — Payments of exit, prepayment penalty and lender fees ( 6,764 ) ( 2,327 ) — Payment of taxes related to vested restricted stock units ( 510 ) — — Repurchase of common stock — — ( 228 ) Net cash provided by financing activities 286,043 2,237 169,318 Effect of foreign exchange rates 191 ( 271 ) ( 504 ) Net increase (decrease) in cash and cash equivalents ( 6,357 ) ( 71,392 ) 86,275 Balance, beginning of period 55,842 127,234 40,959 Balance, end of period $ 49,485 $ 55,842 $ 127,234 Supplemental disclosure of cash flow information: Cash paid for interest $ 8,573 $ 19,163 $ 20,800 Supplemental disclosure of non-cash investing and financing activities: Purchases of property and equipment included in accounts payable $ 81 $ — $ 808 Right-of-use asset obtained in exchange for lease obligation $ 1,816 $ 579 $ — Conversion of redeemable convertible preferred stock to common stock upon IPO $ 768,566 $ — $ — Conversion of convertible notes to common stock upon IPO $ 94,139 $ — $ — Conversion of term loan principal to convertible notes $ 23,000 $ — $ — Reclassification of warrant liability to common stock upon net exercise $ 64,729 $ — $ — Issuance of convertible notes to certain employees in lieu of cash compensation $ 1,353 $ — $ — Reclassification of term loan debt discount to convertible notes debt discount $ 239 $ — $ — Derecognition of derivative liability in connection with debt refinancing $ — $ 1,125 $ — Unpaid deferred offering costs included in accounts payable and accrued expenses and other current liabilities $ — $ 413 $ — Reduction in right-of-use asset and lease obligation due to amendment in lease terms $ — $ — $ 1,776 Deemed dividend upon down round of redeemable convertible preferred stock $ — $ — $ 26,794 Conversion of convertible note into Series F-1 redeemable convertible preferred stock $ — $ — $ 61,186 The accompanying notes are an integral part of these consolidated financial statements. 96 Table of Contents 1. Business Overview Description of Business HeartFlow Holding, Inc. was incorporated in the state of Delaware in July 2007 as Cardiovascular Simulation, Inc. and changed its name to HeartFlow, Inc. in May 2009. On March 1, 2021, HeartFlow, Inc. completed an internal reorganization in which a newly formed parent holding company, HeartFlow Holding, Inc., was established. On July 17, 2025, HeartFlow Holding, Inc.’s stockholders and Board of Directors approved the consolidation of HeartFlow Holding, Inc. with and into HeartFlow, Inc., with HeartFlow, Inc. continuing as the surviving company. The previous holders of HeartFlow Holding, Inc.’s common stock and preferred securities became holders of HeartFlow, Inc.’s common stock and preferred securities based on a 1 -to-1 conversion ratio, and the equity incentive plan, outstanding equity awards, outstanding warrants and certain other equity-related agreements of HeartFlow Holding, Inc. were assumed by HeartFlow, Inc. In connection with this consolidation, HeartFlow, Inc. changed its name to Heartflow, Inc. (the “Company”). The Company is a commercial-stage medical technology company that provides software and artificial intelligence (“AI”) designed to deliver a non-invasive solution for diagnosing and managing coronary artery disease (“CAD”). The Company’s novel Heartflow Platform uses AI and advanced computational fluid dynamics to create a personalized 3D model of a patient’s heart based off a single coronary computed tomography angiography (“CCTA”). This results in actionable data on blood flow, stenosis, plaque volume and plaque composition. The Company’s Heartflow FFR CT Analysis and Plaque Analysis software assists physicians in diagnosing, managing and delivering precision care to patients with CAD. The Company was awarded Conformité Européene Mark for its Heartflow FFR CT Analysis in July 2011. The Company received clearance from the U.S. Food and Drug Administration (“FDA”) in November 2014 for its Heartflow FFR CT Analysis and in October 2022 for its Plaque Analysis. The Company’s headquarters is located in Mountain View, California, and the Company also has offices in Santa Rosa, San Francisco, and Rohnert Park, California, Austin, Texas, and Tokyo, Japan. The Company had the following wholly-owned subsidiaries as of December 31, 2025: Entity Name Country of Incorporation HeartFlow Japan G.K. Japan HeartFlow U.K. Ltd United Kingdom Effective November 2025, HeartFlow Technology U.K. Limited, a wholly-owned subsidiary in the United Kingdom, was dissolved. Effective July 2024, HeartFlow International Sarl, a wholly-owned subsidiary in Switzerland, was dissolved. Reverse Stock Split On July 31, 2025, the Company’s Board of Directors approved an amendment to the Company ’ s amended and restated certificate of incorporation to immediately effect a reverse stock split of the shares of the Company’s outstanding common stock at a ratio of 1.0-for-2.92 (the “Reverse Stock Split”). The number of authorized shares and par value per share were not adjusted as a result of the Reverse Stock Split. All references to shares, options to purchase common stock, share amounts, per share amount, and related information contained in the consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. In addition, the conversion ratios for each series of the Company’s redeemable convertible preferred stock, which automatically convert into shares of common stock upon the closing of the Company’s initial public offering (the “IPO”) of common stock, were proportionally adjusted. 97 Table of Contents Initial Public Offering On August 11, 2025, the Company completed its IPO of 19,166,667 shares of its common stock, which included an additional 2,500,000 shares of common stock purchased by the underwriters pursuant to their option to purchase additional shares, at a price to the public of $ 19.00 per share. The gross proceeds to the Company from the IPO were approximately $ 364.2 million, before deducting underwriting discounts and commissions and offering expenses payable by the Company of $ 31.8 million. Immediately prior to the closing of the Company’s IPO, all of the outstanding shares of the Company’s redeemable convertible preferred stock converted into shares of the Company’s common stock. Additionally, upon the closing of the Company’s IPO, the aggregate outstanding principal balance under the 2025 Convertible Notes (as defined in Note 2) automatically converted into shares of the Company’s common stock. Liquidity The Company has incurred operating losses and negative cash flows from operations since its inception and has an accumulated deficit of $ 1.1 billion as of December 31, 2025. The Company expects to incur losses for the foreseeable future. Historically, the Company’s activities have been financed through sales of shares of redeemable convertible preferred stock, common stock and convertible promissory notes, borrowings under term loans and revenue received from customers. As of December 31, 2025, the Company had $ 280.2 million in cash and cash equivalents and investments in available-for-sale securities. Based on the Company’s current operating plan, the Company believes that the expected cash generated from revenue transactions with customers and its existing cash and cash equivalents and available-for-sale securities will be sufficient to fund the Company’s planned operating expenses and capital expenditure requirements for at least the next 12 months from the date these consolidated financial statements were available to be issued. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company as well as its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management uses significant judgment when making estimates in the determination of stock-based compensation, deferred income tax valuation allowance, capitalized internal-use software, depreciation of property and equipment, allowance for credit losses, revenue recognition, valuation of operating lease right-of-use (“ROU”) assets and operating lease liabilities, common stock warrant liability and for periods prior to the Company’s IPO, the fair value of convertible debt, the valuation of common stock and derivative liability. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions as facts and circumstances dictate. Actual results could materially differ from those estimates. Segment Information The Company operates and manages its business as one reportable and operating segment, which is the business of non-invasive CAD detection solutions. The Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), reviews financial information, including revenue and net loss, presented on a 98 Table of Contents consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. The Company ’ s measure of segment profit or loss is consolidated net loss, which is used by the CODM to measure actual results versus expectations, set performance metrics, and develop the annual budget to achieve the Company’s long-term objectives. Significant segment expenses within consolidated net loss includes cost of revenue, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s consolidated statements of operations and comprehensive loss. Other expense items that are presented on the consolidated statements of operations include interest income, interest expense, changes in fair value of warrant liability, change in fair value of derivative liability, loss on extinguishment of debt, other income, net, and provision for income taxes. The following table is representative of the significant expense categories regularly provided to the CODM when managing the Company’s single reporting segment and includes a reconciliation to the consolidated net loss shown in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Revenue $ 176,034 $ 125,808 $ 87,174 Less (1) : Cost of revenue 40,837 31,359 29,123 Research and development expenses Research and development 38,673 25,983 22,330 Regulatory and clinical 26,245 17,534 13,524 Selling, general and administrative expenses Sales 75,709 66,895 53,374 Marketing 19,146 14,470 9,949 General and administrative 39,490 30,789 31,788 Loss from operations ( 64,066 ) ( 61,222 ) ( 72,914 ) Other income (expense), net (2) ( 52,801 ) ( 35,151 ) ( 22,194 ) (Provision for) benefit from income taxes 76 ( 53 ) ( 547 ) Segment net loss $ ( 116,791 ) $ ( 96,426 ) $ ( 95,655 ) (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Other income (expense), net represents the consolidated amounts for interest income, interest expense, change in fair value of convertible note, change in fair value of common stock warrant liability, change in fair value of derivative liability, loss on extinguishment of debt and other income (expense), net as shown on the consolidated statements of operations and comprehensive loss. The Company derives revenue and has long-lived assets primarily in the United States of America. Revenue by geography is further described in Note 3. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments that are readily convertible to known amounts of cash and purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts. The following table provides a reconciliation of cash, cash equivalents and restricted cash to the total shown in the consolidated statements of cash flows (in thousands): December 31, 2025 2024 2023 Cash and cash equivalents $ 44,776 $ 51,367 $ 122,767 Restricted cash 4,709 4,475 4,467 Total cash, cash equivalents and restricted cash $ 49,485 $ 55,842 $ 127,234 : As of December 31, 2025 and 2024, restricted cash primarily represents deposits held as security in connection with the Company’s facility lease agreements. 99 Table of Contents Investments Short-term and long-term investments consist of debt securities classified as available-for-sale. Short-term investments have original maturities greater than 90 days, but less than one year as of the balance sheet date. Long-term investments have maturities greater than one year as of the balance sheet date. All investments are recorded at fair value based on the fair value hierarchy. Unrealized gains and losses, deemed temporary in nature, are reported as a separate component of accumulated other comprehensive income (loss). Realized gains and losses are included in earnings and are derived based on the specific-identification method for determining the costs of investments sold. Amortization of premiums and accretion of discounts are reported as a component of interest income. A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to earnings and the corresponding establishment of a new cost basis for the investment. The Company evaluates the securities in an unrealized loss position for expected credit losses by considering factors such as historical experience, market data, issuer-specific factors, current economic conditions and credit ratings. The Company did no t recognize any credit losses on its available-for-sale securities during the year ended December 31, 2025 and there were no impairment charges for unrealized losses during the period. The Company had no investments during the year ended December 31, 2024. Fair Value of Financial Instruments The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The accounting guidance establishes three levels of the fair value hierarchy as follows: Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities; Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability. As of December 31, 2025 and 2024, the carrying amounts of the Company’s financial instruments carried at amortized cost, including cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities and market interest rates, if applicable. Management believed that the Company’s Term Loan (as defined in Note 8) and 2025 Convertible Notes (as defined below in this Note 2) then outstanding bore interest at the prevailing market rates for instruments with similar characteristics; accordingly, the carrying value of these instruments approximated their fair value as of December 31, 2024. Fair value accounting is applied to investments, common stock warrant liability and derivative liability. No common stock warrant liability or derivative liability were outstanding as of December 31, 2025. 100 Table of Contents Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents, investments, restricted cash and accounts receivable. The Company maintains bank deposits in federally insured financial institutions and these deposits may at times exceed federally insured limits. To date, the Company has not experienced any losses on its cash deposits. The Company currently has full control of its cash and cash equivalents balance. Cash equivalents are invested in highly rated money market funds. The Company invests in a variety of financial instruments, such as, but not limited to, commercial paper, corporate bonds/notes, U.S. government securities, U.S. treasury bills, agency bonds/notes, and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. To date, the Company has not experienced any losses on its deposits of cash and cash equivalents or investments. No single customer represented more than 10% of the Company’s revenue during the years ended December 31, 2025, 2024 and 2023. No single customer represented more than 10% of the Company’s accounts receivable as of December 31, 2025 and 2024. Accounts Receivable The Company performs ongoing credit evaluations of its customers’ financial conditions and generally extends credit to customers without requiring collateral. Accounts receivable are recorded at the amounts billed less estimated allowances for credit losses for any potential uncollectible amounts. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from a customer’s inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. Property and Equipment Property and equipment are stated at cost less accumulated depreciation or amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of assets, which generally ranges from two to five years . Leasehold improvements are amortized over the lesser of their useful life or the remaining life of the lease. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in results from operations in the period realized. Maintenance and repairs are expensed as incurred. Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property and equipment, for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted future cash flows over the remaining useful life of the long-lived assets in measuring whether they are recoverable. If the carrying value of the asset exceeds the estimated undiscounted future cash flows, a loss is recorded as the excess of the asset’s carrying value over its fair value. No assets were determined to be impaired during the years ended December 31, 2025, 2024 and 2023. Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds from the offering, either as a reduction of the carrying value of preferred stock or in stockholders’ equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. As of December 31, 2025 and 2024, deferred offering costs of $ 0 and $ 413,000 , 101 Table of Contents respectively, were capitalized within other non-current assets in the consolidated balance sheets. The deferred offering costs were reclassified as a reduction to equity as a result of the closing of the IPO in August 2025. Internal-Use Software The Company capitalizes certain costs related to internal-use software during the application development stage. Costs related to planning and post implementation activities are expensed as incurred. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life, which is generally two years , after the product is deployed and ready for use. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized internal-use software costs are classified as a component of property and equipment, net. Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. An ROU asset and corresponding lease liability are recorded on the consolidated balance sheets based on the present value of lease payments over the lease term. An ROU asset represents the right to control the use of an identified asset over the lease term and a lease liability represents the obligation to make lease payments arising from the lease. Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets. The Company uses its incremental borrowing rate to determine the present value of lease payments, as the discount rate implicit in the lease is not readily available. The lease terms used to calculate the ROU asset and related lease liabilities include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company elected to account for contracts that contain lease and non-lease components as a single lease component. For the years ended December 31, 2025 and 2024, the Company’s only leases were for its facilities, which are classified as operating leases with lease expense recognized on a straight-line basis over the lease term. Variable lease costs, which primarily consist of common area maintenance, taxes, and utility charges are expensed as incurred. The Company does not have any finance leases. Term Loan Prior to its repayment in August 2025, the Term Loan (as defined in Note 8) was accounted for at amortized cost. Original debt issuance costs were deferred and presented as a reduction to the carrying value of the Term Loan. Debt discount and debt issuance costs were amortized using the effective interest method and recorded in interest expense within the consolidated statements of operations and comprehensive loss. See Note 8 for information about the repayment of the 2024 Term Loan and termination of the 2024 Credit Agreement. Upon repayment of the 2024 Term Loan, the remaining unamortized debt discount and debt issuance costs were recognized as a loss on extinguishment of debt within the consolidated statements of operations and comprehensive loss. 2022 Convertible Notes The Company issued Convertible Notes from September 2022 to December 2022, which were all converted to Series F-1 redeemable convertible preferred stock in March 2023. Refer to Notes 9 for additional information. The Convertible Notes contained embedded features that provided the Note Investors with multiple settlement alternatives. Rather than accounting for the embedded features that qualified as derivatives separately, the Company elected to account for the Convertible Notes at fair value each reporting period. Debt issuance costs were expensed as incurred. Until their conversion in March 2023, the Company recognized the changes in fair value (including interest) as change in fair value of convertible note within the consolidated statements of operations and comprehensive loss. 2025 Convertible Notes 102 Table of Contents The Company issued convertible notes in January and March 2025 (the “2025 Convertible Notes”) to various investors and certain employees (the “Requisite Holders”), which were accounted for at amortized cost. Debt issuance costs were deferred and presented as a reduction to the carrying value of the 2025 Convertible Notes prior to their conversion upon the IPO. The Company determined that certain features of the 2025 Convertible Notes contained embedded derivatives that provided the Requisite Holders with multiple settlement alternatives, and the embedded features that qualified as derivatives were accounted for separately. Debt discount and debt issuance costs were amortized using the effective interest method and recorded to interest expense within the consolidated statements of operations and comprehensive loss. The Company recognized the changes in fair value of the derivative liability as changes in fair value of derivative liability within the consolidated statements of operations and comprehensive loss through the IPO date. Upon the closing of the Company’s IPO, the aggregate principal balance of the 2025 Convertible Notes of $ 98.3 million converted into 6,470,743 shares of common stock, and the derivative liability balance of $ 24.6 million and the remaining unamortized debt discount and debt issuance costs of $ 28.8 million were reclassified to additional paid-in capital. Refer to Note 9 and Note 13 for additional information Common Stock Warrants Prior to its net exercise in October 2025, the Company’s warrants to purchase common stock that were issued in connection with the Term Loan were classified as a liability. The warrants were recorded at fair value upon issuance and were subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recognized as change in fair value of common stock warrant within the consolidated statements of operations and comprehensive loss. Refer to Note 12 for additional information. Embedded Derivatives Prior to its refinancing in June 2024, the Term Loan (as defined in Note 8) contained certain prepayment features, a default put option and default interest adjustment features that were determined to be embedded derivatives requiring bifurcation and separate accounting as a single compound derivative, as discussed in Note 13. The impact of bifurcation of the embedded derivative on the date of issuance was reflected as a debt discount. The fair value of the derivative liability related to the Company’s Term Loan, as discussed in Note 8, was estimated using a scenario-based analysis comparing the probability-weighted present value of the Term Loan payoff at maturity with and without the bifurcated features. This method isolates the value of the embedded derivative by measuring the difference in the host contract’s value with and without the isolated features. The resulting cash flows were discounted at the Company’s borrowing rate, as adjusted for fluctuations in the market interest rate from the inception of the Company’s comparative borrowings to the reporting date, to measure the fair value of the embedded derivative. Until its derecognition in June 2024, the derivative liability was remeasured to fair value at each reporting period, and the related change was reflected as change in fair value of derivative liability on the consolidated statements of operations and comprehensive loss. Prior to their conversion upon the IPO, the 2025 Convertible Notes contained certain settlement features and default put options that were determined to be embedded derivatives requiring bifurcation and separate accounting as a single compound derivative, as discussed in Note 13. The impact of the bifurcation of the embedded derivatives on the date of issuances in January and March 2025 was reflected as a debt discount. The fair value of the derivative liability related to the Company’s 2025 Convertible Notes, as discussed in Note 9, were estimated using a scenario-based analysis comparing the probability-weighted present value of the 2025 Convertible Notes with and without the bifurcated features. This method isolates the value of the embedded derivatives by measuring the difference in the host contract’s value with and without the isolated features. To measure the fair value of the embedded derivatives, the resulting cash flows were discounted using appropriate discount rates that reflect the overall implied risk of the instruments based on their purchase prices and adjusted for fluctuations in the market and Company interest rates when necessary. Prior to the Company’s IPO, the derivative liability was remeasured to fair value at each reporting period and the related change was reflected as a change in fair value of derivative liability on the consolidated statements of operations and comprehensive loss until the conversion of the 2025 Convertible Notes in connection with the IPO in August 2025. 103 Table of Contents Redeemable Convertible Preferred Stock Prior to its IPO, the Company recorded redeemable convertible preferred stock at fair value on the dates of issuance, net of issuance costs, which was classified outside of stockholders’ equity (deficit) because the preferred shares were contingently redeemable upon the occurrence of an event that is outside of the Company’s control. Upon the closing of the Company ’ s IPO, all shares of convertible preferred stock then outstanding automatically converted into an aggregate of 51,226,348 shares of common stock. Revenue Recognition The Company sells its Heartflow Platform to medical providers in the United States and in select international markets. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company identified a single performance obligation, which is comprised of a highly interdependent bundle of goods or services that are not distinct on their own but are as a group and consists of the requested analysis, including an image file and related licenses and support. Revenue recognition commences only after completion of installation, implementation and training for new customer accounts. The Company’s service consists of providing a visualization of the patient’s coronary arteries and enables physicians to create more effective treatment plans. This service is normally billable upon delivery of the analysis to the physician. Payment terms are generally net 30 days. Substantially all of the Company’s revenue is from usage-driven fees and generated on a “pay per click” basis each time a physician orders the Company’s Heartflow FFR CT Analysis and Plaque Analysis. Revenue is recognized when control of these services is transferred to the customer, at an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those services. The Company recognizes usage-driven fee revenue upon delivery of the requested analysis to the physician, which is when control of these services is transferred to the customer. The Company recognizes revenue on a straight-line basis over the contract term for subscriptions where the customer pays a fixed amount upfront for unlimited analyses. Contracts with customers typically include a fixed amount of consideration and are generally cancellable with 30 days ’ written notice. The transaction price consists of fixed consideration and variable consideration related to utilization and volume rebates for reimbursement claims from government and commercial payors which are known and determinable based on the number of analyses delivered within each quarterly period. The transaction price (inclusive of both fixed consideration and variable consideration that is not constrained) is recognized as revenue when control transfers. The Company uses a portfolio approach to estimate variable consideration using the expected value method. Unbilled Receivables Unbilled receivables generally represent revenue in which the Company has satisfied its performance obligation prior to invoicing. The Company records unbilled receivables within accounts receivable, net on the consolidated balance sheets, based on the Company’s unconditional right to payment at the end of the applicable period. Contract Costs Costs associated with product revenue include a flat rate commission per analysis and new customer site commissions as well as implementation and onboarding costs. The Company capitalizes new customer site 104 Table of Contents commissions and certain contract fulfillment costs, which include implementation and onboarding costs that are considered to be incremental to the acquisition of new customer contracts. Capitalized contract fulfillment costs are amortized over an estimated period of benefit of two years and capitalized new site commission costs are amortized over an estimated period of benefit of three years . The estimated period of benefit is determined by evaluating average customer life, the nature of the related benefit, and the specific facts and circumstances of the arrangements. The Company evaluates these assumptions at least annually and periodically reviews whether events or changes in circumstances have occurred that could impact the period of benefit. The Company expenses flat rate commissions when incurred as commensurate with its usage-driven fee revenue recognition and amortizes capitalized new customer site commissions to selling, general and administrative expense in the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2023, new site commission costs were not capitalized as the amount was not material. The Company amortizes capitalized contract fulfillment costs to cost of revenue in the consolidated statements of operations and comprehensive loss. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied. It includes contract liabilities and amounts that will be invoiced and recognized as revenue in future periods and does not include contracts where the customer is not committed. The customer is considered not committed when they are able to terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a practical expedient, the Company has not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Contract Liabilities The Company records contract liabilities when billings or payments are received in advance of revenue recognition. The contract liabilities balance is reduced as the revenue recognition criteria is met, generally within 12 months. Once services are available to customers, the Company records amounts due in accounts receivable, net and contract liabilities within accrued expenses and other current liabilities on the consolidated balance sheets. To the extent the Company bills customers in advance of the billing period commencement date, the accounts receivable and corresponding contract liabilities amount are netted to zero on the consolidated balance sheets, unless such amounts have been paid as of the balance sheet date. Cost of Revenue Cost of revenue consists of personnel and related expenses, including stock-based compensation costs, primarily related to our production team. Additional costs include third-party hosting fees, amortization of capitalized internal-use software, amortization of contract fulfillment costs as well as royalties associated with technology licenses used in connection with the delivery of the Company’s product and allocated overhead, which includes facilities expenses, equipment, depreciation and technology services. These costs are partially offset by capitalized contract fulfillment costs. The role of the production team is to support the Company’s patient case volume revenue by performing defined quality-related activities on CCTA scans submitted by its customers for analysis. The portion of these costs that supports patient case volume revenue is recorded as cost of revenue. The production team also supports activities in the Company’s clinical trials and research and development, which are allocated as research and development expense. Research and Development Costs related to research, design, development, clinical studies, regulatory activities, and medical affairs are charged to research and development and are expensed as incurred. These costs include, but are not limited to, personnel and related expenses, clinical trials, stock-based compensation costs, third-party consulting costs, the portion of the costs incurred by the production team to support clinical trials and research and development efforts, and allocated overhead, including rent, equipment, depreciation and utilities. 105 Table of Contents Clinical Trials The Company accrues and expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company determines these estimates through discussion with internal personnel and outside service providers as to progress or stage of completion of trials or services pursuant to contracts with clinical research organizations and other service providers and the agreed-upon fee to be paid for such services. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs includes design and production costs, including website development, testimonial videos, written media campaigns and other items. Advertising costs of $ 2.0 million, $ 1.5 million and $ 778,000 was expensed during the years ended December 31, 2025, 2024 and 2023, respectively. Stock-Based Compensation The Company accounts for share-based payments at fair value. The grant date fair value of options granted is measured using the Black-Scholes option pricing model. Option awards vest based on the satisfaction of a service requirement and stock-based compensation expense is recorded on a straight-line basis over the applicable service period, which is generally four years . For performance-based stock options, the Company will assess the probability of performance conditions being achieved in each reporting period. The amount of stock-based compensation expense recognized in any one period related to performance-based stock options can vary based on the achievement or anticipated achievement of the performance conditions. Forfeitures are recognized in the period in which the forfeiture occurs. The Company accounts for stock-based compensation for restricted stock units at their fair value, based on the closing market price of the Company’s common stock on the date of grant. These costs are recognized on a straight-line basis over the requisite service period, which is usually the vesting period. The Company accounts for stock-based compensation for its employee stock purchase plan based on the estimated fair value of the options on the date of grant. The Company estimates the grant date fair value using the Black-Scholes option pricing model for each purchase period. These costs are recognized on a straight-line basis over the offering period. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. As a result of the history of net operating losses, the Company has provided for a full valuation allowance in the United States against the deferred tax assets for assets that are not more-likely-than-not to be realized. The Company applies a comprehensive model for the recognition, measurement, presentation and disclosure in the consolidated financial statements of any uncertain tax positions that have been taken or are expected to be taken on a tax return using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. For tax positions that are more likely than not to be sustained upon audit, the second step is to measure the tax benefit in the financial statements as the largest benefit that has a greater than 50% likelihood of being sustained upon settlement. Significant judgment is required to evaluate uncertain tax positions. Changes in facts and circumstances could have a material impact on the Company’s effective tax rate and results of operations. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a component of provision for income taxes in the consolidated statements of operations and comprehensive loss. 106 Table of Contents Comprehensive Loss Comprehensive loss is comprised of net loss, changes in unrealized gains and losses on investments classified as available-for-sale and foreign currency translation gains and losses. Foreign Currency The functional currency of the Company’s foreign subsidiaries is the local currency except for Heartflow International Sarl, which was the U.S. Dollar. For all non-functional currency balances, the remeasurement of such balances to the functional currency results in either a foreign exchange transaction gain or loss, which is recorded within other income, net within the consolidated statements of operations and comprehensive loss. The Company recognized foreign exchange transaction losses of $ 216,000 , $ 269,000 and $ 172,000 during the years ended December 31, 2025, 2024 and 2023, respectively. During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 191,000 , $( 271,000 ) and $( 504,000 ) of foreign currency translation gain (loss), respectively, in the statements of comprehensive loss related to foreign subsidiaries which have local functional currencies. Net Loss Per Share Attributable to Common Stockholders Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the redeemable convertible preferred stock, common stock warrants, common stock options and restricted stock units are considered to be potentially dilutive securities. Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities as the redeemable convertible preferred stock and common stock subject to repurchase are considered participating securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss is attributed entirely to common stockholders. Diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss position during the years ended December 31, 2025, 2024 and 2023. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic companies. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. This guidance is effective for annual periods beginning after December 15, 2024. During the year ended December 31, 2025, the Company adopted ASU 2023-09 107 Table of Contents prospectively, which had a disclosure only impact on its consolidated financial statements. Refer to Note 17 for additional details. Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this pronouncement on the disclosures in its consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification Topic 606: Revenue from Contracts with Customers. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This ASU is effective for the Company on January 1, 2026. The Company does not expect adoption of this pronouncement to have a material impact on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40 by removing all references to project development stages and provides new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met to begin capitalizing software costs. This ASU is effective for fiscal years beginning after December 15, 2027 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The ASU may be applied on a prospective, retrospective or modified prospective basis. The Company is currently evaluating the impact of the adoption of this pronouncement on its consolidated financial statements. 3. Revenue and Contract Balances Disaggregation of Revenue The following table summarizes total revenue from customers by geographic region (in thousands): Year Ended December 31, 2025 2024 2023 United States $ 162,733 $ 115,036 $ 77,725 Rest of World 13,301 10,772 9,449 Total revenue $ 176,034 $ 125,808 $ 87,174 Revenues by geography are determined based on the region of the Company ’ s contracting entity, which may be different than the region of the customer. 108 Table of Contents Contract Balances Unbilled receivables included within accounts receivable on the consolidated balance sheets as of December 31, 2025 and 2024 was $ 814,000 and $ 574,000 , respectively. The following table provides the breakdown of capitalized contract costs on the consolidated balance sheets (in thousands): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 6,154 $ 2,941 $ 2,077 Contract costs capitalized 10,795 6,952 3,081 Contract costs amortized ( 6,020 ) ( 3,739 ) ( 2,217 ) Balance at end of period $ 10,929 $ 6,154 $ 2,941 The following table provides the breakdown of contract liabilities included within accrued expenses and other current liabilities on the consolidated balance sheets (in thousands): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 182 $ 498 $ 118 Contract liabilities added 279 — 470 Contract liabilities recognized as revenue ( 134 ) ( 316 ) ( 90 ) Balance at end of period $ 327 $ 182 $ 498 4. Fair Value Measurement The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): December 31, 2025 Level 1 Level 2 Level 3 Total Assets Money market funds, included in cash equivalents $ 27,806 $ — $ — $ 27,806 Money market funds, included in restricted cash, non-current 4,709 — — 4,709 U.S. government securities — 81,479 — 81,479 U.S. treasury bills — 39,593 39,593 Corporate bonds/notes — 57,571 — 57,571 Agency bonds/notes — 25,151 — 25,151 Asset-backed securities — 21,711 — 21,711 Commercial paper — 9,870 — 9,870 Total $ 32,515 $ 235,375 $ — $ 267,890 December 31, 2024 Level 1 Level 2 Level 3 Total Assets Money market funds, included in cash equivalents $ 36,882 $ — $ — $ 36,882 Total $ 36,882 $ — $ — $ 36,882 Liabilities Common stock warrant liability $ — $ — $ 20,835 $ 20,835 Total $ — $ — $ 20,835 $ 20,835 109 Table of Contents The following tables present a reconciliation of the Company’s financial liabilities measured at fair value as of December 31, 2025, 2024 and 2023 using significant unobservable inputs (Level 3) and the change in fair value (in thousands): 2022 Convertible Notes Fair value as of January 1, 2023 $ 56,066 Change in fair value 5,120 Derecognition of convertible notes upon conversion into redeemable convertible preferred stock ( 61,186 ) Fair value as of December 31, 2023 $ — The 2022 Convertible Notes, which are not regularly traded, are classified as Level 3, since their values cannot be determined by using readily observable inputs or measures, such as market prices (see Note 9). The fair value of the 2022 Convertible Notes was estimated as the sum of its components (conversion features and the debt component) as of the issuance dates and as of the subsequent balance sheet dates. To value each of the conversion features, a “with and without” methodology was employed. The debt component was valued using a discounted cash flow method that measured the net present value of the principal and interest payments to be received by the holders of the 2022 Convertible Notes (excluding the conversion features) through the estimated maturity date. Common Stock Warrant Liability Fair value as of January 1, 2023 $ 2,120 Change in fair value 2,320 Fair value as of December 31, 2023 4,440 Change in fair value 16,395 Fair value as of December 31, 2024 20,835 Change in fair value 43,894 Reclassification to common stock upon net exercise ( 64,729 ) Fair value as of December 31, 2025 $ — In determining the fair value of the common stock warrant liability, the Company used the Black-Scholes option pricing model to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield (see Note 12). Term Loan Derivative Liability Fair value as of January 1, 2023 $ 5,061 Change in fair value ( 4,158 ) Fair value as of December 31, 2023 $ 903 Change in fair value 222 Derecognition in connection with debt refinancing ( 1,125 ) Fair value as of December 31, 2024 $ — In determining the fair value of the term loan derivative liability, a two-step valuation approach was employed, which included a probability-weighted scenario valuation method, the Black-Scholes-Merton method, and the option pricing method, using unobservable inputs (see Note 13), which are classified as Level 3 within the fair value hierarchy, and then comparing the instrument’s value with and without the derivative features to estimate their combined fair value. The debt instrument is carried at amortized cost, which approximates its fair value. Convertible Notes Derivative Liability Fair value as of January 1, 2025 $ — Recognition of derivative liability related to Convertible Notes 31,900 Change in fair value ( 7,311 ) Derecognition upon conversion into common stock upon IPO ( 24,589 ) Fair value as of December 31, 2025 $ — In determining the fair value of the convertible notes derivative liability, a two-step valuation approach was employed, which included a probability-weighted scenario valuation method, the Monte Carlo Simulation method, and the option pricing method, using unobservable inputs (see Note 13), which are classified as Level 3 within the 110 Table of Contents fair value hierarchy, and then comparing the instrument’s value with and without the derivative features to estimate their combined fair value. The debt instrument is carried at amortized cost, which approximates its fair value. 5. Balance Sheet Components Investments The fair value of the Company ’ s available-for-sale investments and restricted cash as of December 31, 2025 are as follows (in thousands): December 31, 2025 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Assets Money market funds, included in cash equivalents $ 27,806 $ — $ — $ 27,806 Money market funds, included in restricted cash, non-current 4,709 — — 4,709 U.S. government securities 81,385 94 — 81,479 U.S. treasury bills 39,568 25 — 39,593 Corporate bonds/notes 57,564 19 ( 12 ) 57,571 Agency bonds/notes 25,147 7 ( 3 ) 25,151 Asset-backed securities 21,689 22 — 21,711 Commercial paper 9,868 2 — 9,870 Total $ 267,736 $ 169 $ ( 15 ) $ 267,890 Classified as: Cash equivalents $ 27,806 Short-term investments 132,010 Long-term investments 103,365 Restricted cash 4,709 Total $ 267,890 The following table summarizes the fair value of the Company’s cash equivalents, and available-for-sale investments classified by maturity as of December 31, 2025 (in thousands): December 31, 2025 Amounts maturing within one year $ 159,816 Amounts maturing after one year through two years 103,365 Total $ 263,181 Available-for-sale investments held as of December 31, 2025 had a weighted average days to maturity of 346 days . The following table presents the Company ’ s available-for-sale investments that were in an unrealized loss position as of December 31, 2025 (in thousands): December 31, 2025 Less than 12 months Fair Value Unrealized Loss Assets Corporate bonds/notes $ 26,716 $ ( 12 ) Agency bonds/notes 3,995 ( 3 ) Total $ 30,711 $ ( 15 ) There were no available-for-sale investments in an unrealized loss position greater than twelve months as of December 31, 2025. ‎ 111 Table of Contents Allowance for Credit Losses The following table presents a reconciliation of the allowance for credit losses (in thousands): Year Ended December 31, 2025 2024 Balance at beginning of period $ 814 $ 1,058 Additions — — Write-offs ( 188 ) ( 244 ) Balance at end of period $ 626 $ 814 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are comprised of the following (in thousands): December 31, 2025 2024 Prepaid expenses $ 5,964 $ 3,017 Contract costs, current 6,669 2,453 Other 1,442 662 Total prepaid expenses and other current assets $ 14,075 $ 6,132 Property and equipment, net Property and equipment consisted of the following (in thousands): December 31, 2025 2024 Property and equipment at cost: Computer equipment and software $ 4,223 $ 4,489 Furniture, fixtures and equipment 2,114 1,233 Capitalized internal-use software 12,529 52,606 Leasehold improvements 2,086 2,057 Construction in progress 140 27 Total property and equipment 21,092 60,412 Less: Accumulated depreciation and amortization ( 12,505 ) ( 51,492 ) Property and equipment, net $ 8,587 $ 8,920 The Company capitalized certain internal-use software costs totaling $ 3.9 million, $ 4.1 million and $ 4.6 million, including stock-based compensation of $ 27,000 , $ 393,000 and $ 408,000 related to internal-use software development efforts, during the years ended December 31, 2025, 2024 and 2023, respectively. Amortization of capitalized internal-use software totaled $ 4.0 million, $ 3.7 million and $ 3.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Depreciation and amortization expense related to property and equipment, excluding capitalized internal-use software, was $ 1.5 million, $ 1.7 million and $ 1.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Other Non-Current Assets Other non-current assets are comprised of the following (in thousands): December 31, 2025 2024 Contract costs, net $ 4,260 $ 3,701 Deferred offering costs — 413 Other 839 252 Total other non-current assets $ 5,099 $ 4,366 112 Table of Contents Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are comprised of the following (in thousands): December 31, 2025 2024 Accrued payroll and related expenses $ 28,150 $ 18,206 Accrued professional fees 1,162 1,672 Accrued clinical trial expenses 864 1,215 Customer contract and rebate liabilities 627 1,041 Accrued royalty 550 736 Other 1,926 2,449 $ 33,279 $ 25,319 6. Leases The Company leases office space in Mountain View, Santa Rosa, San Francisco, and Rohnert Park, California, Austin, Texas, and Tokyo, Japan. Mountain View, California In August 2021, the Company entered into a facility lease agreement for approximately 61,000 rentable square feet in Mountain View, California through August 2030. The Company received a tenant improvement allowance of $ 1.8 million, in which the remaining unused amount of $ 1.4 million was credited against rent expense during the year ended December 31, 2023. In connection with the lease, the Company established a standby letter of credit for the benefit of the landlord in the amount of $ 4.3 million in August 2021, which is classified as non-current restricted cash on the consolidated balance sheets as of December 31, 2025 and 2024. Refer to Note 18 for additional information. Santa Rosa, California In October 2024, the Company entered into an agreement to sublease approximately 4,000 rentable square feet of office space in Santa Rosa, California for 29 months through March 2027. In connection with this sublease, the Company paid a security deposit of $ 8,000 and recorded an ROU asset and lease liability of $ 169,000 . San Francisco, California In July 2025, the Company entered into an agreement to sublease approximately 8,100 rentable square feet of office space in San Francisco, California for 39 months through January 2029. In connection with this sublease, the Company paid a security deposit of $ 90,000 and recorded an ROU asset and lease liability of $ 1,254,000 . Rohnert Park, California On December 15, 2025, the Company entered into a facility lease agreement for approximately 13,100 rentable square feet of office space in Rohnert Park, California for 63 months from the lease commencement date, with the option to extend for one additional three-year period. In connection with the lease, the Company paid a security deposit of $ 39,000 . The average monthly lease payments are approximately $ 32,000 per month during the lease term and provides for a tenant improvement allowance of $ 173,000 . The lease is expected to commence in the first quarter of 2026. Austin, Texas In January 2023, the Company amended its facility lease agreement in Austin, Texas, which provided for approximately 26,000 square feet of space, to extend the original lease term which expired in November 2023 with a five-year renewal option to December 2025 with no renewal option. In September 2025, the Company amended the lease for its Austin, Texas facility to extend the lease term an additional 12 months through December 2026 and recorded an ROU asset and lease liability of $ 561,000 in connection with the lease extension. A security deposit of 113 Table of Contents $ 150,000 was recorded as non-current restricted cash as of December 31, 2025 and as current restricted cash as of December 31, 2024, on the consolidated balance sheets related to this lease. Refer to Note 18 for additional information. Tokyo, Japan The Company had one non-cancellable operating lease for its facility in Tokyo, Japan which was set to expire in November 2024. In April 2024, the Company entered into an agreement to extend the lease for an additional three years through November 2027. In connection with the amended lease agreement, the Company recorded an ROU asset and lease liability of $ 420,000 . Operating l ease cost consisted of the following (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease cost $ 5,122 $ 4,900 $ 4,906 Variable lease cost 1,375 1,597 1,120 Total lease cost $ 6,497 $ 6,497 $ 6,026 Cash paid for amounts included in the measurement of operating lease liabilities during the years ended December 31, 2025, 2024 and 2023 was $ 5.7 million, $ 5.2 million and $ 4.1 million, respectively. The following table summarizes the maturities of the aggregate lease payments under the Company’s operating lease liabilities as of December 31, 2025 (in thousands): Year Ending December 31: Amount 2026 $ 6,178 2027 5,658 2028 5,649 2029 5,352 2030 3,646 Total minimum lease payments 26,483 Less: Amount of lease payments representing interest 4,429 Present value of future minimum lease payments $ 22,054 Less: Current lease liabilities 5,922 Long-term lease liabilities $ 16,132 The following table summarizes additional information related to the Company’s operating leases (in thousands, except weighted-average data): December 31, 2025 2024 Right-of-use asset $ 17,488 $ 18,805 Weighted average remaining lease term (years) 4.3 5.5 Weighted average discount rate (percent) 8.6 % 9.0 % 7. Commitments and Contingencies Royalty Commitments The Company has entered into various exclusive technology licensing agreements and other software licensing agreements. The terms of the agreements require the Company to make annual royalty payments in fixed amounts as well as certain milestone and revenue-based payments. The revenue-based royalty percentage is in the low single digits, subject to reductions and offsets in certain circumstances with a minimum royalty commitment of $ 50,000 annually. Future minimum royalty commitments due under the terms of these exclusive agreements as of December 31, 2025 are as follows (in thousands): ‎ 114 Table of Contents Year Ending December 31: Amount 2026 $ 50 2027 50 2028 50 2029 50 2030 50 Thereafter 50 $ 300 The Company incurred royalty expense of $ 2.0 million, $ 1.5 million and $ 2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. Purchase Commitments Open purchase commitments consist of agreements to purchase goods and services that are entered into in the ordinary course of business. These amounts were not recorded as liabilities on the consolidated balance sheets as of December 31, 2025 as the Company had not yet received the related goods or services. As of December 31, 2025, the Company had estimated open purchase commitments for goods and services of $ 5.2 million over the next four years . Contingencies The Company is not involved in any pending legal proceedings that it believes could have a material adverse effect on its financial condition, results of operations or cash flows except as discussed below. The Company may pursue or be subject to litigation and other legal actions from time to time arising in the ordinary course of business, including intellectual property, products liability, breach of contract, commercial, employment, and other similar claims which could have an adverse impact on its reputation, business and financial condition and divert the attention of its management from the operation of its business. The Company discloses information regarding each material claim where the likelihood of a loss contingency is probable or reasonable possible and accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual or disclosures as of December 31, 2025 and 2024. Civil Investigative Demand Investigation In October 2025, the Company and certain of its employees received civil investigative demands (the “CID”) from the U.S. Department of Justice, Civil Division, in connection with an investigation under the federal Anti-Kickback Statute and Civil False Claims Act (the “Investigation”). The CID requests information, documents, and testimony focused on the Company’s financial and contractual arrangements with providers and its sales and marketing activities. The Company is cooperating with the Investigation and is unable to express a view at this time regarding the likely duration, or ultimate outcome, of the Investigation or estimate the possibility of, or amount or range of, any possible financial impact. Depending on the outcome of the Investigation, there may be a material impact on the Company’s business, results of operations, financial condition, or cash flows. Indemnifications The Company provides general indemnifications to management and the members of the Company’s board of directors (the “Board of Directors”) when they act, in good faith, in the best interest of the Company. The Company is unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but expects the risk of having to make any payments under these general business indemnifications to be remote. The Company also maintains insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. 115 Table of Contents 8. Term Loan 2024 Credit Agreement On June 14, 2024, the Company entered into a Credit Agreement and Guaranty (the “2024 Credit Agreement”) with Hayfin Services, LLP (“Hayfin”) for a $ 138.1 million term loan (the “2024 Term Loan”) to refinance its outstanding loan obligations under the 2021 Credit Agreement, as amended (the “2021 Credit Agreement”). In addition, in connection with the 2024 Term Loan, the Company entered into several other adjoining agreements with Hayfin. The 2024 Term Loan extended the maturity date from January 19, 2026 to June 14, 2028. The 2024 Credit Agreement was accounted for as a debt modification for accounting purposes. On January 24, 2025, in connection with the issuance of the 2025 Convertible Notes, the Company entered into Amendment No.1 to the 2024 Credit Agreement, in which Hayfin converted $ 23.0 million of principal under the 2024 Term Loan to 2025 Convertible Notes under the same terms as the other purchasers of the 2025 Convertible Notes. The amendment was accounted for as a debt modification for accounting purposes. Prepayment Terms and Other Fees Any prepayment or repayment of the principal balance of the 2024 Term Loan was subject to an exit fee. The Company accreted the exit fee over the loan term using the effective interest method. Under the 2024 Term Loan, the Company had the option to prepay the 2024 Term Loan subject to a prepayment fee of 1.5 % for prepayments after the second anniversary but on or prior to the third anniversary of the 2024 Term Loan and a prepayment fee of 3 % for prepayments thereafter. The 2024 Credit Agreement required the Company to repay the loan in full immediately upon the occurrence of a change in control. In addition, immediately upon the consummation of an IPO or SPAC transaction, as defined in the terms of the 2024 Credit Agreement, the Company was required to repay the 2024 Term Loan in an amount equal to the lesser of (i) the net cash proceeds of such IPO or SPAC transaction in excess of $ 150.0 million and (ii) $ 35.0 million. In connection with Amendment No.1 to the 2024 Term Loan in January 2025, the amount immediately payable upon the consummation of an IPO or SPAC transaction, as defined in the terms of the 2024 Credit Agreement, was amended where repayment of the 2024 Term Loan was required to be at an amount equal to the lesser of (i) the net cash proceeds of such IPO or SPAC transaction in excess of $ 150.0 million and (ii) $ 50.0 million (or $ 55.0 million if the underwriters exercised any portion of their option to purchase additional shares). On June 14, 2024, concurrently with entering the 2024 Credit Agreement, the Company signed a fee letter agreement with Hayfin under which the Company agreed to pay $ 9.2 million in fees to Hayfin, which consisted of a 3 % exit fee and a 3 % early prepayment fee due under the 2021 Credit Agreement in the amount of $ 8.3 million payable in sixteen equal quarterly installments of approximately $ 518,000 through March 31, 2028, agent fees of $ 150,000 , due in annual installments of $ 30,000 through March 31, 2028 and an upfront fee of $ 721,000 . The Company paid the $ 721,000 upfront fee and $ 30,000 agent fee upon the closing of the 2024 Term Loan. The exit fee and early prepayment fee was required to be repaid in full immediately upon the occurrence of a financing event, including, but not limited to, any IPO, SPAC transaction, or issuance of convertible notes or equity. The exit fee and early prepayment fee remaining under the original terms of the 2024 Term Loan, which were immediately due and payable upon issuance of the 2025 Convertible Notes, was amended in January 2025 to be immediately due and payable upon the next occurrence of a financing event and was fully repaid on August 18, 2025 upon completion of the Company’s IPO as described above. On August 18, 2025, the Company repaid $ 55.0 million of indebtedness outstanding under the 2024 Credit Agreement for which it was obligated to pay in connection with the completion of the Company’s IPO and approximately $ 5.8 million in fees consisting of a 3.0 % exit fee and a 3.0 % early prepayment fee due under the 2021 Credit Agreement, as amended. On August 22, 2025, the Company prepaid in full all outstanding amounts under, and terminated, the 2024 Credit Agreement, in the aggregate principal amount of $ 60.1 million plus accrued interest of $ 1.0 million. The Company did not incur exit or prepayment fees in connection with the termination of the 2024 Credit Agreement. 116 Table of Contents Interest During its term, the 2024 Term Loan bore interest at a floating per annum rate in an amount equal to the sum of (i) 7.0 % (or 6.0 % if the alternative base rate (“ABR”) is in effect) plus (ii) the greater of (x) the forward-looking term rate based on the Secured Overnight Financing Rate (“SOFR”) for a respective tenor (or the alternative base rate, if applicable), and (y) 2.0 %. The ABR equals to the sum of (i) 6.0 % plus (ii) the greater of (1) the Wall Street Journal Prime Rate, plus 0.5 %, (2) the Federal Reserve Bank of New York rate plus 0.5 % or (3) CBA Term SOFR for one month tenor plus 1.0 %. The Company had the option to pay interest in-kind at the rate equal to the cash interest rate plus 1.0 %. Debt Issuance Costs and Debt Discount Debt issuance costs include third-party costs incurred in connection with the original Credit Agreement. Debt discount includes fees paid to the lender, warrants issued to the lender and the embedded derivative liability as described below. Prior to the refinancing of the 2021 Credit Agreement with the 2024 Term Loan (the “2024 Term Loan Refinancing”), certain prepayment features of the Term Loan, default put option and default interest adjustment features were determined to be embedded derivatives requiring bifurcation and separate accounting for at fair value as a single compound derivative. The fair value of the derivative liability was $ 2.1 million, as of the issuance date in January 2021, and was remeasured to fair value at each reporting period. In connection with the 2024 Term Loan Refinancing, the associated current fair value of the derivative liability of $ 1.1 million was remeasured at the date of refinancing and was derecognized and recorded as a debt discount to the 2024 Term Loan. Refer to Note 13 for additional information. In connection with the conversion of $ 23.0 million of principal under the 2024 Term Loan to 2025 Convertible Notes under Amendment No.1 to the 2024 Credit Agreement in January 2025, $ 239,000 of pro-rata debt discount under the 2024 Term Loan was reclassified as a debt discount under the 2025 Convertible Notes. Prior to the term loan repayment in August 2025, the debt issuance costs and debt discount were classified as an offset to the Term Loan on the consolidated balance sheets, and was accreted over the loan term using the effective interest method. 9. Convertible Notes 2022 Convertible Notes During the period from September 2022 through December 2022, the Company issued convertible promissory notes to certain investors (the “Note Investors”), with an aggregate principal amount of $ 40.0 million (the “Convertible Notes”). The Convertible Notes bore interest at a rate of 8 % per annum, compounded monthly. The aggregate principal amount and interest accrued on the Convertible Notes was due September 30, 2026, and could not be prepaid by the Company without the consent of a majority of the Note Investors. In March 2023, the Company completed the IPO, which constituted a Qualified Financing (as defined in the indenture governing the Convertible Notes), and all of the Convertible Notes, including principal and interest, were converted into 21,465,064 shares of Series F-1 redeemable convertible preferred stock and the Company derecognized the Convertible Notes from its consolidated balance sheets. The Company remeasured the fair value of the Convertible Notes immediately before the conversion and recognized a loss of $ 5.1 million from the change in fair value within the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. 2025 Convertible Notes In January and March 2025, the Company issued convertible promissory notes to Requisite Holders in the aggregate amount of $ 98.3 million, which was comprised of $ 74.0 million in principal amount of notes issued for cash 117 Table of Contents consideration, $ 1.3 million in principal amount of notes issued in lieu of cash compensation to certain employees and $ 23.0 million in principal amount of notes issued from the conversion of principal under the 2024 Term Loan. Net cash proceeds was $ 72.8 million after deducting $ 1.2 million of debt issuance costs. Prior to its conversion upon the Company’s IPO, the 2025 Convertible Notes were due and payable in full 48 months from the issue date and did not accrue interest for one year following the date of issuance. Upon completion of the Company’s IPO in August 2025, the 2025 Convertible Notes automatically converted into 6,470,743 shares of the Company’s common stock at $ 15.20 per share, which was a 20 % discount to the IPO price. Prior to its conversion upon the Company’s IPO, the 2025 Convertible Notes contained embedded derivative features, including conversion upon a change in control and automatic conversion upon completion of a qualified IPO, that were required to be bifurcated and accounted for separately as a single derivative instrument. The issuance date estimated fair values of the derivative liability was $ 11.1 million and $ 20.8 million in January and March 2025, respectively, which was accounted for as a debt discount. See Note 13 for additional information. The debt issuance costs and debt discount were classified as an offset to the 2025 Convertible Notes on the consolidated balance sheets, and were accreted over the loan term using the effective interest method. Upon the closing of the Company’s IPO, the remaining unamortized debt discount and debt issuance costs of $ 28.8 million were reclassified to additional paid-in capital. 10. Redeemable Convertible Preferred Stock In March 2023, the Company issued 61,344,029 shares of Series F redeemable convertible preferred stock to existing and new investors at a price per share of $ 2.8505 for an aggregate cash consideration of $ 174.9 million, net of $ 5.9 million issuance costs. Contemporaneously with the issuance of the Series F redeemable convertible preferred stock, the Company converted all of the outstanding Convertible Notes issued by the Company from September 30, 2022 to December 16, 2022, in the aggregate principal amount of $ 40.0 million plus accrued, unpaid interest of $ 994,000 into 21,465,064 shares of Series F-1 redeemable convertible preferred stock at a price per share of $ 1.9098 , which represents a discount of 33 % from the cash purchase price per share. Additionally, in connection with the Series F redeemable convertible preferred stock financing, the cumulative dividends payable to holders of Series C redeemable convertible preferred stock upon a liquidation event were capped from $ 6.66 to $ 8.25 per share depending on the time of issuance, with an aggregate total of $ 88.5 million. The issuance of the Series F redeemable convertible preferred stock triggered the anti-dilution protection provision for Series B-1, Series B-2, Series C, Series D and Series E stockholders. As a result, the Company recorded a $26.8 million deemed dividend in the amount equal to the change in fair value of the abovementioned series of convertible preferred stock before and after the anti-dilution adjustment. Redeemable convertible preferred stock consisted of the following as of December 31, 2024 (in thousands, except share amounts): December 31, 2024 Number of Number of Shares Issued Shares and Carrying Liquidation Series Authorized Outstanding Value Value Series A 4,082,965 4,082,965 $ 2,041 $ 2,041 Series B-1 1,954,846 1,954,846 6,940 6,940 Series B-2 2,848,263 2,848,263 10,111 10,111 Series C 11,343,434 11,343,434 104,378 193,167 Series D 7,151,873 7,151,873 110,756 110,854 Series E 12,040,980 12,040,980 304,197 305,018 Series F 61,344,029 61,344,029 168,957 262,295 Series F-1 21,465,064 21,465,064 61,186 61,491 Total 122,231,454 122,231,454 $ 768,566 $ 951,917 Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into 51,226,348 shares of common stock. Shares of Series A, Series B-1, Series B-2, Series C, Series D, Series E, Series F and Series F-1 outstanding redeemable convertible preferred stock converted into shares of common stock on a 0.342466 :1, 118 Table of Contents 0.403088 :1, 0.403088 :1, 0.576386 :1, 0.646673 :1, 0.695098 :1, 0.342466 :1, and 0.342466 :1 basis, as adjusted for the Reverse Stock Split, respectively. As of December 31, 2025, the Company does not have any convertible preferred stock issued or outstanding. 11. Stockholders’ Equity (Deficit) Preferred Stock At December 31, 2025, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 50,000,000 shares of preferred stock with $ 0.001 par value per share, of which no shares were issued and outstanding. Common Stock At December 31, 2025, under the Company’s Amended and Restated Certificate of Incorporation, the Company is authorized to issue 250,000,000 shares of $ 0.001 par value common stock, of which 85,280,597 shares were issued and outstanding. The holders of common stock are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. As of December 31, 2025, no dividends have been declared to date. Each share of common stock is entitled to one vote. Common stock reserved for future issuance, on an as-converted basis, consisted of the following: December 31, 2025 2024 Redeemable convertible preferred stock — 51,226,348 Options to purchase common stock 10,003,254 8,537,203 Restricted stock units 907,703 — Shares reserved for issuance under the Company's equity plans 14,085,870 1,079,492 Common stock warrants — 1,647,667 Total 24,996,827 62,490,710 12. Common Stock Warrant Liability On January 19, 2021, in connection with entering into the Credit Agreement, the Company issued Hayfin a warrant to purchase 108,154 shares of common stock at an exercise price of $ 0.03 per share. On March 17, 2022, upon amendment to the Credit Agreement, the Company issued Hayfin a warrant to purchase 77,253 shares of common stock at an exercise price of $ 0.03 per share. On March 3, 2023, upon Amendment No. 4 to the Credit Agreement and as a result of antidilution adjustment provisions in connection with the Series F redeemable convertible preferred stock financing, the Company issued Hayfin a warrant to purchase 1,462,260 shares of common stock at an exercise price of $ 0.03 per share (collectively, the “Warrants”). The aggregate fair value of the Warrants issued in connection with the 2021 Credit Agreement and the amended 2021 Credit Agreement was $ 4.3 million and $ 3.5 million, respectively, at issuance and was recognized as a debt discount and recorded as a warrant liability. The warrant liabilities were remeasured to fair value as of December 31, 2024, resulting in a loss of $ 16.4 million within the consolidated statements of operations and comprehensive loss. On October 22, 2025, Hayfin net exercised all common stock warrants outstanding for 1,646,317 shares of common stock. The common stock warrant liability was remeasured to fair value through the date of exercise, resulting in a loss of $ 43.9 million within the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. The final fair value of $ 64.7 million was reclassified to stockholders equity (deficit) on the date of exercise. As of December 31, 2025 and 2024, there were 0 and 1,647,667 warrants to purchase common stock outstanding. The fair value of the common stock warrant liability was determined using the Black-Scholes option pricing model based on the following weighted average assumptions: ‎ 119 Table of Contents October 22, December 31, 2025 2024 Stock price $ 39.31 $ 12.68 Exercise price $ 0.03 $ 0.03 Expected term (in years) 5.7 6.6 Expected volatility 55.7 % 72.1 % Weighted average risk-free interest rate 3.63 % 4.44 % Dividend yield —% —% 13. Derivative Liability Term Loan Prior to the 2024 Term Loan Refinancing in June 2024, the Term Loan contained certain prepayment features, default put option and default interest adjustment features that were determined to be embedded derivatives requiring bifurcation and separate accounting as a single compound derivative, as discussed in Note 8. The fair value of the derivative liability was recorded at the issuance date as debt discounts and reductions to the carrying value of long-term debt on the consolidated balance sheets. The derivative liability is remeasured to fair value at each reporting period and the related changes in fair value are recorded on the consolidated statements of operations and comprehensive loss. Through the time of the 2024 Term Loan Refinancing in June 2024, the Company continued to adjust the derivative liability for changes in fair value of the Term Loan. Estimating fair values of the derivative liability requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Since the derivative financial instrument is initially and subsequently carried at fair value, the Company’s income will reflect the volatility in these estimate and assumption changes. The derivative liability was remeasured to fair value as of June 14, 2024 and December 31, 2023, resulting in a loss of $ 222,000 and a gain of $ 4.2 million, respectively, within the consolidated statements of operations and comprehensive loss. In connection with the 2024 Term Loan Refinancing on June 14, 2024, the associated current fair value of the derivative liability of $ 1.1 million as remeasured at the date of refinancing was derecognized and recorded as a debt discount to the 2024 Term Loan. The fair value of the derivative liability was estimated using a scenario-based analysis comparing the probability-weighted present value of the Term Loan payoff at maturity with and without the bifurcated features. The Company used both the Black-Scholes-Merton and option pricing method to estimate the fair value of the derivative liability because it believes these techniques are reflective of all significant assumption types and ranges of assumption inputs that market participants would likely consider in transactions involving compound embedded derivatives. The option pricing method was employed as part of a back-solve analysis to the Company’s Series F Preferred round of financing. The Company’s assumptions used in determining the fair value of the derivative liability is as follows: June 14, 2024 Debt yield 18.50 % Probability of business combination or IPO (with feature) 80.00 % Event date of business combination or IPO (with feature) 6/30/2025 Probability to incur new debt 0.00 % Event date to incur new debt n/a Probability of change of control 10.00 % Event date of change of control 6/30/2025 Event date (without feature) 1/19/2026 Debt yield — Discount rate that reconciles the total fair value of the Warrants and 2021 Credit Agreement with the transaction value. Debt yield reflects a change in the credit benchmark for a “CCC” rated obligation. 120 Table of Contents 2025 Convertible Notes The 2025 Convertible Notes were determined to contain certain settlement features and conversion put options which require bifurcation and separate accounting as a single compound embedded derivative, as discussed in Note 9. The fair value of the derivative liability was recorded at the issuance dates as a debt discount and reduction to the carrying value of the 2025 Convertible Notes on the consolidated balance sheets. The derivative liability is remeasured to fair value at each reporting period and the related changes in fair value are recorded on the consolidated statements of operations and comprehensive loss. The fair value of the derivative liability was estimated using a scenario-based analysis comparing the probability-weighted present value of the 2025 Convertible Notes with and without the bifurcated features. The Company used the Monte Carlo Simulation method to estimate the fair value of the derivative liability because it believes this technique is reflective of all significant assumption types and ranges of assumption inputs that market participants would likely consider in transactions involving compound embedded derivatives. The option pricing method was employed as part of a back-solve analysis for scenarios in which the Company was expected to raise another financing round. The Company also employed a waterfall analysis that allocated certain exit proceeds to its outstanding share classes for scenarios in which the Company was assumed to exit via change of control or IPO. The Company’s assumptions used in determining the issuance date fair value of the derivative liability is as follows: March 26, 2025 January 31, 2025 Debt yield 7.0 % 7.0 % Probability of IPO 75.0 % 60.0 % Event Date of IPO 5/9/2025 5/5/2025 Probability of change of control 10.0 % 20.0 % Event date of change of control 3/26/2026 1/31/2026 Discount rate 63.7 % 31.3 % The issuance date estimated fair values of the derivative liability was $ 11.1 million and $ 20.8 million in January and March 2025, respectively, which were recorded as debt discounts. The derivative liability was remeasured to fair value at the end of each reporting period and through the date of its conversion to common stock upon the Company’s IPO. The aggregate estimated fair value of the derivative liability at the time of conversion was $ 24.6 million, based on the 20 % discount from the IPO price, which was reclassified to additional paid-in capital. 14. Stock-Based Compensation Plans In 2009, the Company adopted its 2009 Equity Incentive Plan which provided for the grant of stock options to the Company’s employees, members of the Board of Directors and consultants. Effective upon the Company’s IPO in August 2025, the Company’s Board of Directors approved the termination of the 2009 Equity Incentive Plan and the adoption of the 2025 Performance Incentive Plan (“2025 Plan”). Options granted under the 2025 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to employees. NSOs, Stock Appreciation Rights, Restricted Stock, and Restricted Stock Units (“RSUs”) may be granted to employees, members of the Board of Directors and consultants. A total of 17,346,193 shares of common stock were initially reserved for issuance pursuant to the 2025 Plan. In addition, the shares reserved for issuance under the 2025 Plan will also include shares reserved but not issued under the 2009 Equity Incentive Plan, plus any share awards granted under the 2009 Equity Incentive Plan that expire or terminate without having been exercised in full or that are forfeited or repurchased. In addition, the number of shares available for issuance under the 2025 Plan will also include an annual increase on the first day of each fiscal year beginning in fiscal 2026, equal to or greater than (i) 5 % of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year less any Board of Directors-approved increase(s) during the preceding fiscal year; or (ii) an amount as determined by the Board of Directors. Options under the 2009 Equity Incentive Plan and 2025 Plan have a term of ten years from the grant date. The option exercise price will be determined by the Board of Directors, but will be no less than 100 % of the fair market value per share on the date of grant. In addition, in the case of an ISO granted to an employee who owns stock 121 Table of Contents representing more than 10 % of the voting power of all classes of stock of the Company, the per share exercise price will be no less than 110 % of the fair market value per share on the date of grant. Through December 31, 2025 and 2024, options granted generally vest over (i) four years with 25 % vesting on the first anniversary of the issuance date and 1/48 th per month thereafter or (ii) vesting monthly in equal installments over four years . Stock option activity under the Company’s 2009 Equity Incentive Plan and 2025 Plan is set forth below (in thousands, except share and per share amounts): Number of Options Awards Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance at December 31, 2024 8,537,210 $ 4.72 7.96 $ 68,256 Options granted 2,552,686 $ 18.51 Options exercised ( 617,134 ) $ 5.33 Options forfeited ( 469,508 ) $ 7.97 Balance at December 31, 2025 10,003,254 $ 8.05 7.83 $ 211,109 Vested and exercisable, December 31, 2025 4,371,128 $ 5.33 6.72 $ 104,102 Vested and expected to vest, December 31, 2025 10,003,254 $ 8.05 7.83 $ 211,109 The weighted-average grant date fair value of options granted during the years ended December 31, 2025, 2024 and 2023 was $ 10.54 , $ 3.59 and $ 1.26 per share, respectively. The total grant date fair value of options vested was $ 8.6 million, $ 2.0 million and $ 3.2 million during the years ended December 31, 2025, 2024 and 2023, respectively. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money at each reporting period. The aggregate intrinsic value of stock options exercised for the years ended December 31, 2025, 2024 and 2023 was $ 10.1 million. $ 1.7 million and $ 4,000 , respectively. Restricted Stock Units In August 2025, the Company began granting RSUs under the 2025 Plan. RSUs generally vest over four years in equal quarterly increments. The fair value of RSUs is based on the Company’s closing stock price on the date of grant. A summary of RSUs activity is set forth below: Number of Restricted Stock Units Awards Weighted-Average Grant Date Fair Value Unvested balance at December 31, 2024 — $ — Awards granted 987,025 $ 20.22 Awards vested ( 47,018 ) $ 19.00 Awards canceled ( 32,304 ) $ 19.00 Unvested balance at December 31, 2025 907,703 $ 20.33 2025 Employee Stock Purchase Plan Effective upon the Company’s IPO, in August 2025, the Company’s Board of Directors adopted the 2025 Employee Stock Purchase Plan (“2025 ESPP”), under which eligible employees are permitted to purchase common stock at a discount through payroll deductions. A total of 1,233,964 shares of common stock are reserved for issuance and will be increased on the first day of each fiscal year, beginning in 2026, by an amount equal to the lesser of (i) 1.0 % of the issued and outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (ii) an amount as determined by the Board of Directors. The price of the common stock purchased will be the lower of 85 % of the fair market value of the common stock at the beginning of an offering period or at the end of a purchase period. The 2025 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “IRC”). 122 Table of Contents Stock-Based Compensation The Company estimated the fair value of stock options using the Black-Scholes option-pricing model based on the following assumptions: Year Ended December 31, 2025 2024 2023 Expected life (in years) 6.00 6.00 6.00 Expected volatility 55.0 %- 57.9 % 53.7 %- 55.0 % 54.7 %- 55.7 % Risk-free interest rate 3.7 %- 4.2 % 3.5 %- 4.5 % 4.2 % Dividend yield —% —% —% The Company estimated the fair value of the shares to be issued under the Company’s 2025 ESPP using the Black-Scholes option-pricing model based on the following assumptions: Year Ended December 31, 2025 Expected life (in years) 0.6 Expected volatility 58.1 % Risk-free interest rate 4.1 % Dividend yield —% The significant assumptions used in these calculations are summarized as follows: Fair value of common stock . Because there had been no public market for the Company’s common stock prior to the IPO, the fair value of common stock shares underlying stock options has historically been determined by the Board of Directors at the time of option grant by considering an independent valuation performed by a third-party valuation firm as well as a number of objective and subjective factors, including a valuation of comparable companies, sales of convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, among other factors. The fair value of common stock was determined in accordance with applicable elements of the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Subsequent to its IPO, the fair value of the underlying common stock is based on the closing price of the Company’s common stock on the Nasdaq Stock Market on the date of grant. Expected term. The expected term of stock options represents the weighted-average period the stock options are expected to remain outstanding. The Company does not have sufficient historical exercise and post-vesting termination activity to provide accurate data for estimating the expected term of options and has opted to use the “simplified method,” whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. Expected volatility. As the Company was not publicly traded prior to the IPO and does not have sufficient trading history after the IPO, the expected volatility for the Company’s stock options was determined by using an average of historical volatilities of selected industry peers deemed to be comparable to the Company’s business corresponding to the expected term of the awards. Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the awards. Expected dividend yield. The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends on its common stock. The Company also issues stock options with vesting based upon completion of performance goals. The fair value for these performance-based awards is recognized over the period during which the goals are to be achieved. Stock-based compensation expense recognized at fair value includes the impact of estimated probability that the goals would be achieved, which is assessed prior to the requisite service period for the specific goals. 123 Table of Contents Total stock-based compensation expense is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ 413 $ 307 $ 440 Research and development (1) 3,434 2,151 3,339 Selling, general and administrative 10,118 7,755 8,722 Total stock-based compensation $ 13,965 $ 10,213 $ 12,501 (1) Includes stock-based compensation expense of $ 627,000 during the year ended December 31, 2023 related to a repurchase of common shares from one employee, as described below. As of December 31, 2025, total unrecognized stock-based compensation costs related to unvested stock options was $ 30.5 million, which is expected to be recognized over a remaining weighted-average period of 3.17 years , a total of $ 17.7 million of unrecognized compensation costs related to unvested RSUs is expected to be recognized over a period of approximately 3.72 years, and $ 762,000 of unrecognized compensation costs related to the ESPP is expected to be recognized over 0.18 years. In January 2023, the fair value of the Company’s common stock declined from $ 41.67 to $ 2.22 per share, prompting the Company to reduce the exercise price of certain stock options to $ 2.22 , effective July 10, 2023. No other changes to the stock options’ terms were made. The Company calculated the incremental fair value by calculating the fair value of the award immediately before and immediately after the modification. The fair value of the award immediately before the repricing is based on assumptions (including volatility, expected term and risk free interest rate) that reflect the facts and circumstances on the modification date and therefore, differ from the fair value calculated on the grant date. The average additional compensation per award from the modification was $ 0.09 and the aggregate incremental expense was $ 649,000 , of which $ 340,000 was immediately recognized on the modification date and the remaining amount is recognized over the options’ remaining requisite service period. In March 2023, the Board of Directors approved a repurchase of 102,739 common shares from an employee of the Company at a purchase price of $ 8.32 per share for total consideration of $ 855,000 . The fair value of the repurchased common shares was $ 228,000 , and the difference between the repurchase price and fair value of the common shares of $ 627,000 was recorded as stock-based compensation expense within research and development expense in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2023. 15. Employee Retirement Plan The Company has a qualified retirement plan under section 401(k) of the IRC under which participants may contribute up to 100 % of their eligible compensation, subject to maximum deferral limits specified by the IRC. The Company may make matching contributions of up to 4.0 % of an employee’s eligible compensation, subject to conditions specified by the IRC. During the years ended December 31, 2025, 2024 and 2023, the Company’s matching contributions totaled $ 2.0 million, $ 1.5 million and $ 1.4 million, respectively. ‎ 124 Table of Contents 16. Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share amounts): Year Ended December 31, 2025 2024 2023 Numerator: Net loss $ ( 116,791 ) $ ( 96,426 ) $ ( 95,655 ) Cumulative dividends on Series C redeemable convertible preferred stock — — ( 1,239 ) Deemed dividend upon down round of redeemable convertible preferred stock — — ( 26,794 ) Net loss attributable to common stockholders $ ( 116,791 ) $ ( 96,426 ) $ ( 123,688 ) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 36,853,867 5,363,435 4,885,231 Net loss per share attributable to common stockholders, basic and diluted $ ( 3.17 ) $ ( 17.98 ) $ ( 25.32 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: December 31, 2025 2024 2023 Redeemable convertible preferred stock — 122,231,454 122,231,454 Outstanding options to purchase common stock 10,003,254 8,537,203 8,268,314 Restricted stock units 907,703 — — Estimated ESPP 231,558 — — Common stock warrants — 1,647,667 1,647,667 11,142,515 132,416,324 132,147,435 17. Income Taxes The components of net loss before income taxes are as follows (in thousands): Year Ended December 31, 2025 2024 2023 United States $ ( 110,784 ) $ ( 96,422 ) $ ( 95,634 ) Foreign ( 6,083 ) 49 526 Net loss before income taxes $ ( 116,867 ) $ ( 96,373 ) $ ( 95,108 ) For the years ended December 31, 2025, 2024 and 2023, the Company did no t record any federal or state provision for income tax expense. For the years ended December 31, 2025, 2024 and 2023, the Company recorded an income tax (provision) benefit of $ 76,000 , $( 53,000 ) and $( 547,000 ), respectively, from foreign jurisdictions. As described in Note 2, Summary of Significant Accounting Policies, the Company has elected to prospectively adopt ASU 2023-09. The following table is a reconciliation of the total income tax expense computed at the U.S. federal statutory rate of 21 % to the Company’s total income tax expense for the year ended December 31, 2025, in accordance with ASU 2023-09 (in thousands): ‎ 125 Table of Contents Year Ended December 31, 2025 Amount Percentage U.S. federal statutory rate $ ( 24,542 ) 21.0 % Foreign tax effects 1,201 - 1.0 % Tax credits: R&D credits ( 382 ) 0.3 % Change in valuation allowance 6,316 - 5.4 % Nontaxable or nondeductible items: Write-off of intercompany payable 4,759 - 4.1 % Mark-to-market on warrant and derivative 7,683 - 6.5 % Nondeductible executive compensation 1,239 - 1.1 % Other nondeductible items 2,621 - 2.2 % Other 1,029 - 0.9 % Provision for income taxes $ ( 76 ) 0.1 % The following table presents a reconciliation of the statutory federal rate and the Company’s effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to ASU 2023-09 (in thousands): Year Ended December 31, 2024 2023 Tax at federal statutory rate $ ( 20,027 ) $ ( 20,003 ) State taxes, net of federal benefit ( 2,247 ) ( 4,032 ) Change in valuation allowance 16,563 20,418 Stock-based compensation 1,706 3,722 Mark-to-market on warrant and derivative 3,482 1,075 R&D credits ( 281 ) ( 391 ) Foreign rate differential 41 ( 50 ) Other 816 ( 192 ) Provision for income taxes $ 53 $ 547 Significant components of the net deferred tax assets for federal and state income taxes are as follows (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 154,356 $ 143,066 Research and development credits 7,628 7,111 Stock-based compensation 1,586 1,611 Interest limitation 10,651 8,964 Accruals and reserves 5,370 9,502 Fixed asset and intangible asset basis 3,654 4,615 Operating lease liabilities 5,386 5,955 Research and development capitalization 15,408 20,675 Total deferred tax assets 204,039 201,499 Deferred tax liabilities: Capitalized contract costs ( 2,704 ) ( 1,556 ) Operating lease right-of-use assets ( 4,256 ) ( 4,653 ) Other ( 109 ) ( 66 ) Total deferred tax liabilities ( 7,069 ) ( 6,275 ) Deferred tax assets, net 196,970 195,224 Valuation allowance ( 196,784 ) ( 195,224 ) Net deferred taxes $ 186 $ — As the Company has incurred annual net operating losses since inception, a full valuation allowance is provided against U.S. net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets. The 126 Table of Contents U.S. valuation allowance increased by $ 1.6 million, $ 16.8 million and $ 20.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The following table summarizes the activity related to the valuation allowance for deferred tax assets as follows (in thousands): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 195,224 $ 178,406 $ 157,982 Additions 5,346 16,818 20,424 Deductions ( 3,786 ) — — Balance at end of period $ 196,784 $ 195,224 $ 178,406 As of December 31, 2025, the Company had net operating loss carryforwards of approximately $ 609.9 million and $ 467 .4 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. Of these amounts, $ 422.9 million of federal net operating losses are carried forward indefinitely, and are limited to offset 80% of future taxable income. The remaining federal net operating losses will expire starting in 2030. State net operating losses will expire starting in 2026. Utilization of net operating loss carryforwards may be subject to an annual limitation in certain situations where changes occur in the stock ownership of a company. A Section 382 study of the Company’s historic ownership changes through December 31, 2025 was completed, and the Company determined that certain loss and credit carryforwards are subject to annual limitations under Section 382. The majority of the Company’s tax attributes are expected to be fully available and no longer subject to these annual limitations by 2029, and no tax attributes were identified as being permanently disallowed as a result of Section 382. The Company also had federal and California research and development credit carryforwards of approximately $ 10.2 million and $ 7.4 million, respectively, as of December 31, 2025. The federal credits will expire starting in 2030 , if not utilized. The California credits have no expiration date. Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active foreign operations. The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs. The Company has no t recorded a deferred tax liability on the undistributed earnings of non-U.S. subsidiaries. The foreign withholding taxes would not have a material impact on the Company’s financial position and results of operation. As of December 31, 2025, 2024 and 2023, the Company had $ 1.1 million. $ 1.1 million and $ 0.6 million, respectively, in unremitted earnings that were indefinitely reinvested related to its consolidated foreign subsidiaries. The Company’s gross unrecognized tax benefits as of December 31, 2025, 2024 and 2023 was $ 9.2 million, $ 8.6 million and $ 8.2 million, respectively, all of which would affect the Company’s income tax expense if recognized before consideration of the Company’s valuation allowance. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of provision for income taxes, in which none was incurred during the years ended December 31, 2025, 2024 and 2023. The following table summarizes the activity related to unrecognized tax benefits as follows (in thousands): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 8,597 $ 8,188 $ 7,371 Increase related to current year tax positions 552 558 817 Changes related to prior tax positions 75 ( 149 ) — Balance at end of period $ 9,224 $ 8,597 $ 8,188 The Company did no t pay any income taxes during the year ended December 31, 2025. The cash paid (refunded) for income taxes during the years ended December 31, 2024 and 2023 was $( 72,000 ) and $ 405,000 , respectively. The Company files income tax returns in the U.S. federal jurisdiction, various state and certain foreign jurisdictions. In the normal course of business, the Company is subject to examination by their respective taxing authorities. The Company had been selected for audit by the Internal Revenue Service for its 2022 tax year. The examination was 127 Table of Contents closed during 2025 with no tax adjustments. The statute of limitations remains effectively open for the U.S. federal and state tax jurisdictions for all tax years from 2010 through 2025 . Tax years outside the normal statute of limitations remain open to examination by tax authorities due to tax attributes generated in earlier years which have been carried forward and may be examined and adjusted in subsequent years when utilized. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States which contains a broad range of tax reform provisions affecting businesses. The provisions of the OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025. 18. Subsequent Events 2026 Facility Lease Amendment On January 5, 2026, the Company amended the lease for its Austin, Texas facility to extend the lease term an additional 51 months through March 2027, with the option to extend for two additional three-year periods. The monthly lease payments are approximately $ 61,000 per month during the amended extension period and provides for a tenant improvement allowance of $ 71,000 . 2026 Mountain View, California Facility Sublease On March 10, 2026, the Company entered into a sublease agreement (the “Sublease”) with a third-party subtenant to sublease its Mountain View, California facility. The initial term of the Sublease will commence in April 2026 and continues until August 2030, consistent with the remaining term of the Company’s Master Lease, with 52 % occupancy of the facility beginning April 2026 and full occupancy by March 2027. The Sublease provides for an initial annual base rent of approximately $ 1.2 million, which increases annually up to a maximum annual base rent of approximately $ 2.4 million. The subtenant is obligated to pay its ratable portion of operating costs, annual tax costs and all utility costs attributable to the facility during the term of the Sublease. The subtenant will provide the Company with a letter of credit in the amount of $ 0.8 million in place of a security deposit. The Company is currently evaluating the impact of this Sublease on the carrying value of the associated ROU asset and leasehold improvements. Grant of Equity Awards Subsequent to December 31, 2025, the Company granted options for 913,696 shares of common stock, subject to service-based vesting conditions, with an exercise price of $ 27.74 per share to employees and 1,019,499 shares of restricted stock units subject to service-based vesting conditions. ‎ 128 Table of Contents I tem 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.