MYRIAD GENETICS INC 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA MYRIAD GENETICS, INC. Index to Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 75 Consolidated Balance Sheets as of December 31, 2024 and 2023 77 Consolidated Statements of Operations for the Years Ended December 31, 2024 , 2023 and 2022 78 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2024 , 2023 and 2022 79 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2024 , 2023 and 2022 80 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 , 2023 and 2022 81 Notes to Consolidated Financial Statements 82 74 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Myriad Genetics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Myriad Genetics, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and 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 at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the 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 in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Measurement of revenue Description of the Matter During the year ended December 31, 2024, the Company’s revenue was $837.6 million. As discussed in Note 1 of the consolidated financial statements, management estimates the expected amount of consideration to be received as revenue and revenue is recognized when the performance obligation is complete. Auditing the measurement of the Company’s revenue was complex and judgmental due to the significant estimation required in determining the amount that will be collected for each test. In particular, the estimate of revenue is affected by assumptions related to payors such as changes in payor mix, historical and current payment trends and other changes in payor behavior. 75 Table of Contents How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls that address the risks of material misstatement relating to the measurement of revenue related to tests performed. Our procedures included testing controls over management’s review of the significant assumptions and inputs used in calculating the estimated amounts to be collected for tests performed. We also tested controls used by management to evaluate the current and historical data used in making the estimates for completeness and accuracy. Our audit procedures over the Company’s revenue included, among others, assessing the methodologies used to estimate consideration expected to be received for tests performed and testing the significant assumptions and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to third-party payor collection trends and other relevant factors. We assessed the reasonableness of adjustments to estimates of future cash collections as a result of changes in historical and current collection trends and changes in payor behavior. Additionally, we tested management’s supporting calculations. We also performed an evaluation of actual cash collections versus expectations to assess the accuracy of estimates made in prior periods. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2006. Salt Lake City, Utah February 28, 2025 76 Table of Contents MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in millions, except per share amounts) December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 102.4 $ 132.1 Marketable investment securities — 8.8 Trade accounts receivable 121.2 114.3 Inventory 27.5 22.0 Prepaid taxes 16.4 17.0 Prepaid expenses and other current assets 30.5 19.4 Total current assets 298.0 313.6 Operating lease right-of-use assets 55.0 61.6 Property, plant and equipment, net 117.4 119.0 Intangibles, net 262.4 349.5 Goodwill 286.3 287.4 Other assets 8.5 15.4 Total assets $ 1,027.6 $ 1,146.5 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 32.3 $ 25.8 Accrued liabilities 119.0 113.9 Current maturities of operating lease liabilities 12.8 16.2 Total current liabilities 164.1 155.9 Unrecognized tax benefits 32.7 30.2 Long-term debt 39.6 38.5 Noncurrent operating lease liabilities 87.9 97.4 Other long-term liabilities 2.2 41.3 Total liabilities 326.5 363.3 Commitments and contingencies Stockholders’ equity: Common stock, $ 0.01 par value, 91.3 and 89.9 shares outstanding at December 31, 2024 and 2023, respectively 0.9 0.9 Additional paid-in capital 1,457.8 1,415.5 Accumulated other comprehensive loss ( 0.8 ) ( 3.7 ) Accumulated deficit ( 756.8 ) ( 629.5 ) Total stockholders' equity 701.1 783.2 Total liabilities and stockholders’ equity $ 1,027.6 $ 1,146.5 See accompanying notes to consolidated financial statements. 77 Table of Contents MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in millions, except per share amounts) Years Ended December 31, 2024 2023 2022 Revenue $ 837.6 $ 753.2 $ 678.4 Cost of revenue 252.2 236.2 202.0 Gross profit 585.4 517.0 476.4 Operating expenses: Research and development expense 113.4 88.7 85.4 Sales and marketing expense 284.1 289.2 266.8 General and administrative expense 275.9 283.7 247.9 Legal settlements ( 21.3 ) 112.8 — Goodwill and long-lived asset impairment charges 56.8 — 16.9 Total operating expenses 708.9 774.4 617.0 Operating loss ( 123.5 ) ( 257.4 ) ( 140.6 ) Other income (expense): Interest income 1.7 2.5 2.6 Interest expense ( 2.8 ) ( 2.9 ) ( 3.2 ) Other 1.1 ( 4.4 ) 0.6 Total other expense — ( 4.8 ) — Loss before income tax ( 123.5 ) ( 262.2 ) ( 140.6 ) Income tax expense (benefit) 3.8 1.1 ( 28.6 ) Net loss $ ( 127.3 ) $ ( 263.3 ) $ ( 112.0 ) Net loss per share: Basic and diluted $ ( 1.41 ) $ ( 3.18 ) $ ( 1.39 ) Weighted average shares outstanding: Basic and diluted 90.6 82.8 80.6 See accompanying notes to consolidated financial statements. 78 Table of Contents MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Loss (in millions) Years Ended December 31, 2024 2023 2022 Net loss attributable to Myriad Genetics, Inc. stockholders $ ( 127.3 ) $ ( 263.3 ) $ ( 112.0 ) Change in unrealized loss on available-for-sale debt securities, net of tax 0.1 1.2 ( 2.5 ) Change in foreign currency translation adjustment, net of tax ( 3.0 ) 2.1 ( 1.3 ) Reclassification adjustments for losses included in net loss, net of tax — 1.5 — Reclassification of cumulative translation adjustment to income upon sale or liquidation of certain foreign entities, net of tax 5.8 0.4 — Comprehensive loss $ ( 124.4 ) $ ( 258.1 ) $ ( 115.8 ) See accompanying notes to consolidated financial statements. 79 Table of Contents MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders’ Equity (in millions) Common stock Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Myriad Genetics, Inc. Stockholders’ equity BALANCES AT DECEMBER 31, 2021 $ 0.8 $ 1,226.3 $ ( 5.1 ) $ ( 254.2 ) $ 967.8 Issuance of common stock under stock-based compensation plans, net of shares exchanged for withholding tax — ( 4.3 ) — — ( 4.3 ) Stock-based compensation expense — 38.1 — — 38.1 Net loss — — — ( 112.0 ) ( 112.0 ) Other comprehensive loss, net of tax — — ( 3.8 ) — ( 3.8 ) BALANCES AT DECEMBER 31, 2022 $ 0.8 $ 1,260.1 $ ( 8.9 ) $ ( 366.2 ) $ 885.8 Issuance of common stock under stock-based compensation plans, net of shares exchanged for withholding tax — ( 2.8 ) — — ( 2.8 ) Issuance of common stock for public offering, net 0.1 117.5 — — 117.6 Stock-based compensation expense — 40.7 — — 40.7 Net loss — — — ( 263.3 ) ( 263.3 ) Other comprehensive income, net of tax — — 5.2 — 5.2 BALANCES AT DECEMBER 31, 2023 $ 0.9 $ 1,415.5 $ ( 3.7 ) $ ( 629.5 ) $ 783.2 Issuance of common stock under stock-based compensation plans, net of shares exchanged for withholding tax — ( 7.5 ) — — ( 7.5 ) Stock-based compensation expense — 49.8 — — 49.8 Net loss — — — ( 127.3 ) ( 127.3 ) Other comprehensive income, net of tax — — 2.9 — 2.9 BALANCES AT DECEMBER 31, 2024 $ 0.9 $ 1,457.8 $ ( 0.8 ) $ ( 756.8 ) $ 701.1 See accompanying notes to consolidated financial statements. 80 Table of Contents MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in millions) Years Ended December 31, 2024 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 127.3 ) $ ( 263.3 ) $ ( 112.0 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 61.2 61.9 52.7 Non-cash lease expense 9.5 11.3 11.7 Stock-based compensation expense 49.8 40.7 38.1 Deferred income taxes ( 2.8 ) ( 4.0 ) ( 30.8 ) Unrecognized tax benefits 2.5 3.4 ( 1.1 ) Impairment of goodwill and long-lived assets 56.6 — 16.9 (Gain) loss on termination of lease ( 3.1 ) 7.7 — Gain on acquisition ( 2.2 ) — — Other non-cash adjustments 1.5 4.4 1.7 Changes in assets and liabilities: Prepaid expenses and other current assets ( 3.7 ) 0.2 1.6 Trade accounts receivable ( 8.7 ) ( 12.5 ) ( 10.3 ) Inventory ( 6.2 ) ( 1.8 ) ( 2.9 ) Prepaid taxes 0.5 0.7 0.7 Other assets — 0.6 ( 0.9 ) Tenant improvement allowance received — 16.3 18.0 Accounts payable 4.7 ( 3.7 ) ( 3.5 ) Accrued liabilities ( 41.0 ) 27.2 ( 86.2 ) Net cash used in operating activities ( 8.7 ) ( 110.9 ) ( 106.3 ) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 19.0 ) ( 63.2 ) ( 45.3 ) Capitalization of internal-use software costs ( 10.7 ) ( 10.1 ) — Proceeds from the sale of business, net cash sold 8.8 — — Acquisitions, net of cash acquired — — ( 57.2 ) Purchases of marketable investment securities — — ( 103.2 ) Proceeds from maturities and sales of marketable investment securities 9.0 105.2 128.2 Net cash provided by (used in) investing activities ( 11.9 ) 31.9 ( 77.5 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from common stock issued under stock-based compensation plans 5.9 6.0 6.3 Payment of contingent consideration recognized at acquisition — — ( 3.0 ) Payment of tax withheld for common stock issued under stock-based compensation plans ( 13.4 ) ( 8.8 ) ( 10.6 ) Proceeds from underwritten public offering, net of costs and discounts — 117.6 — Proceeds from revolving credit facility 120.0 80.0 — Repayment of revolving credit facility ( 119.5 ) ( 40.0 ) — Fees associated with issuance and refinancing of revolving credit facility — ( 1.7 ) ( 0.7 ) Payment on finance leases ( 0.4 ) ( 0.2 ) — Net cash provided by (used in) financing activities ( 7.4 ) 152.9 ( 8.0 ) Effect of foreign exchange rates on cash, cash equivalents, and restricted cash ( 1.0 ) 0.6 ( 0.6 ) Net increase (decrease) in cash, cash equivalents, and restricted cash ( 29.0 ) 74.5 ( 192.4 ) Cash, cash equivalents, and restricted cash at beginning of the period 140.9 66.4 258.8 Cash, cash equivalents, and restricted cash at end of the period $ 111.9 $ 140.9 $ 66.4 See accompanying notes to the consolidated financial statements. 81 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Financial Statement Presentation Myriad Genetics, Inc. (together with its subsidiaries, the "Company" or "Myriad") is a leading molecular diagnostic testing and precision medicine company dedicated to advancing health and well-being for all. Myriad develops and offers molecular tests that help assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where molecular insights can significantly improve patient care and lower health care costs. Myriad provides insights that help people take control of their health and enable healthcare providers to better detect, treat, and prevent disease. The Company’s principal executive office is located in Salt Lake City, Utah. The accompanying consolidated financial statements for the Company have been prepared in accordance with United States ("U.S.") generally accepted accounting principles (“GAAP”) for financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly all financial statements in accordance with GAAP. Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue recognition estimates for the average expected reimbursement per test, valuation allowances for deferred income tax assets, our incremental borrowing rates used to calculate our lease balances, stock-based compensation, purchase accounting, and impairment analysis of goodwill and long-lived assets. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform with the current period presentation. The reclassifications have no impact on the total assets, total liabilities, stockholders' equity, or cash flows from operations. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company limits its exposure to loss by placing its cash in financial institutions with high credit ratings. The Company's cash consists of deposits held with banks that generally exceed federally insured limits of $250,000 per customer. Substantially all of the Company’s accounts receivable are with companies in the healthcare industry, U.S. and state governmental agencies, and individuals. The Company does not believe that receivables due from U.S. and state governmental agencies, such as Medicare, represent a credit risk since the related health care programs are funded by the U.S. and state governments. The Company does not require collateral from its customers. The Company only has one payor, Medicare, that represents greater than 10% of its revenues. Revenues received from Medicare represented approximately 12 %, 12 %, and 14 % of total revenue for the years ended December 31, 2024, 2023, and 2022, respectively. Concentrations of credit risk are mitigated due to the number of the Company’s customers as well as their dispersion across many geographic regions. The Company has only one payor that accounted for more than 10% of accounts receivable at December 31, 2024 and 2023. The balance of accounts receivable from the payor represented 18 % and 12 % of the total accounts receivable balance as of December 31, 2024 and 2023, respectively. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents primarily consist of cash and money market deposits with financial institutions. 82 Table of Contents Restricted Cash In certain circumstances, the Company is required to maintain cash deposits with certain banks with respect to contractual or other legal obligations, and therefore the use of these cash deposits for general operational purposes is restricted. As of December 31, 2024, restricted cash was approximately $ 9.5 million, of which $ 8.6 million was recognized as a current asset and $ 0.9 million was recognized as a long-term asset. As of December 31, 2023, restricted cash was approximately $ 8.8 million, of which $ 1.2 million was recognized as a current asset and $ 7.6 million was recognized as a long-term asset. The restricted cash amounts are largely comprised of cash held in escrow related to the Company's acquisition of Gateway Genomics, LLC ("Gateway"), which occurred during the year ended December 31, 2022. The current and long-term portions of restricted cash are included in Prepaid expenses and other current assets and Other assets, respectively, on the Consolidated Balance Sheets. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets that agrees to the amounts included in the Consolidated Statement of Cash Flows. December 31, (in millions) 2024 2023 2022 Cash and cash equivalents $ 102.4 $ 132.1 $ 56.9 Restricted cash 9.5 8.8 9.5 Total cash, cash equivalents, and restricted cash $ 111.9 $ 140.9 $ 66.4 Marketable Investment Securities The Company has classified its marketable investment securities, all of which are debt securities, as available-for-sale securities. These securities are carried at estimated fair value with unrealized holding gains and losses, net of the related tax effect, included in Accumulated other comprehensive loss in Stockholders’ equity until realized. Gains and losses on investment security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. The Company’s cash equivalents consist of short-term, highly liquid investments that are readily convertible to known amounts of cash. A decline in the market value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security. Losses are charged against Other income (expense) when a decline in fair value is determined to be other than temporary. The Company reviews several factors to determine whether a loss is other than temporary. These factors include but are not limited to: (i) the extent to which the fair value is less than cost and the cause for the fair value decline, (ii) the financial condition and near term prospects of the issuer, (iii) the length of time a security is in an unrealized loss position and (iv) the Company’s ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There were no other-than-temporary impairments recognized during the years ended December 31, 2024, 2023, and 2022. Inventory Inventories consist of supplies such as reagents, plates, and testing kits, which are consumed when providing test results, and therefore the Company does not maintain finished goods inventory. Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost on a first-in first-out basis. The Company evaluates its inventories for excess quantities and obsolescence. Inventories that are considered excess or obsolete are expensed. In order to assess the ultimate realization of inventories, the Company is required to make judgments as to future demand requirements compared to current or committed inventory levels. Trade Accounts Receivable Trade accounts receivable represents estimated receivables from customers for revenue recognized related to the Company's tests. The Company does not have any off-balance-sheet credit exposure related to its customers and does not require collateral. 83 Table of Contents Property, Plant and Equipment Equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation and amortization are computed using the straight-line method based on the lesser of estimated useful lives of the related assets or lease terms. Equipment items have depreciable lives of five to seven years . Leasehold improvements are depreciated over the shorter of the estimated useful lives or the associated lease terms, which range from four to 14 years. Repairs and maintenance costs are charged to expense as incurred. Leases The Company acts as the lessee in its lease agreements, which primarily include operating leases for corporate offices, laboratory space, warehouse space, and certain laboratory and office equipment. The Company determines whether an arrangement is, or contains, a lease at inception and whether the lease should be classified as a finance or operating lease. For all leases, the Company records the present value of lease payments as right-of-use (“ROU”) assets and lease liabilities on the Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of lease liabilities as either current or non-current is based on the expected timing of payments due under the Company’s obligations. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The leases have remaining lease terms of one year to 14 years, some of which include options to extend the lease term for up to 10 years. The Company has taken advantage of certain practical expedients offered to registrants at adoption of Accounting Standards Codification ("ASC") 842, Leases . Lease expense for leases with a term of 12 months or less is recognized on a straight-line basis and is not included in the recognized ROU assets and lease liabilities. Further, as a practical expedient, all lease contracts are accounted for as one single lease component, as opposed to separating lease and non-lease components to allocate the consideration within a single lease contract. Operating leases are included in Operating lease right-of-use assets, Current maturities of operating lease liabilities, and Noncurrent operating lease liabilities in the Consolidated Balance Sheets. Finance leases are included in Other assets, Accrued liabilities, and Other long-term liabilities in the Consolidated Balance Sheets. Intangible Assets Intangible assets are comprised of acquired licenses and technology. Acquired intangible assets are recorded at fair value and amortized over the shorter of the contractual life or the estimated useful life. The Company capitalizes certain costs incurred to develop internal-use software. Implementation and development costs for internal-use software are capitalized as part of Intangible Assets in the Consolidated Balance Sheets. After the implementation of the internal-use software, the capitalized costs are amortized on a straight-line basis over the estimated useful life of the asset. Costs incurred during the post implementation stage of the project are expensed as incurred. As of December 31, 2024 and 2023, the Company had unamortized internal-use software costs of $ 22.7 million and $ 11.9 million, respectively. For the years ended December 31, 2024, 2023, and 2022 amortization expense for these capitalized software costs was insignificant. 84 Table of Contents Other Long-Lived Assets The Company continually reviews and monitors long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such indicators are present, the Company performs a recoverability test by comparing the estimated undiscounted future cash flows expected to be generated by the asset or asset group to its carrying amount. If the carrying amount of an asset or asset group exceeds its estimated future undiscounted cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset or asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company capitalizes certain implementation costs incurred in cloud computing arrangements and hosting arrangements. The Company's cloud computing arrangements or hosting arrangements are primarily service contracts related to information technology. Implementation and development costs for cloud computing arrangements or hosting arrangements are capitalized as part of Other assets in the Consolidated Balance Sheets. As of December 31, 2024 and 2023, the Company had unamortized cloud computing arrangements or hosting arrangements of $ 3.4 million and $ 4.6 million, respectively, within Other assets. For the years ended December 31, 2024, 2023, and 2022, amortization expense for these capitalized amounts was insignificant. Goodwill Goodwill is tested for impairment by reporting unit on an annual basis as of October 1 and in the interim if events and circumstances indicate that goodwill may be impaired. The events and circumstances that are considered include business climate and market conditions, legal factors, operating performance indicators, and competition. Impairment of goodwill is first assessed using a qualitative approach. If the qualitative assessment suggests that impairment is more likely than not, a quantitative analysis is performed. The quantitative analysis involves a comparison of the fair value of the reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. If an event occurs that would cause a revision to the estimates and assumptions used in analyzing the value of the goodwill, the revision could result in a non-cash impairment charge that could have a material impact on the financial results. Business Acquisitions/Divestitures The Company accounts for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on third-party valuations that use information and assumptions provided by the Company's management, which consider the Company's estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. To the extent the fair value of the net assets and liabilities acquired exceeds the purchase price, a gain is recognized. In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity , the Company recognizes a liability equal to the fair value of the contingent payments expected to be made as of the acquisition date. This liability is remeasured each reporting period and the changes in the fair value are recognized in General and administrative expenses in the Consolidated Statements of Operations. The Company evaluates its portfolio of businesses on an ongoing basis to ensure alignment with its strategic objectives and to enhance shareholder value. From time to time, the Company may divest certain businesses, product lines, or other non-core assets. Gains or losses from the sale of businesses or assets are included in Goodwill and long-lived asset impairment charges on the Company’s Consolidated Statements of Operations. See Note 16 for further information. Transaction costs associated with acquisitions are expensed as incurred in General and administrative expenses in the Consolidated Statements of Operations. Results of operations and cash flows of acquired companies are included in the operating results from the date of acquisition. 85 Table of Contents Revenue Recognition The Company primarily generates revenue by performing molecular testing, primarily derived from the following categories of products: Hereditary Cancer (MyRisk and BRACAnalysis CDx), Tumor Profiling (MyChoice CDx, Prolaris, Precise Tumor, and EndoPredict), Prenatal (Foresight, Prequel, and SneakPeek), and Pharmacogenomics (GeneSight). Revenue is recorded at the estimated transaction price. Control is transferred, and revenue is recognized, once test results are released to the healthcare provider and/or patient. The following table presents detail regarding the composition of the Company’s total revenue by product type for the years ended December 31, 2024, 2023, and 2022: Years Ended December 31, (In millions) 2024 2023 2022 Hereditary Cancer $ 364.5 $ 327.8 $ 305.5 Tumor Profiling 125.8 135.6 128.6 Prenatal 177.1 151.3 116.4 Pharmacogenomics 170.2 138.5 127.6 Autoimmune — — 0.3 Total revenue $ 837.6 $ 753.2 $ 678.4 In addition, the following tables reconcile revenue by geographical region, either U.S. or rest of world ("RoW"), to total revenue: Years Ended December 31, 2024 2023 2022 (in millions) U.S. RoW Total U.S. RoW Total U.S. RoW Total Hereditary Cancer $ 318.6 $ 45.9 $ 364.5 $ 280.5 $ 47.3 $ 327.8 $ 263.5 $ 42.0 $ 305.5 Tumor Profiling 104.2 21.6 125.8 102.1 33.5 135.6 84.5 44.1 128.6 Prenatal 176.5 0.6 177.1 150.6 0.7 151.3 115.6 0.8 116.4 Pharmacogenomics 170.2 — 170.2 138.5 — 138.5 127.6 — 127.6 Autoimmune — — — — — — 0.3 — 0.3 Total revenue $ 769.5 $ 68.1 $ 837.6 $ 671.7 $ 81.5 $ 753.2 $ 591.5 $ 86.9 $ 678.4 Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company performs its obligation under a contract with a customer by processing tests and releasing the test results to customers, in exchange for consideration from the customer. The Company has the right to bill its customers upon the completion of performance obligations and thus does not record contract assets. In accordance with ASC 606, the Company has elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its contracts that are one year or less, as the revenue is expected to be recognized within the next year. Furthermore, the Company has elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its agreements wherein the Company’s right to payment is in an amount that directly corresponds with the value of the Company’s performance to date. In determining the transaction price, the Company includes an estimate of the expected amount of consideration to be received. The Company applies this method consistently for similar contracts when estimating the effect of any uncertainty on an amount of variable consideration to which it will be entitled. An estimate of transaction price does not include any estimated amount of variable consideration that is constrained. In addition, the Company considers all the information (historical, current, and forecast) that is reasonably available to identify possible consideration amounts. The Company also has significant experience with historical discount patterns and uses this experience to estimate transaction prices. 86 Table of Contents The estimate of revenue is affected by, among other factors, assumptions for changes in payor mix, payor collections, current customer contractual requirements, experience with collections from third-party payors, and changes in medical policies. When assessing the total consideration for insurance carriers and patients, revenues are further constrained for estimated refunds. The Company reserves certain amounts in Accrued liabilities in the Consolidated Balance Sheets in anticipation of requests for refunds of payments made previously by insurance carriers, which are accounted for as reductions in revenue in the Consolidated Statements of Operations and Comprehensive Loss. Cash collections for certain tests delivered may differ from rates estimated due to changes in the estimated transaction price for contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligation was met, settlements with third-party payors, or as a result of third-party payors disputing our bills or denying payment for tests that we have performed, among other reasons. As a result of this new information, the Company updates its estimate of the amounts to be recognized for previously delivered tests. The Company recognized $ 18.5 million, $ 7.2 million, and $ 22.1 million for the years ended December 31, 2024, 2023, and 2022, respectively, for tests in which the performance obligation of delivering the test results was met in prior periods. The changes for all periods presented were primarily driven by changes in the estimated transaction price. Additionally, for the year ended December 31, 2024, the Company recognized $ 3.0 million in revenue due to a retroactive coverage change by a payor for one of the Company's prenatal products. In accordance with ASC 606, the Company has elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer for sales tax, value added tax, and certain other taxes. The Company applies the practical expedient related to costs to obtain or fulfill a contract since the amortization period for such costs will be one year or less. Accordingly, no costs incurred to obtain or fulfill a contract have been capitalized. Advertising Costs The Company expenses advertising costs as incurred. The Company incurred advertising costs of $ 10.3 million, $ 8.5 million, and $ 5.3 million for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively. Stock-based Payment Expense We recognize the fair value compensation cost relating to stock-based payment transactions in accordance with ASC 718, Compensation – Stock Compensation ("ASC 718"). Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized over the employee’s requisite service period, which is generally the vesting period. Compensation cost for awards with only service conditions are recognized on a straight-line basis over the requisite service period. The fair value of restricted stock units ("RSUs") and performance restricted stock units ("PSUs") that do not have market conditions is based on the number of shares granted and the quoted price of the Company’s common stock on the grant date. The fair value of PSU awards that have market conditions is determined using the Monte Carlo Method. For PSUs, t he Company estimates the likelihood of achievement of the performance conditions at the end of each period. Forfeitures are recognized as a reduction of compensation expense in earnings in the period in which they occur. The fair value of shares issued under the Company's Employee Stock Purchase Plan is calculated using the Black-Scholes option-pricing model, based on assumptions including the risk-free interest rate, expected life, expected dividend yield and expected volatility. The average risk-free interest rate is determined using the U.S. Treasury rate. We determine the expected life based on the offering period of the Employee Stock Purchase Plan. The expected volatility is determined using the weighted average of daily historical volatility of the price of the Company's common stock. Income Taxes The Company recognizes income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The provision for income taxes, including the effective tax rate and analysis of potential tax exposure items requires significant judgment and expertise in federal, state, and foreign income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and any estimated valuation allowances deemed necessary to recognize deferred tax assets at an amount that is more likely than not to be realized. The Company’s filings, including the positions taken therein, are subject to audit by various taxing authorities. While the Company believes it has provided adequately for its income tax liabilities in the Consolidated Financial Statements, adverse determinations by these taxing authorities could have a material adverse effect on the Company's consolidated financial condition, results of operations, or cash flows. 87 Table of Contents Earnings Per Share Basic earnings per share ("EPS") is computed based on the weighted-average number of shares of common stock outstanding. Diluted earnings per share is computed based on the weighted-average number of shares of common stock, including the dilutive effect of common stock equivalents, outstanding. The following is a reconciliation of the denominators of the basic and diluted earnings per share computations: Years Ended December 31, (in millions) 2024 2023 2022 Denominator: Weighted-average shares outstanding used to compute basic EPS 90.6 82.8 80.6 Effect of dilutive stock options and RSUs — — — Weighted-average shares outstanding and dilutive securities used to compute diluted EPS 90.6 82.8 80.6 Certain outstanding options and RSUs were excluded from the computation of diluted earnings per share because the effect would have been anti-dilutive. These potential dilutive shares of common stock, which may be dilutive to future diluted earnings per share, are as follows: Years Ended December 31, (in millions) 2024 2023 2022 Anti-dilutive options and RSUs excluded from EPS computation 6.0 5.1 4.4 Foreign Currency The functional currency of the Company’s international subsidiaries is the local currency. For those subsidiaries, expenses denominated in the functional currency are translated into U.S. dollars using average exchange rates in effect during the period and assets and liabilities are translated using period-end exchange rates. The foreign currency translation adjustments are included in Accumulated other comprehensive loss as a separate component of Stockholders’ equity. The following table shows the cumulative translation adjustments included in Accumulated other comprehensive loss (in millions): Ending balance December 31, 2023 $ ( 3.7 ) Period translation adjustments ( 3.0 ) Reclassification of cumulative translation adjustment to income upon sale or liquidation of certain foreign entities, net of tax 5.9 Ending balance December 31, 2024 $ ( 0.8 ) During the years ended December 31, 2024 and 2023, the Company recognized losses related to foreign currency of $ 1.1 million and $ 3.4 million, respectively, which is included in Other in the Consolidated Statements of Operations. Recent Accounting Pronouncements Recently Adopted Standards In November 2023, the Financial Accounting Standards Board ("FASB") issued accounting standards update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements. ASU 2023-07 is effective for the Company for annual reporting periods beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. The Company has adopted the required disclosures effective for the year ended December 31, 2024. The Company has identified consolidated net income (loss) as the measure of segment profitability. The significant expenses presented to the chief operating decision maker ("CODM") are at the same level as presented in Consolidated Statement Operations in these financial statements. 88 Table of Contents Standards Effective in Future Years and Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires enhanced income tax disclosures, including disaggregation of information on the rate reconciliation table and disaggregated information related to income taxes paid. The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of ASU 2023-09 on its income tax disclosures. 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 , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. 2. MARKETABLE INVESTMENT SECURITIES At December 31, 2024, the Company had no investment securities outstanding. As of December 31, 2023, the Company had no gross unrealized holding gains. The amortized cost, gross unrealized holding losses, and fair value for debt securities classified as available-for-sale securities by major security type and class of security at December 31, 2023 were as follows: (in millions) Amortized cost Gross unrealized holding losses Estimated fair value December 31, 2023: Cash and cash equivalents: Cash $ 129.9 $ — $ 129.9 Cash equivalents 2.2 — 2.2 Total cash and cash equivalents 132.1 — 132.1 Available-for-sale: Corporate bonds and notes 8.4 ( 0.1 ) 8.3 Municipal bonds 0.5 — 0.5 Total $ 141.0 $ ( 0.1 ) $ 140.9 During the years ended December 31, 2023 and 2022, the Company sold $ 90.4 million and $ 28.4 million of investments, respectively. The cost of the available for sale security sold was determined using the specific-identification method. The amount of gross realized gains and realized losses upon sales of investments was insignificant for the year ended December 31, 2024 and December 31, 2022. The amount of realized losses upon sales of investments was $ 1.5 million for the year ended December 31, 2023. As of December 31, 2023, the Company had seven available-for-sale debt securities in a gross unrealized loss position of $ 0.1 million, with a fair market value of $ 8.8 million. As of December 31, 2023, the expected losses were determined to be immaterial and as such, the Company did not record an allowance for credit losses. Additional information relating to fair value of marketable investment securities can be found in Note 3. 3. FAIR VALUE MEASUREMENTS The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels: Level 1—quoted prices in active markets for identical assets and liabilities. 89 Table of Contents Level 2—observable inputs other than quoted prices in active markets for identical assets and 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. Some of the Company’s marketable securities primarily utilized broker quotes in a non-active market for valuation of these securities. Level 3—unobservable inputs. All of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. For Level 2 securities, the Company uses a third-party pricing service which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application, and corroborative information. The fair value of the Company’s long-term debt, which it considers a Level 2 measurement, is estimated using a discounted cash flow analysis, based on the Company’s current estimated incremental borrowing rates for similar borrowing arrangements. The fair value of the Company’s long-term debt is estimated to be $ 40.2 million at December 31, 2024. At December 31, 2024, the Company did not have any financial assets or liabilities requiring fair value re-measurement. The following table sets forth the fair value of the financial assets and liabilities that the Company re-measures on a regular basis as of December 31, 2023: (in millions) Level 1 Level 2 Level 3 Total December 31, 2023 Money market funds (a) $ 2.2 $ — $ — $ 2.2 Corporate bonds and notes — 8.3 — 8.3 Municipal bonds — 0.5 — 0.5 Contingent consideration — — ( 5.4 ) ( 5.4 ) Total $ 2.2 $ 8.8 $ ( 5.4 ) $ 5.6 (a) Money market funds are primarily comprised of exchange traded funds and accrued interest. The following table reconciles the change in the fair value of the contingent consideration during the periods presented: (in millions) Years Ended December 31, 2024 2023 2022 Carrying amount at beginning of period $ 5.4 $ 6.8 $ 8.6 Payment of contingent consideration ( 5.8 ) — ( 3.0 ) Consideration recognized at acquisition — — 2.1 Change in fair value recognized in the statement of operations 0.4 ( 1.5 ) ( 0.4 ) Translation adjustments recognized in other comprehensive income (loss) — 0.1 ( 0.5 ) Carrying amount at end of period $ — $ 5.4 $ 6.8 For the Level 2 contingent consideration related to the acquisition of Gateway, the Company reassesses the fair value of expected contingent consideration and the corresponding liability each reporting period using current financial or operating projections. As of December 31, 2024, the Company has estimated a fair value of $ 0 related to the Gateway contingent consideration as the achievement of the contingent consideration targets is not considered probable. 90 Table of Contents 4. PROPERTY, PLANT AND EQUIPMENT, NET The property, plant and equipment were as follows: December 31, (in millions) 2024 2023 Leasehold improvements $ 78.5 $ 91.3 Equipment 148.5 147.6 Property, plant and equipment, gross 227.0 238.9 Less accumulated depreciation ( 109.6 ) ( 119.9 ) Property, plant and equipment, net $ 117.4 $ 119.0 During the year ended December 31, 2023, the Company incurred $ 5.7 million of accelerated depreciation of leasehold improvements and equipment in connection with the Company's decision to cease the use of its previous corporate headquarters in Salt Lake City, Utah and transition corporate support operations to its new facility in west Salt Lake City. The Company formally assigned the previous corporate headquarter lease to a third party as of December 31, 2023. See Note 13 for further discussion. The Company recorded depreciation during the respective periods as follows: Years Ended December 31, (in millions) 2024 2023 2022 Depreciation expense $ 19.5 $ 19.1 $ 11.6 5. GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill for the year ended December 31, 2024 are as follows: (in millions) Year Ended December 31, 2024 Beginning balance $ 287.4 Goodwill impairment ( 0.8 ) Translation adjustments ( 0.3 ) Ending balance $ 286.3 During the fourth quarter of 2024, UnitedHealthcare announced that it would no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including the Company's GeneSight test, under its commercial, individual exchange, and certain managed Medicaid plans. The change took effect for commercial and individual exchange plans on January 1, 2025, and is expected to take effect for impacted managed Medicaid plans during the first half of 2025. As a result, the Company performed an quantitative impairment test for the goodwill for the Pharmacogenomics reporting unit during the fourth quarter of 2024. The Company also elected to perform a quantitative impairment review of goodwill for its Women's Health and International reporting units. The Company estimated the fair values of each reporting unit using both the market approach, applying an observable multiple of revenue based on guideline public companies, and the income approach, discounting future cash flows based on management's expectations of the current and future operating environments for each reporting unit. The Company corroborated the reasonableness of the estimated reporting unit fair values by reconciling the values to its enterprise value and market capitalization. The goodwill balance at each reporting unit was determined to not be impaired as of December 31, 2024. 91 Table of Contents During the second quarter of 2024, as a result of the disposition of the EndoPredict business, the Company recognized a goodwill impairment charge of $ 0.8 million for the goodwill allocated to the EndoPredict business within the Company's International reporting unit. The goodwill impairment charge is reflected in Goodwill and long-lived asset impairment charges in the Consolidated Statements of Operations. See Note 17 for further discussion. The Company did no t record an impairment of goodwill for the years ended December 31, 2023 and 2022. Intangible Assets The following tables summarize the amounts reported as intangible assets: (in millions) Gross Carrying Amount Accumulated Amortization Net Weighted-Average Useful Life (in Years) Weighted-Average Remaining Useful Life (in Years) At December 31, 2024 Developed technologies $ 560.1 $ ( 326.5 ) $ 233.6 10.6 3.6 Internal-use software 1.8 ( 0.7 ) 1.1 3.0 1.9 Customer relationships 1.6 ( 0.3 ) 1.3 10.0 7.8 Trademarks 6.1 ( 1.3 ) 4.8 10.0 7.8 Internal-use software (in-process) 21.6 — 21.6 Total intangible assets $ 591.2 $ ( 328.8 ) $ 262.4 (in millions) Gross Carrying Amount Accumulated Amortization Net Weighted-Average Useful Life (in Years) Weighted-Average Remaining Useful Life (in Years) At December 31, 2023 Developed technologies $ 626.1 $ ( 295.3 ) $ 330.8 14.4 8.1 Internal-use software 0.8 ( 0.1 ) 0.7 3.0 2.5 Customer relationships 1.6 ( 0.2 ) 1.4 10.0 8.8 Trademarks 6.1 ( 0.7 ) 5.4 10.0 8.8 Internal-use software (in-process) 11.2 — 11.2 Total intangible assets $ 645.8 $ ( 296.3 ) $ 349.5 As noted above, UnitedHealthcare announced that it would longer provide coverage for certain multi-gene panel pharmacogenetic tests, including the Company's GeneSight test, which triggered the Company to perform a recoverability test for the Pharmacogenomics asset group during the fourth quarter of 2024. The Company performed the recoverability test by comparing the carrying value of the asset group to its estimated undiscounted future cash flows. The analysis indicated that the carrying value exceeded the recoverable amount, requiring the Company to determine the fair value of the asset group. The fair value of the developed technology was determined using a discounted cash flow model. The primary assumptions used in the discounted cash flow model included projected revenue and profitability associated with the developed technology based on management's forecast and a discount rate reflective of the risk-adjusted cost of capital of 10 %. As the carrying value for the developed technology asset exceeded the relative fair value, the Company recognized an impairment charge of $ 43.0 million during the year ended December 31, 2024, which is included in " Goodwill and long-lived asset impairment charges " in the Consolidated Statements of Operations. The impairment reduced the carrying value of the developed technology to its estimated fair value of $ 89.0 million as of the impairment date. The Company determined there was no impairment of long-lived intangible assets for the years ended December 31, 2023 and 2022. In recent years, the Company has invested in the development of internal-use software. As of December 31, 2024, the Company has capitalized $ 21.6 million related to projects under development. The Company expects the majority of the current in-process internal-use software projects to be completed in fiscal year 2025. 92 Table of Contents As of December 31, 2024, the Company's developed technologies have estimated remaining useful lives ranging between 5 and 12 years. The Company's acquired trademarks and customer relationships have an estimated remaining useful life of approximately 8 years as of December 31, 2024. The Company's internal-use software assets are amortized over the estimated useful life of the software, which is generally 3 years. The Company recorded amortization during the respective periods for intangible assets as follows: Years Ended December 31, (in millions) 2024 2023 2022 Amortization of intangible assets $ 42.1 $ 42.8 $ 41.1 Future amortization expense of intangible assets as of December 31, 2024 is estimated to be as follows (in millions): Years Ended December 31, Amortization Expense 2025 $ 37.4 2026 37.2 2027 36.8 2028 36.7 2029 36.7 Thereafter 77.6 Total $ 262.4 6. ACCRUED LIABILITIES Accrued liabilities consist of the following: December 31, (in millions) 2024 2023 Employee compensation and benefits $ 57.4 $ 49.7 Accrued taxes payable 5.1 4.6 Refunds payable and reserves 19.9 20.1 Short-term contingent consideration — 3.1 Accrued royalties 6.5 5.3 Legal settlement 2.8 6.0 Lease termination accrual 3.8 4.4 Escrow liability 7.5 — Other accrued liabilities 16.0 20.7 Total accrued liabilities $ 119.0 $ 113.9 Revenue is constrained in anticipation of requests for refunds of payments made previously by insurance carriers. The following table summarizes the balance and activity of the refunds payable and reserves for the years ended December 31, 2024 and 2023: Years Ended December 31, (in millions) 2024 2023 Beginning balance $ 20.1 $ 19.3 Recoupments paid ( 11.3 ) ( 13.8 ) Additions to the reserve 11.1 14.6 Ending balance $ 19.9 $ 20.1 93 Table of Contents 7. LONG-TERM DEBT On June 30, 2023, the Company entered into an asset-based revolving credit facility (the “ABL Facility”) with an initial maximum principal amount of $ 90.0 million, with JPMorgan Chase Bank, N.A., as administrative agent and issuing bank, the other lender parties thereto, and certain of the Company's domestic subsidiaries (the "Guarantors"). On October 31, 2023, the Company entered into an amendment to the ABL Facility to increase the maximum principal amount of the available revolving line of credit by $ 25.0 million for a total maximum principal commitment of $ 115.0 million under the ABL Facility, which was effected through a new commitment provided by a new lender, Goldman Sachs Bank USA. The ABL Facility matures on June 30, 2026. The obligations of the Company are guaranteed by the Guarantors and the ABL Facility is secured by substantially all of the assets of the Company and the Guarantors. The Company had long-term debt of $ 39.6 million and $ 38.5 million under the ABL Facility at December 31, 2024 and December 31, 2023, respectively, net of $ 0.9 million and $ 1.5 million of debt issuance costs, respectively. Proceeds from the ABL Facility were or will be used for the working capital needs and general corporate purposes of the Company and its subsidiaries. Availability under the ABL Facility is subject to a borrowing base, which is the lesser of (a) 85 % of the Company's and the Guarantors' eligible accounts receivable plus certain cash held in a segregated and fully-blocked account with the administrative agent in an amount up to $ 20.0 million ("Eligible Cash") minus any reserves established by the administrative agent in accordance with the ABL Facility, and (b) the aggregate amount of cash collections from eligible accounts of the Company and the Guarantors for the 60 consecutive days most recently ended. Subject to certain conditions, the Company can freely withdraw cash from the Eligible Cash account, provided that any reduction in the Eligible Cash amount will have a corresponding reduction in the borrowing base under the ABL Facility. Loans outstanding under the ABL Facility will bear interest at a rate per annum equal to, at the option of the Company, either (a) the greatest of (i) the daily Prime Rate, (ii) the daily NYFRB Rate plus 0.5 %, and (iii) the monthly Adjusted Term SOFR Rate (as defined below) plus 1.0 % (the “ABR”) plus an applicable margin ranging from 1.0 % to 1.5 % depending on the aggregate average unused availability under the ABL Facility during the prior quarter or (b) term Secured Overnight Financing Rate ("SOFR") for a tenor of one, three or six months (at the Company’s election) plus 0.1 % (the “Adjusted Term SOFR Rate”) plus an applicable margin ranging from 2.0 % to 2.5 % depending on the average unused availability under the ABL Facility during the prior quarter, with an ABR floor of 1.0 % and an Adjusted Term SOFR Rate floor of 0.0 %. Under the ABL Facility, the undrawn fee ranges from 37.5 to 50 basis points based on the daily amount of the available revolving commitment. The weighted average interest rate for borrowings under the ABL Facility as of December 31, 2024 was 7.8 %. The interest rate for borrowings under the ABL Facility as of December 31, 2023 was 9.75 %. The Company may elect to prepay all or any portion of the amounts owed prior to the maturity date without premium or penalty. The ABL Facility is also subject to customary mandatory prepayments with the proceeds of unpermitted indebtedness and upon the occurrence of an over-advance. Voluntary and mandatory prepayments and all other payments of the ABL Facility must be accompanied by payment of accrued interest on the principal amount repaid or prepaid. The ABL Facility contains customary loan terms, interest rates, representations and warranties and affirmative and negative covenants, in each case, subject to customary limitations, exceptions, and exclusions. Covenants under the ABL Facility limit or restrict the Company and its subsidiaries' ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments (including dividends), merge or consolidate, and enter into certain speculative hedging arrangements. The ABL Facility requires the Company and the Guarantors, on a consolidated basis, to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 if availability under the ABL Facility is less than the greater of (a) $ 10.6 million and (b) 12.5 % of the lesser of the maximum commitment amount and the borrowing base. As of December 31, 2024, availability under the ABL Facility was $ 56.0 million. For the years ended December 31, 2024 and December 31, 2023, the Company was compliant with all such financial covenants . In addition, the ABL Facility includes a number of customary events of default. If any event of default occurs (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest, and any other monetary obligations on all the then-outstanding amounts under the ABL Facility may become due and payable immediately. Under the terms of the ABL Facility, if (i) an event of default has occurred and is continuing or (ii) availability under the ABL Facility is less than the greater of (a) $ 12.5 million and (b) 15 % of the lesser of the maximum commitment amount and the borrowing base, the Company will become subject to cash dominion, upon which the administrative agent will apply funds credited to a collection account to first prepay any outstanding protective advances, second to prepay any revolving loans and third, to cash collateralize any outstanding letter of credit exposure. Such cash dominion period will end when availability has remained in excess of the greater of (i) $ 12.5 million and (ii) 15 % of the lesser of the maximum commitment amount and the borrowing base for a period of 45 consecutive days and no event of default is continuing. 94 Table of Contents 8. OTHER LONG-TERM LIABILITIES The Company's other long-term liabilities were as follows: December 31, (in millions) 2024 2023 Contingent consideration $ — $ 2.3 Escrow liability — 7.5 Legal settlements — 24.0 Other 2.2 7.5 Total other long-term liabilities $ 2.2 $ 41.3 On October 23, 2023 (the "Effective Date"), the Company and Ravgen, Inc. ("Ravgen") entered into a settlement agreement pursuant to which the parties agreed to settle a pending lawsuit. Pursuant to the terms of the settlement agreement, the Company agreed to pay Ravgen a minimum of $ 12.8 million in three installment payments of $ 5 million, $ 5 million, and $ 2.8 million on or before October 31, 2023, October 31, 2024, and October 31, 2025, respectively. The Company also agreed to pay Ravgen $ 21.3 million in five annual installments beginning no earlier than January 1, 2026 if Ravgen successfully concluded in its favor all of Ravgen's litigations and patent reexaminations pending as of the Effective Date. As of the Effective Date, the Company determined that the payment of $ 21.3 million was probable and estimable. In the year ended December 31, 2024, based on updated information, the Company determined that the payment is no longer probable and reversed the accrual on the Consolidated Statements of Operations. 9. PREFERRED AND COMMON STOCKHOLDERS' EQUITY The Company is authorized to issue up to 5.0 million shares of preferred stock, par value $ 0.01 per share. There were no shares of preferred stock outstanding at December 31, 2024 and December 31, 2023. The Company is authorized to issue up to 150.0 million shares of common stock, par value $ 0.01 per share. In November 2023, the Company completed an underwritten public offering in which it sold 7.4 million shares of its common stock at a price of $ 17.00 per share, for gross proceeds of $ 126.5 million and net proceeds of $ 117.6 million. There were 91.3 million and 89.9 million shares of common stock issued and outstanding at December 31, 2024 and 2023, respectively. Shares of common stock issued and outstanding Years Ended December 31, (in millions) 2024 2023 2022 Beginning common stock issued and outstanding 89.9 81.2 80.0 Common stock issued upon exercise of options, vesting of restricted stock units, and purchases under employee stock purchase plans 1.4 1.3 1.2 Common stock issued for public offering — 7.4 — Common stock issued and outstanding at end of period 91.3 89.9 81.2 95 Table of Contents 10. STOCK-BASED COMPENSATION On November 30, 2017, the Company’s stockholders approved the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan (as amended, the “2017 Plan”). The 2017 Plan allows the Company, under the direction of the Compensation and Human Capital Committee (the "CHCC") of the Board of Directors, to make grants of restricted and unrestricted stock and stock unit awards to employees, consultants and directors. Stockholders have subsequently approved amendments to the 2017 Plan increasing the shares available to grant thereunder, including most recently at the Company's annual meeting of stockholders held on June 1, 2023, when stockholders approved an amendment to the 2017 Plan to increase the aggregate number of shares of common stock available thereunder for the granting of awards by an additional 4.8 million shares. As of December 31, 2024, the Company had 2.2 million shares of common stock available for grant under the 2017 Plan. If an RSU awarded under the 2017 Plan is cancelled or forfeited without the issuance of shares of common stock, the unissued shares that were subject to the RSU will again be available for issuance pursuant to the 2017 Plan. The number of shares, terms, and vesting periods are generally determined by the Company’s Board of Directors or the CHCC on an award-by-award basis. RSUs granted to employees generally vest either ratably over three or four years or as cliff vesting after three years either on the anniversary of the date on which the RSUs were granted or during the month in which such anniversary dates occur. The number of PSUs awarded to certain employees may be increased or reduced based on certain additional performance and market metrics. RSUs granted to non-employee directors generally vest in full upon the earlier of the completion of one year of service following the date of the grant or the date of the next annual meeting of stockholders following such grant. Options granted to the Company's President and Chief Executive Officer as an inducement to his employment expire on August 13, 2027. The performance and market conditions associated with PSU awards granted during the year ended December 31, 2024 include vesting that is based on revenue targets ( 34 % weighting), adjusted earnings per share targets ( 33 % weighting), and relative total stockholder return ( 33 % weighting) measured against the Nasdaq Health Care Index (IXHC) using the 20 -trading day averages at the beginning and end of the measurement period. The measurement period for the relative total stockholder return metric is January 1, 2024 through December 31, 2026, and the revenue and adjusted earnings per share metrics will be measured based on fiscal year 2026 results. The Company estimates the likelihood of achievement of performance conditions for all PSU awards at the end of each period. To the extent those awards or portions thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance period. The portion of the awards pertaining to relative total stockholder return represent market conditions and, accordingly, the estimated fair value of such awards is recognized over the performance period. Stock Options A summary of the stock option activity under the Company's inducement awards for the twelve months ended December 31, 2024 is as follows: (number of shares in millions) Number of shares Weighted average exercise price Weighted average remaining contractual life (years) Options outstanding at December 31, 2023 0.7 $ 13.38 Options outstanding at December 31, 2024 0.7 13.38 2.62 Options exercisable at December 31, 2024 0.5 13.38 2.62 Options vested and expected to vest 0.2 $ 13.38 2.62 There were no options granted during the years ended December 31, 2024, 2023, and 2022. 96 Table of Contents Restricted Stock Units A summary of the RSU awards activity under the Company's equity plans and inducement awards, including PSU awards, for the year ended December 31, 2024 is as follows: (number of shares in millions) Number of shares Weighted average grant date fair value RSUs unvested and outstanding at December 31, 2023 4.4 $ 24.37 RSUs granted 2.7 $ 22.09 Less: RSUs vested ( 1.6 ) $ 22.98 RSUs canceled ( 0.2 ) $ 23.58 RSUs unvested and outstanding at December 31, 2024 5.3 $ 23.66 The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2024, 2023, and 2022, was $ 22.09 , $ 23.02 , and $ 25.78 , respectively. The fair value of RSUs that vested during the years ended December 31, 2024, 2023, and 2022, was $ 37.9 million, $ 30.5 million, and $ 31.0 million, respectively. Stock-based compensation expense recognized and included in the Consolidated Statements of Operations was allocated as follows: Years Ended December 31, (in millions) 2024 2023 2022 Cost of revenue $ 1.6 $ 1.4 $ 1.7 Research and development expense 8.8 4.0 5.2 Sales and marketing expense 9.0 7.2 6.2 General and administrative expense 30.4 28.1 25.0 Total stock-based compensation expense $ 49.8 $ 40.7 $ 38.1 As of December 31, 2024, there was $ 70.9 million of total unrecognized stock-based compensation expense that will be recognized over a weighted-average period of 2.0 years. The Company recognizes forfeitures as they occur. The aggregate intrinsic value of options outstanding, aggregate intrinsic value of options that are fully vested and aggregate intrinsic value of RSUs vested and expected to vest is as follows: (in millions) December 31, 2024 Aggregate intrinsic value of options outstanding $ 0.2 Aggregate intrinsic value of options fully vested 0.2 Aggregate intrinsic value of RSUs outstanding 71.7 97 Table of Contents Employee Stock Purchase Plan The Company also has an Employee Stock Purchase Plan that was initially approved by stockholders in 2012 and was amended and approved by the Board of Directors of the Company on September 23, 2021 and the stockholders on June 2, 2022 (the “Amended and Restated 2012 Purchase Plan”), under which 4.0 million shares of common stock were authorized for issuance. Shares are issued under the Amended and Restated 2012 Purchase Plan twice yearly at the end of each offering period and the number of shares that may be purchased by any participant during an offering period is limited to 5,000 shares. The first offering period of 2024 started on December 1, 2023 and ended on May 31, 2024. The second offering period of 2024 began on June 1, 2024 and ended on November 30, 2024. As of December 31, 2024, 0.9 million shares of common stock were available for issuance under the Amended and Restated 2012 Purchase Plan. Shares purchased under, and compensation expense associated with, the Amended and Restated 2012 Purchase Plan for the periods reported are as follows: Years Ended December 31, (in millions) 2024 2023 2022 Shares purchased under the plan 0.4 0.4 0.3 Plan compensation expense $ 2.1 $ 2.2 $ 1.9 The fair value of shares issued under the Amended and Restated 2012 Purchase Plan that was in effect for each period reported was calculated using the Black‑Scholes option-pricing model using the weighted-average assumptions below. Each of these inputs is subjective and its determination generally requires significant judgment. Years Ended December 31, 2024 2023 2022 Risk-free interest rate 5.3 % 5.1 % 1.4 % Expected dividend yield — % — % — % Expected life (in years) 0.5 0.5 0.5 Expected volatility 50 % 56 % 53 % 11. INCOME TAXES Income tax expense (benefit) consists of the following: Years Ended December 31, (in millions) 2024 2023 2022 Current: Federal $ 3.4 $ 3.4 $ ( 0.5 ) State 1.5 1.8 1.9 Foreign 1.2 0.2 0.5 Total current 6.1 5.4 1.9 Deferred: Federal ( 15.5 ) ( 51.8 ) ( 25.8 ) State ( 5.5 ) ( 5.2 ) ( 4.8 ) Foreign 3.1 0.1 ( 2.9 ) Change in valuation allowance 15.6 52.6 3.0 Total deferred ( 2.3 ) ( 4.3 ) ( 30.5 ) Total income tax expense (benefit) $ 3.8 $ 1.1 $ ( 28.6 ) Loss before income taxes consists of the following: Years Ended December 31, (in millions) 2024 2023 2022 United States $ ( 125.4 ) $ ( 263.2 ) $ ( 141.3 ) Foreign 1.9 1.0 0.7 Total $ ( 123.5 ) $ ( 262.2 ) $ ( 140.6 ) 98 Table of Contents The differences between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations were as follows: Years Ended December 31, (in millions) 2024 2023 2022 Federal income tax benefit at the statutory rate $ ( 25.9 ) 21.0 % $ ( 54.9 ) 21.0 % $ ( 29.5 ) 21.0 % State income taxes, net of federal benefit ( 2.4 ) 1.9 % ( 4.1 ) 1.6 % ( 3.3 ) 2.3 % Research and development credits ( 0.4 ) 0.3 % ( 1.6 ) 0.6 % ( 3.5 ) 2.5 % Uncertain tax positions 2.8 ( 2.3 ) % 3.7 ( 1.4 ) % 0.6 ( 0.4 ) % Stock-based incentive awards 0.8 ( 0.6 ) % 1.2 ( 0.5 ) % 2.5 ( 1.8 ) % Foreign rate differential 3.3 ( 2.7 ) % ( 0.4 ) 0.2 % — — % Change in valuation allowance 15.7 ( 12.7 ) % 52.6 ( 20.1 ) % 2.6 ( 1.8 ) % Non-deductible officer compensation 3.9 ( 3.2 ) % 3.0 ( 1.1 ) % 3.5 ( 2.5 ) % Acquisitions and dispositions 5.1 ( 4.1 ) % 0.1 — % ( 0.1 ) 0.1 % Other, net 0.9 ( 0.7 ) % 1.5 ( 0.7 ) % ( 1.4 ) 0.9 % Total income tax expense (benefit) $ 3.8 ( 3.1 ) % $ 1.1 ( 0.4 ) % $ ( 28.6 ) 20.3 % The significant components of the Company’s deferred tax assets and liabilities were comprised of the following: December 31, (in millions) 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 62.7 $ 77.1 Stock compensation expense 6.6 5.0 Research and development credits 20.6 20.8 Lease liability 24.4 28.0 Capitalized research and development costs 54.3 38.4 Accrued expenses and liabilities 16.5 22.5 Other, net — 3.2 Total gross deferred tax assets 185.1 195.0 Less valuation allowance ( 111.9 ) ( 95.0 ) Total deferred tax assets 73.2 100.0 Deferred tax liabilities: Intangible assets 55.5 84.2 Lease right-of-use assets 13.3 15.5 Property, plant and equipment 3.2 1.9 Other, net 0.8 — Total deferred tax liabilities 72.8 101.6 Net deferred tax asset (liability) $ 0.4 $ ( 1.6 ) The Company incurred a loss in the current year and the two preceding years, resulting in a three-year cumulative loss. Pursuant to ASC 740, Income Taxes ("ASC 740"), a company that is in a cumulative loss position must consider the weight of this significant negative evidence together with the weight of other positive and negative evidence that is available to determine the realizability of deferred tax assets and that overcoming negative evidence such as cumulative losses in recent years is difficult. Due to significant negative evidence and the lack of sufficient positive evidence, the Company has applied a valuation allowance to the majority of its deferred tax assets, leaving a remaining deferred tax asset balance of $ 0.4 million. For those foreign entities for which an election has been made to be treated as disregarded for U.S. tax purposes, the appropriate U.S. jurisdiction deferred tax assets and liabilities have been recorded. 99 Table of Contents At December 31, 2024, the Company had the following net operating loss and research credit carryforwards (tax effected), with their respective expiration periods. Certain carryforwards are subject to the limitations of Section 382 and 383 of the Internal Revenue Code as indicated: Carryforwards (in millions) Amount Subject to Sections 382, 383 Expires beginning in year Through Federal net operating loss $ 32.2 Yes 2033 Indefinite Federal capital loss 13.8 No 2026 2029 Utah net operating loss 0.9 No Indefinite Indefinite California net operating loss 5.0 Yes 2029 2044 Other state net operating loss 6.3 Yes Various Various Foreign net operating losses (various jurisdictions) 4.3 No Various Various Federal research credit 10.5 Yes 2027 2044 Utah research credit 4.9 No 2024 2038 California research credit 5.2 No Indefinite Indefinite The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement criteria as set forth in ASC 740. As of December 31, 2024, the Company had net unrecognized tax benefits of $ 51.7 million. The Company’s gross unrecognized tax benefits as of the years ended December 31, 2024, 2023, and 2022, and the changes in those balances are as follows: Years Ended December 31, (in millions) 2024 2023 2022 Unrecognized tax benefits at the beginning of period $ 48.1 $ 43.9 $ 32.1 Gross increases - current year tax positions 1.0 0.8 12.9 Gross increases - prior year tax positions 2.6 3.6 1.6 Gross decreases - prior year tax positions — ( 0.2 ) ( 2.0 ) Gross decreases - settlements — — ( 0.7 ) Unrecognized tax benefits at end of year $ 51.7 $ 48.1 $ 43.9 Interest and penalties in year-end balance $ 8.8 $ 6.4 $ 4.1 In 2022, the Company filed a U.S. federal tax return taking an uncertain tax position that was not recorded as a benefit or deferred tax asset in the financial statements but for which a $ 12.0 million unrecognized tax benefit has been included in the table above. The Company believes it is reasonably possible that a decrease of up to $ 48 million in unrecognized tax benefits may be necessary within the coming year. Interest and penalties related to uncertain tax positions are included as a component of Income tax expense (benefit) and all other interest and penalties are included as a component of Other income (expense) in the Consolidated Statements of Operations. For the years ended December 31, 2024 and December 31, 2023, $ 32.7 million and $ 30.2 million of the unrecognized tax benefits, if recognized, would affect the effective tax rate, respectively. The Company files U.S. federal, foreign and state income tax returns in jurisdictions with various statutes of limitations. The Company is currently under audit by the state of California for years ended June 30, 2017 through June 30, 2018. Annual tax provisions include amounts considered necessary to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued. 12. COMMITMENTS AND CONTINGENCIES The Company is involved from time to time in various disputes, claims, and legal actions, including class actions and other litigation, including the matters described below, arising in the ordinary course of business. Such actions may include allegations of negligence, product or professional liability or other legal claims, and could involve claims for substantial compensatory and punitive damages or claims for indeterminate amounts of damages. The Company is also involved, from time to time, in investigations by governmental agencies regarding its business which may result in adverse judgments, settlements, fines, penalties, injunctions, or other relief. 100 Table of Contents In addition, certain federal and state statutes, including the qui tam provisions of the federal False Claims Act, allow private individuals to bring lawsuits against healthcare companies on behalf of the government or private payors. The Company has received subpoenas from time to time related to billing or other practices based on the False Claims Act or other federal and state statutes, regulations, or other laws. The Company intends to defend its current litigation matters but cannot provide any assurance as to the ultimate outcome or that an adverse resolution would not have a material adverse effect on its financial condition, results of operations or cash flows. The Company assesses legal contingencies to determine the degree of probability and range of possible loss for potential accrual and disclosure in its financial statements. When evaluating legal contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the proceedings may be in early stages, there may be uncertainty as to the outcome of pending appeals or motions, there may be significant factual issues to be resolved, and there may be complex or novel legal theories to be presented. In addition, damages may not be specified or the damage amounts claimed may be unsupported, exaggerated or unrelated to possible outcomes, and therefore, such amounts are not a reliable indicator of potential liability. As of December 31, 2024, the Company has not recorded any material accrual for loss contingencies associated with legal proceedings or other matters or determined that an unfavorable outcome is probable and reasonably estimable in accordance with ASC 450, Contingencies . However, it is possible that the ultimate resolution of legal proceedings or other matters, if unfavorable, may be material to the Company's results of operations, financial condition or cash flows. Further, in the event that damages from an unfavorable resolution of one or more of these proceedings exceed the aggregate amount of the coverage limits of the Company’s insurance, or if the Company’s insurance carriers disclaim coverage, the amounts payable by the Company could also have a material adverse impact on the Company’s results of operations, financial condition or cash flows. From time to time, the Company receives recoupment requests from third-party payors for alleged overpayments. The Company disagrees with the contentions of the pending requests or has recorded an estimated reserve for the alleged overpayments. Qui Tam Lawsuit In June 2023, the Company received a civil investigative demand pursuant to the False Claims Act from the United States Department of Justice concerning whether the Company offered or paid remuneration to physicians at Carolina Urology Partners, PLLC, in exchange for referrals. The Department of Justice subsequently requested additional documentation and information during its investigation. The Company cooperated with the Department of Justice investigation, providing the documents and information requested. On January 22, 2025, the U.S. District Court for the Western District of North Carolina unsealed a qui tam complaint, filed on November 3, 2022, against Carolina Urology Partners, PLLC, and certain of its current or former physician partners, and the Company and certain of its former employees, alleging violations of the False Claims Act. On January 21, 2025, after a multi-year investigation into the Company's alleged conduct, the United States declined to intervene. The Company was not aware of the complaint until after it was unsealed and the Company has not been served the complaint yet. 13. LEASES The Company leases certain office spaces, research and development laboratory facilities, and office equipment with remaining lease terms ranging from approximately one to 14 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options, which allows the Company to, at its election, renew or extend the lease for a fixed period of time. These optional periods have not been considered in the determination of the ROU assets or lease liabilities associated with these leases when the Company did not consider it reasonably certain it would exercise the options. The Company has continued to execute on its multi-year strategy to reset its real estate footprint. During the year ended December 31, 2024, the Company took full possession of the remaining phases of its west Salt Lake City, Utah facility. The Company has completed the transition of its corporate support operations and certain laboratory operations from its legacy facilities in Salt Lake City to its new facility in west Salt Lake City. The Company plans to complete the transition of its remaining laboratory facilities to its next generation laboratory facilities in early 2025. Additionally, during 2024, the Company amended the lease for its west Salt Lake City facility to include approximately 63,000 additional square feet of laboratory space in anticipation of future operating needs. The lease has a term of 12 years and ends coterminous with the rest of the lease. The amendment is expected to commence in fiscal year 2026 with future rent payments totaling $ 18.2 million. During the year ended December 31, 2023, the Company assigned the lease for its previous corporate headquarters to a third party. 101 Table of Contents As a result, the operating ROU asset and operating lease liability associated with the lease was removed from the Company's Condensed Consolidated Balance Sheets. As of December 31, 2024, the Company has accrued $ 3.8 million for the remaining future payments under the lease assignment agreement, which was included in Accrued liabilities in the Consolidated Balance Sheets. Also during the year ended December 31, 2023, the Company modified the remaining lease term of certain other Salt Lake City, Utah facilities reducing the associated ROU asset and lease liability by $ 6.4 million. The Company performed evaluations of its contracts and determined the majority of its identified leases are operating leases. For the year ended December 31, 2024, the Company incurred $ 21.0 million in operating lease costs which are included in Operating expenses in the Consolidated Statements of Operations in relation to these operating leases. Of such lease costs, $ 5.0 million was variable lease expense, which was not included in the measurement of the Company's operating ROU assets and lease liabilities. The variable rent expense is comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company's election to not separate lease and non-lease components. For the year ended December 31, 2023, the Company incurred $ 25.9 million in lease costs which are included in Operating expenses in the Consolidated Statements of Operations in relation to these operating leases. Of such lease costs, $ 3.5 million was variable lease expense, which was not included in the measurement of the Company's operating ROU assets and lease liabilities. The Company's finance leases are immaterial. As of December 31, 2024, the maturities of the Company’s operating lease liabilities were as follows: Year Ended (in millions) : 2025 $ 18.9 2026 12.3 2027 12.3 2028 12.4 2029 12.1 Thereafter 73.7 Total future lease payments 141.7 Less: amounts representing interest 41.0 Present value of future lease payments 100.7 Less: current maturities of operating lease liabilities ( 12.8 ) Noncurrent operating lease liabilities $ 87.9 As of December 31, 2024, the weighted average remaining lease term is 9.3 years and the weighted average discount rate used to determine the operating lease liability was 6.5 %. As the implicit rate in the Company's leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. When calculating the Company’s incremental borrowing rates, the Company gives consideration to its credit risk, term of the lease, total lease payments and adjusts for the impacts of collateral, as necessary. The lease term used may reflect any option to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expenses for the Company's operating leases are recognized on a straight-line basis over the lease term. 14. EMPLOYEE DEFERRED SAVINGS PLAN The Company has a deferred savings plan which qualifies under Section 401(k) of the Internal Revenue Code. Substantially all of the Company’s U.S. employees are covered by the plan. The Company makes matching contributions of 50.0 % of each employee’s contribution with the employer’s contribution not to exceed 4.0 % of the employee’s compensation. The Company’s recorded contributions to the plan are as follows: Years Ended December 31, (in millions) 2024 2023 2022 Deferred savings plan contributions $ 10.3 $ 10.0 $ 9.0 102 Table of Contents 15. SEGMENT AND RELATED INFORMATION The Company’s business is aligned with how the CODM reviews performance and makes decisions in managing the Company. The Company has identified the President and Chief Executive Officer as the CODM. The CODM regularly reviews consolidated financial information for the purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. Accordingly, the Company has determined that it operates as a single operating segment. The Company has identified consolidated net income (loss) as the measure of segment profitability. The significant expenses and other segment expenses presented to the CODM are at the same level as presented in Consolidated Statement Operations in these financial statements. The Company's long-lived assets by geographical region are as follows: December 31, (in millions) 2024 2023 Long-lived assets: United States $ 728.1 $ 794.6 Rest of world 1.4 38.3 Total $ 729.5 $ 832.9 16. BUSINESS ACQUISITION On February 1, 2024, the Company acquired from Intermountain Health select assets for an immaterial amount from its Intermountain Precision Genomics ("IPG") laboratory business, including the Precise Tumor Test, the Precise Liquid Test, and IPG's CLIA-certified laboratory in St. George, Utah (the "Precise acquisition"). In connection with the Precise acquisition, the Company recognized a gain of $ 2.2 million, which is included in Other income in the Consolidated Statements of Operations. 17. DIVESTITURE On August 1, 2024, the Company completed the sale of its EndoPredict business to Eurobio Scientific ("Eurobio") for net cash consideration of $ 10.0 million, subject to customary closing adjustments. The transaction was accounted for as a sale of business. The Company recognized a total net loss, including transaction expenses, of $ 12.4 million during the twelve months ended December 31, 2024 in connection with this sale. The loss is included in Goodwill and long-lived asset impairment charges on the Consolidated Statements of Operations. The recognized loss included the release of $ 4.4 million of foreign currency translation adjustments previously included in Accumulated other comprehensive income (loss). As part of the transaction, the Company licensed the rights from Eurobio to continue to sell EndoPredict as a laboratory developed test outside of the European Union and licensed to Eurobio the right to sell Prolaris in vitro diagnostic kits outside the U.S. 18. SUPPLEMENTAL CASH FLOW INFORMATION The Company's supplemental cash flow information for the respective periods are as follows: December 31, (in millions) 2024 2023 2022 Cash paid for income taxes $ 2.7 $ 1.9 $ 1.8 Cash paid for interest 1.9 1.4 — Non-cash investing and financing activities: Change in operating lease right-of-use assets and lease liabilities Operating lease right-of-use assets $ 3.1 $ ( 31.0 ) $ 46.9 Operating lease liabilities ( 3.1 ) 36.7 ( 46.9 ) Tenant improvement allowance not yet received — — 22.9 Purchases of property, plant and equipment and capitalization of internal-use software in accounts payable and accrued liabilities 6.4 6.9 10.0 103 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.