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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-28 · 177 added, 147 removed, 175 unchanged (65% of the section changed)

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Unless otherwise noted, all of the financial information in this Annual Report on Form 10-K is consolidated financial information of the Company.

We are a leading molecular diagnostic testing and precision medicine company dedicated to advancing health and well-being for all.

We develop and offer 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.

Our molecular tests provide insights that help people take control of their health and enable healthcare providers to better detect, treat, and prevent disease.

Personalize molecular data and digital and virtual consumer trends are converging to transform traditional models of care.

We believe that engaging with providers and patients throughout their consumer or patient journey will better enable us to execute our strategies and fulfill our mission.

Myriad Genetics is a leading molecular diagnostics and precision medicine company committed to advancing health and well-being for all.

We develop and commercialize molecular tests that help patients and providers uncover genetic insights.

Our tests assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where molecular insights can significantly improve patient care, support earlier detection, enable more precise treatment and contribute to lowering healthcare costs.

Personalized molecular data and digital and virtual consumer trends are converging to transform traditional models of care.

We believe that engaging with providers and patients throughout their consumer and patient journey will better enable us to execute our strategies and fulfill our mission.

We believe there are significant growth opportunities in addressing the pressing healthcare needs of patient populations through innovative molecular diagnostic testing and precision medicine solutions and services.

Our focus is on innovation and growth in three key areas where we have specialized products, capabilities, and expertise:

Oncology, Women's Health, and Pharmacogenomics.

Our long-term growth strategy is built on investments in science and innovation, technology-enabled operations, an enhanced customer experience, strong commercial execution, and scalable operations.

To drive continued growth, we plan to accelerate electronic medical records (EMR) integrations, expand our sales channels, including into large health systems, cross sell our portfolio of testing products to providers, enhance our testing products within medical guidelines, demonstrate our clinical differentiation and value compared to the standard of care, and optimize our revenue cycle processes.

For example, in June 2024, we launched the Universal Plus Panel to our Foresight Carrier Screen Test, which is an expanded carrier screening test.

We also continue to invest in clinical evidence development to support the growth of our existing products and launch of new products, such as FirstGene, Precise Liquid, and Precise molecular residual disease (MRD) which we expect will help us continue to grow.

We intend to continue to develop and enhance our products and services to support growth, improve patient and provider experience, and reach more patients of all backgrounds.

In addition, by investing in technology-enabled commercial tools, new laboratory facilities, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow.

For example, in early 2025, we plan to complete the transition of all of our laboratory activities to our next generation laboratory facilities, which we believe will improve the efficiency of our operations.

Our long-term growth str ategy is buil t on leveraging our differentiated strengths, including our reputation for trusted high-quality tests and customer service, and our established, extensive commercial reach in community medicine.

Our strategy also leverages invest ments in science and innovation, technology-enabled operations, an enhanced customer experience, strong commercial execution, and scalable operations.

Our strategic intent is to accelerate profitable growth by focusing on (i) providing a comprehensive testing menu for the Cancer Care Continuum (CCC) market with a priority for high growth applications;

(ii) growing our Prenatal Health and Mental Health revenues at or above market growth;

and (iii) delivering sustained profitable growth through financial and operational discipline and leveraging our operating model.

Under this strategy, we plan to leverage our strong scientific foundation, deep clinical partnerships, and technology-enabled capabilities to expand adoption of our testing portfolio and integrate our precision medicine solutions more deeply into clinical workflows across the Cancer Care Continuum, Prenatal Health, and Mental Health.

Cancer remains one of the most prevalent diseases, with more than two million new cases diagnosed, and more than eighteen million survivors, in the United States in 2025.

Myriad is a pioneer in DNA based cancer diagnostic testing, and a trusted leader in hereditary cancer testing across eleven of the most commonly occurring cancer types including breast, ovarian, colorectal, prostate, lung and skin.

We are also a leader in cancer therapy selection with our Homologous Recombination Deficiency (HRD) test and are planning to strengthen our portfolio of comprehensive genomic profiling tests through product development and partnerships.

We see molecular residual disease (MRD) testing as a significant opportunity for patient impact and revenue growth.

We believe Myriad’s ultra-sensitive Precise MRD offering, combined with our growing portfolio of other relevant diagnostic tests that are a common part of cancer care and, our commercial leadership in serving community medicine, will enable us to establish and grow a meaningful MRD business over the coming years.

As part of our Cancer Care Continuum strategy, we also plan to expand the number of biopharma partners we serve with services including biomarker identification and validation, companion diagnostic test development and regulatory registration, as well as companion diagnostic test commercialization.

Complementing our own capabilities with partnerships that enable us to bring compelling solutions to market more quickly is an important part of our strategy.

In early 2025, we entered into a strategic collaboration with PATHOMIQ, Inc.

pursuant to which we obtained exclusive U.S.

licen sing rights to PATHOMIQ’s AI-enabled diagnostic platform, PATHOMIQ_PRAD, to enhance our oncology portfolio and offer AI-driven prognostic and predictive solutions for prostate cancer care.

In September 2025, we entered into a strategic collaboration with SOPHiA GENETICS S.A.

to develop a global liquid biopsy companion diagnostic solution.

We continue to invest in clinical evidence development to support the growth of our existing products and launch of new products, such as FirstGene and Precise MRD.

We believe these investments in product innovation position us to expand our addressable markets and differentiate our portfolio of testing solutions.

We plan to continue to develop and enhance our products and services to support growth, improve patient and provider experience, and reach more patients of all backgrounds.

In addition, by investing in technology-enabled commercial tools, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow.

In 2025, we completed the transition of our laboratory operations to our next-generation laboratory facilities, which are designed to enhance automation, reduce turnaround time, and improve cost efficiency across our testing portfolio.

We believe these improvements, combined with our ongoing operational initiatives, position us to achieve greater scalability and reduce operating expenses as a percentage of revenue over time.

We are committed to making molecular testing accessible and actionable for patients and providers while driving long-term growth and profitability.

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During the year ended December 31, 2025, we reported total revenue of $824.5 million, a net loss of $365.9 million, and basic and diluted loss per share of $3.95.

During the fourth quarter of 2024, UnitedHealthcare updated its medical policy for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial and individual exchange benefit plans and certain managed Medicaid plans.

The change took effect for commercial and individual exchange benefit plans on January 1, 2025, and is expected to take effect for impacted managed Medicaid plans during the first half of 2025.

We anticipate that the change in UnitedHealthcare coverage will negatively impact our revenue, profitability, and cash flow in 2025 and thereafter.

While we intend to continue our engagement with UnitedHealthcare regarding its decision to change its GeneSight coverage policy, there is no guarantee that our efforts will be successful or that our GeneSight test will be covered by UnitedHealthcare or other payers in the future.

For additional information regarding the impact of UnitedHealthcare's change on goodwill in our Pharmacogenomics reporting unit and our business, please refer to Critical Accounting Estimates below and the risk factors " If the government and other third-party payors fail to provide coverage and adequate payment for our existing and future tests, if any, our revenue and prospects for profitability will be harmed " and " Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition " included in Part I, Item 1A, of this Annual Report on Form 10-K.

Business Updates and Financial Highlights

During the year ended December 31, 2025, our significant business updates and financial highlights include the following:

• Revenue growth of 11% year-over-year, driven by 23% growth in Pharmacogenomics, 17% growth in Prenatal and 11% growth in Hereditary Cancer.

• Ranked among Best Large Workplaces in Health Care by Fortune and achieved a Great Place to Work ® Certification for 2024.

• In February 2024, we acquired select assets from Intermountain Healthcare's Intermountain Precision Genomics (IPG) laboratory business, including the Precise Tumor test and the Precise Liquid test.

IPG's laboratory operations were successfully integrated into our west Salt Lake City facility during the fourth quarter of 2024.

• In May 2024, we announced the reorganization of our International operations, which included the sale of our EndoPredict business.

We have licensed the rights to continue to produce and sell EndoPredict as a laboratory developed test in the United States.

• Announced a series of ongoing research collaborations to study the use of MRD testing in breast cancer using our Precise MRD test.

These research collaborations involve researchers at The University of Texas MD Anderson Cancer Center, the University of Rochester Medical Center, the National Cancer Center Hospital East in Japan, and a study partnership with Aptitude Health.

• Announced the USPTO issued multiple new patents that further advance our ability to bring our tumor-informed, high-definition, MRD assay, Precise MRD, to market.

• Announced a collaboration with Flatiron Health, a leading health technology company dedicated to point of care solutions in oncology.

This collaboration allows physicians to order our MyRisk Hereditary Cancer Test and view the results of the test directly in Flatiron’s cloud-based EMR platform, OncoEMR.

• Announced an agreement with Lumea Inc.

to integrate our Prolaris and MyRisk tests into Lumea's digital pathology platform in order to streamline the ordering and delivery of the tests.

• Announced the appointment of Mark S.

Davis to our Board of Directors, effective in December 2024, expanding the Board of Directors from eight to nine members.

Davis was also appointed to the Audit and Finance Committee.

On February 24, 2025, Paul J.

Diaz, our President and Chief Executive Officer, announced that he will step down from those positions, and resign from our Board of Directors effective April 30, 2025, after which Mr.

Diaz will continue to serve as a consultant for another year.

Having engaged in a robust succession planning process, our Board of Directors appointed Samraat S.

Raha, our current Chief Operating Officer, to succeed Mr.

Diaz as our President and Chief Executive Officer and a member of our Board of Directors effective April 30, 2025.

On February 24, 2025, our Board of Directors also appointed Mark S.

Verratti, our current Chief Commercial Officer, as our Chief Operating Officer as of April 30, 2025 to succeed Mr.

Raha in this position.

We have historically experienced seasonality in our testing business.

The quarters ending March 31 and September 30 are typically weaker due to the annual reset of patient deductibles in the beginning of each calendar year and vacation schedules in the summer.

The quarter ending December 31 is typically stronger due to increased demand as patients meet their deductibles throughout the year;

however, due to various factors, including disruptions in workflows arising from EMR integrations, volumes were less than expected for the quarter ended December 31, 2024.

Seasonal patterns were disrupted in previous years as a result of the COVID pandemic and certain other factors, but we believe pre-COVID seasonality impacted 2024, particularly in the third quarter.

Additionally, operating results for the twelve months ended December 31, 2024 may not necessarily be indicative of results to be expected for any year.

• Revenue decreased 2% year-over-year to $824.5 million, which was driven in part by the discontinuation of coverage by UnitedHealthcare of GeneSight and the divestiture of the European EndoPredict business in the prior year.

Volumes increased approximately 1% from the prior year.

• In November 2025, we expanded the MyRisk Hereditary Cancer Test to include 63 genes across 11+ cancer types, further strengthening our comprehensive hereditary cancer offering.

• In October 2025, we announced the addition of two genes, F8 and FXN, to the Foresight Carrier Screen Universal Plus Panel.

• In September 2025, we announced a strategic collaboration with SOPHiA Genetics, Inc.

to develop and provide pharmaceutical companies with an innovative global liquid biopsy companion diagnostic (CDx) test.

• In September 2025, we announced the publication of a new meta-analysis of six prospective controlled studies that included 3,532 adults with major depressive disorder (MDD).

The meta-analysis showed that when GeneSight Psychotropic test results were available to treating clinicians, there were significant improvements in response and remission rates for patients with MDD, compared to treatment as usual.

• In July 2025, we closed a $125 million secured term debt facility with OrbiMed, a leading global healthcare investment firm.

This facility includes an option to borrow up to an additional $75 million.

• In July 2025, we earned the Great Place to Work Certification for the third consecutive year.

• In June 2025, we launched early access to FirstGene Multiple Prenatal Screen, a prenatal genetic risk assessment screen that combines several testing modalities into a single assay, in a large, multi-site study, called CONNECTOR.

• New clinical data supporting the performance and potential clinical utility of our Precise MRD test was presented at major scientific conferences, including the American Association for Cancer Research and the American Society of Clinical Oncology Annual Meeting.

These presentations include data from a prospective pan-cancer study conducted by our partner, the National Cancer Center Hospital East in Japan.

• Effective April 30, 2025, Samraat Raha was appointed President and Chief Executive Officer and Mark Verratti was appointed Chief Operating Officer;

Brian Donnelly was appointed Chief Commercial Officer effective May 1, 2025;

and Benjamin R.

Wheeler was appointed Chief Financial Officer effective August 16, 2025.

The Company has historically experienced some seasonality in its business, including due to factors such as the timing of deductibles resetting or being met.

While the Company continues to experience periodic fluctuations in quarterly revenues, these variations are increasingly influenced by other factors such as the timing of customer activity, reimbursement dynamics, and broader market conditions.

Additionally, we believe operating results for the twelve months ended December 31, 2025 may not necessarily be indicative of results to be expected for any other year.

Components of Consolidated Operations

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gains or losses on the sale of assets or businesses;

and foreign currency gains and losses, realized gain or loss on marketable securities, and other nonrecurring income and expenses.

Income Tax Expense (Benefit).

Income tax expense (benefit) consists of current and deferred components, which include changes in our deferred tax assets, our deferred tax liabilities, and our valuation allowance.

and foreign currency gains and losses, and other nonrecurring income and expenses.

Income Tax (Benefit) Expense.

Income tax (benefit) expense consists of current and deferred components, which include changes in our deferred tax assets, our deferred tax liabilities, and our valuation allowance.

Results of Operations

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Prenatal 186.3 177.1 9.2 5 % 23% 21%

Pharmacogenomics 170.2 138.5 31.7 23 % 20% 18%

Mental Health 144.1 170.2 (26.1) (15) % 17% 20%

Total revenue $ 824.5 $ 837.6 $ (13.1) (2) % 100% 100%

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Prenatal 637 666 (4)%

Pharmacogenomics 507 459 10%

Mental Health 537 507 6%

1,537 1,520 1%

Revenue for the year ended December 31, 2024 increased $84.4 million compared to the prior year due to an increase in the average revenue per test primarily due to changes in contracted price and operational improvements as well as an increase in testing volume across the majority of our products.

Additionally, for the year ended December 31, 2024, we recorded $18.5 million of revenue as a change of estimate related to tests delivered in prior periods as compared to the year ended December 31, 2023, in which we recorded $7.2 million in revenue as a change of estimate related to tests delivered in prior periods.

Additionally, for the year ended December 31, 2024, we recognized $3.0 million in revenue due to a retroactive coverage change by a payor for one of our prenatal products.

Hereditary Cancer revenues increased $36.7 million due to a 6% increase in the average revenue per test and a 5% increase in testing volume.

Pharmacogenomics revenue increased $31.7 million compared to the prior year due primarily to an 11% increase in the average revenue per test, partially due to change in estimated revenue per test related to prior periods, and to a 10% increase in testing volume.

We expect that Pharmacogenomics revenues in 2025 and thereafter will be negatively impacted by UnitedHealthcare's recent change in GeneSight test coverage under its commercial and individual exchange plans and certain managed Medicaid benefit plans.

Prenatal revenues increased $25.8 million due primarily to a 10% increase in the average revenue per test and a 7% increase in testing volume.

Tumor Profiling revenues decreased $9.8 million, primarily driven by declines in volume from MyChoice CDx studies in the current year compared to the prior year period.

Cost of Sales

Revenue for the year ended December 31, 2025 decreased $13.1 million compared to the prior year.

For the year ended December 31, 2024, we recognized $21.5 million of revenue for tests in which the performance obligation was met in a prior period, including $3.0 million in revenue due to a retroactive coverage change by a payor for one of our prenatal products.

For the year ended December 31, 2025, revenue for tests in which the performance obligation was met in a prior period was immaterial.

Mental Health revenue decreased $26.1 million primarily due to a 20% decrease in the average revenue per test.

The decrease in revenue per test is due to UnitedHealthcare's change in GeneSight test coverage under its commercial, individual exchange, and certain managed Medicaid benefit plans, and due to revenue recognized in the prior year for tests in which the performance obligation had been satisfied in a prior period.

We expect this coverage decision will continue to negatively affect Mental Health revenue in future periods.

These impacts were partially offset by a 6% increase in testing volume.

Tumor Profiling revenue decreased $4.1 million due to the sale of our EndoPredict business in August 2024.

This decrease in revenue was partially offset by growth in Prenatal and Hereditary Cancer revenues.

Prenatal revenue increased $9.2 million due to a 10% increase in average revenue per test, partially offset by a 4% decrease in volume primarily driven by a decline in SneakPeek volume.

Hereditary Cancer revenue increased $7.9 million due to a 7% increase in volume, partially offset by a 5% decrease in average revenue per test.

In addition, we expect to discontinue sales of EndoPredict in the United States during the first half of 2026.

Cost of Revenue

Years ended December 31,

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30.1 % 30.1 %

Cost of revenue for the year ended December 31, 2024 increased $16.0 million compared to the prior year due primarily to an increase in testing volumes in Pharmacogenomics, Prenatal and Hereditary Cancer.

Cost of revenue for the year ended December 31, 2025 decreased $4.3 million compared to the prior year due primarily to a reduction in the cost per test for the current period driven by reductions in the cost of laboratory reagents and supplies.

Research and Development Expense

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13.0 % 13.5 %

Research and development expense for the year ended December 31, 2024 increased by $24.7 million compared to the prior year primarily due to additional investments in new products and features including expanded screening for our existing Prenatal products and advancement in the development of our MRD test.

We incurred approximately $11.2 million of additional compensation costs in 2024 than compared to the prior year due to an increase in the average compensation expense per employee and an $8.5 million increase in laboratory expenses.

Research and development expense for the year ended December 31, 2025 decreased by $6.6 million compared to the prior year primarily due to a decrease in compensation related expenses.

We remain committed to disciplined cost management while maintaining investments in key strategic areas, such as research and development.

Sales and Marketing Expense

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34.1 % 33.9 %

Sales and marketing expense decreased $5.1 million for the year ended December 31, 2024 compared to the prior year primarily due to a decrease in compensation expense from a revised commission structure and a decrease in expense from sales events.

Sales and marketing expenses for the year ended December 31, 2025 were relatively consistent with the expenses incurred in the prior year, reflecting stable operating activities across the business.

General and Administrative Expense

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31.1 % 32.9 %

General and administrative expense decreased by $7.8 million for the year ended December 31, 2024 compared to the prior year primarily due to a $14.8 million decrease in expenses associated with our real estate optimization strategy, including a decrease in depreciation expense, facility costs, and expense associated with a lease termination in the prior year.

These decreases were partially offset by a $5.3 million increase in compensation expense.

General and administrative expense for the year ended December 31, 2025 decreased by $19.1 million compared to the prior year primarily due to a decrease of $9.8 million in amortization for previously impaired intangible assets.

The remainder of the change from the prior year is due to immaterial movements across various categories.

Legal Settlements

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Legal settlements as a % of total revenue

(2.5) % 15.0 %

Legal settlements decreased by $134.1 million for the year ended December 31, 2024 compared to the prior year.

In the prior year, we incurred $112.8 million for legal settlements, including $77.5 million related to the securities class action settlement and $34.0 million in connection with the Ravgen settlement.

As part of the Ravgen settlement, we agreed to pay Ravgen $21.3 million if it successfully concluded in its favor all of Ravgen's litigations and patent reexaminations pending at the time of the settlement agreement.

As of the effective date of the settlement in 2023, we determined that the contingent payment was probable and estimable.

In the year ended December 31, 2024, based on updated information, we determined that the payment is no longer probable and reversed the expense related to the contingent payment.

Legal settlements for the year ended December 31, 2024 included the reversal of expense for a contingent payment related to the Ravgen settlement, payment of which was determined to no longer be probable in 2024.

There were no legal settlements in the year ended December 31, 2025.

Goodwill and Long-lived Asset Impairment Charges

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Goodwill and long-lived asset impairment charges as a % of total revenue 38.7 % 6.8 %

Goodwill and long-lived asset impairment charges for the year ended December 31, 2024 included $43.0 million of expense for the impairment of the developed technology intangible asset for our GeneSight test and $12.4 million of losses in connection with the sale of our EndoPredict business.

There were no corresponding impairment charges in the prior year.

Goodwill and long-lived asset impairment charges for the year ended December 31, 2025 included primarily goodwill impairment charges of $234.7 million and intangible asset impairment charges of $82.0 million related to our Women's Health and Mental Health reporting units.

The prior year included $43.0 million of expense for the impairment of the developed technology intangible asset in our Mental Health reporting unit and $13.8 million of losses in connection with the sale of our EndoPredict business.

Other Income (Expense)

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Other expense, net

$ — $ (4.8) $ 4.8 (100) %

Other expense, net decreased $4.8 million for the year ended December 31, 2024 compared to the prior year primarily due to a $2.2 million gain recognized on the February 2024 acquisition of Precise assets and laboratory from Intermountain Health and a $1.5 million loss on the sale of investment securities recognized in the prior year.

Income Tax Expense

$ (7.9) $ — $ (7.9) N/A

Other expense, net for the year ended December 31, 2025 increased $7.9 million as compared to the prior year primarily due to an increase in interest expense related to our new term loan entered into in July 2025.

Income Tax (Benefit) Expense

Years Ended December 31,

(in millions) 2025 2024 Change % Change

Income tax expense $ 3.8 $ 1.1 $ 2.7 245 %

Income tax (benefit) expense

$ (29.2) $ 3.8 $ (33.0) (868) %

Effective tax rate 7.4 % (3.1) %

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Certain significant or unusual items are separately recognized during the period in which they occur and can be a source of variability in the effective tax rates from period to period.

Income tax expense for the year ended December 31, 2024 was $3.8 million and our effective tax rate was (3.1)%.

Income tax benefit for the year ended December 31, 2025 was $29.2 million and our effective tax rate was 7.4%.

Income tax expense for the year ended December 31, 2024 was $3.8 million and our effective tax rate was (3.1)%.

For the year ended December 31, 2024 and 2023, our recognized effective tax rate differs from the U.S.

For the year ended December 31, 2025, our recognized effective tax rate differs from the U.S.

federal statutory rate primarily due to the release of unrecognized tax benefits, recognition of valuation allowances and goodwill impairments.

For the year ended December 31, 2024, our recognized effective tax rate differs from the U.S.

federal statutory rate primarily due to the recognition of valuation allowances.

The unrecognized tax benefits released were primarily related to tax refund claims following the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act.

Following the success of these claims, we remeasured or released the unrecognized benefits resulting in a discrete tax benefit of $29.6 million during the year ended December 31, 2025.

Due to our cumulative loss and the exhaustion of future taxable income from the reversal of taxable temporary differences, our estimated annual effective tax rate for the current year includes a valuation allowance against the majority of the current year increase in deferred tax assets, including any tax-deductible loss from the $319.4 million of goodwill and long-lived impairment charges recorded for the year ended December 31, 2025.

Liquidity and Capital Resources

Our primary sources of liquidity are our cash and cash equivalents, our expected cash flows from operations, and, in certain circumstances as discussed below, amounts available for borrowing under our ABL Facility.

As of December 31, 2024, we had cash and cash equivalents of $102.4 million and our availability under the ABL Facility was $56.0 million.

Our capital deployment strategy focuses on use of resources in the key areas of research and development, technology, and acquisitions.

We believe that investing organically through research and development and new product development or acquisitively to support our business strategy provides the best return on invested capital.

Our ABL Facility has a total maximum principal commitment of $115.0 million.

The ABL Facility requires that we and our subsidiaries guaranteeing the indebtedness, on a consolidated basis, 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, we had $40.5 million outstanding under the ABL Facility.

As of December 31, 2025, we had cash and cash equivalents of $149.6 million and our availability under the Credit Facility was $75.0 million .

Our capital deployment strategy focuses on use of resources in the key areas of research and development, technology, and investment in partnerships and collaborations.

We believe that investing organically through research and development and new product development to support our business strategy provides the best return on invested capital.

On July 31, 2025 (the "Closing Date"), we entered into a Credit Agreement (the "Credit Agreement") with the lenders from time to time party thereto, and OrbiMed Royalty & Credit Opportunities IV, LP., as administrative agent (the "Administrative Agent") and as initial lender.

The Credit Agreement consists of a $200.0 million term loan credit facility with an initial term loan o f $125.0 million (the "Initial Loan"), which amount was funded on the Closing Date, and delayed draw term loans (the "Delayed Draw Loans" and together with the Initial Loan, the "Loans"), at our election on or prior to June 30, 2027, in a maximum principal amount of $75.0 million (the "Credit Facility").

We incurred debt discounts and issuance costs totaling $9.4 million .

These costs are being amortized using the effective interest method.

The proceeds of the Credit Facility were or will be used for our working capital needs and general corporate purposes.

Concurrent with the new Credit Facility, we used $60.2 million of the proceeds to repay our previous debt facility, an asset-based revolving credit facility (the “ABL Facility”), in full and terminated the ABL Facility agreement.

The Credit Facility matures on July 31, 2030 (the "Maturity Date").

Loans outstanding under the Credit Facility bear interest at a rate per annum equal to (x) the greater of the one-month Secured Overnight Financing Rate (SOFR) Rate and 2.5% plus (y) an applicable margin of 6.5% .

All repayments are subject to the accrued exit fee.

Commencing on September 30, 2029, and on the last business day of each fiscal quarter thereafter, we are required to make a scheduled principal payment equal to 2.5% of the unpaid principal amount of the loans outstanding on the fourth anniversary of the Closing Date, together with any applicable exit fee.

We may elect to prepay all or a portion of the amounts owed prior to the Maturity Date subject to a repayment premium, in addition to the exit fee.

Any undrawn amount of the Delayed Draw Loans bears a fee of 0.5% based on the amount that remains undrawn through June 30, 2027.

The interest rate for borrowings under the Credit Agreement as of December 31, 2025 was 10.4%.

The Credit Facility is also subject to customary mandatory prepayments with the proceeds of indebtedness and certain asset sales and casualty events.

In addition to the exit fee and repayment premium referenced above, voluntary and mandatory prepayments and all other payments of the Credit Facility must also be accompanied by payment of accrued interest on the principal amount repaid or prepaid.

The Credit Facility is also subject to other customary fee arrangements.

Our obligations are guaranteed by certain of our material subsidiaries (the “Credit Facility Guarantors”) pursuant to a Guarantee.

Our obligations and the Credit Facility Guarantors under the Credit Agreement and Guarantee are secured by substantially all of our assets and the Credit Facility Guarantors under a Pledge and Security Agreement entered into with the Administrative Agent.

The Credit Facility requires us and our subsidiaries, on a consolidated basis, to comply with a minimum trailing twelve-month revenue test as of the end of each month, commencing with the month ending December 31, 2025 at $615.0 million and increasing quarterly to $974.0 million beginning on December 31, 2029 and thereafter.

In addition, the Credit Facility contains customary representations and warranties and affirmative and negative covenants, including covenants that limit or restrict us and our subsidiaries’ ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements.

The Credit Facility includes a number of customary events of default, including, among other things, nonpayment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and the occurrence of a change of control.

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 Credit Facility may become due and payable immediately.

As of December 31, 2025, we were in compliance with all covenants under the Credit Agreement.

We believe that our existing capital resources will be sufficient to meet our projected operating requirements for at least the next 12 months.

Our available capital resources, however, may be consumed more rapidly than currently expected, or may be insufficient for our business needs for many reasons, including as a result of our operational cash needs, capital expenditures, and litigation related costs not covered by, or above the limits set forth in, our insurance.

In addition, we are subject to covenants under our ABL Facility which could limit our ability to incur additional indebtedness or impact our ability to pursue other financing.

If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our ABL Facility and we are unable to secure additional funds on acceptable terms, or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations;

In addition, we are subject to covenants under our Credit Facility which could limit our ability to incur additional indebtedness or impact our ability to pursue other financing.

If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our Credit Facility and we are unable to secure additional funds on acceptable terms, or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations;

or delay development of our tests in an effort to provide sufficient funds to continue our operations.

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From time to time, we enter into purchase commitments or other agreements that may materially impact our liquidity position in future periods.

In April 2024, we entered into an amendment of our lease in west Salt Lake City, Utah to include approximately 63,000 additional square feet.

The amendment has a term of 12 years and is expected to commence in fiscal year 2026 with future rent payments totaling approximately $18.2 million.

Future rent payments remaining under the lease and the amendment total $94.3 million payable over the next 14 years.

In December 2024, we entered into an agreement to purchase information technology between January 2025 through December 2027, with minimum total commitment of $10.5 million over that time period.

Third-party payors, including state and federal health care programs such as Medicare, managed care organizations, and other private health insurers, are increasingly attempting to contain health care costs by limiting or denying coverage for certain tests and reducing reimbursement rates for both new and existing tests.

We have experienced and may continue to experience coverage limitations or denials for many of our products.

For example, UnitedHealthcare updated its medical policies for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial and individual exchange benefit plans and certain managed Medicaid benefit plans, effective during the first half of 2025.

For the year ended December 31, 2024, we recognized approximately $45.0 million of revenue for GeneSight testing from UnitedHealthcare, consisting of approximately $40.0 million for UnitedHealthcare commercial and approximately $5.0 million for impacted UnitedHealthcare managed Medicaid plans.

We anticipate that the change in UnitedHealthcare coverage will negatively impact our revenue, profitability, and cash flow in 2025 and thereafter.

The following table represents the balances of cash, cash equivalents and marketable investment securities as of the dates set forth in the table below:

For example, UnitedHealthcare updated its medical policies for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial, individual exchange and certain managed Medicaid benefit plans, effective during 2025.

The change in UnitedHealthcare coverage has negatively impacted our Mental Health revenue, profitability, and cash flow in 2025 and we expect that these negative impacts will continue into future periods.

The following table represents the balances of cash and cash equivalents as of the dates set forth in the table below:

(in millions) December 31,

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Cash and cash equivalents $ 149.6 $ 102.4 $ 47.2

Marketable investment securities — 8.8 (8.8)

Cash, cash equivalents and marketable investment securities $ 102.4 $ 140.9 $ (38.5)

The decrease in cash, cash equivalents and marketable investment securities as of December 31, 2024 as compared to December 31, 2023 was primarily driven by $8.7 million in cash used by operations, $19.0 million in cash used for capital expenditures, $10.7 million in cash used for the capitalization of internal-use software, and $7.5 million in cash used for the payment of withholding tax for the issuance of common stock, net of proceeds from the issuance of common stock.

The decrease in cash was partially offset by $8.8 million in cash received from the sale of our EndoPredict business.

The increase in cash and cash equivalents as of December 31, 2025 as compared to December 31, 2024 was primarily driven by a net increase in cash proceeds from borrowings of $75.9 million partially offset by $27.4 million in cash used for capital expenditures including the capitalization of internal-use software.

The following table represents the Consolidated Cash Flow Statement for the periods presented:

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(in millions) 2025 2024 Change

Cash flows used in operating activities $ (8.7) $ (110.9) $ 102.2

Cash flows provided by (used in) investing activities (11.9) 31.9 (43.8)

Cash flows provided by (used in) operating activities

$ 1.8 $ (8.7) $ 10.5

Cash flows used in investing activities

(27.4) (11.9) (15.5)

Cash flows provided by (used in) financing activities 64.2 (7.4) 71.6

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Cash Flows from Operating Activities

We used $102.2 million less of cash for operating activities for the twelve months ended December 31, 2024 compared to the prior year.

Cash used for operating activities for the year ended December 31, 2023 included $82.8 million of payments for legal settlements.

In addition, our core operations have improved in the current year driven by an 11% increase in revenue and a 7% decrease in expenses as a percentage of revenue, excluding non-cash expenses for goodwill and long-lived asset impairment charges and accrued legal settlements.

In the year ended December 31, 2023, we received $16.3 million in tenant improvement allowance reimbursements that did not reoccur for the year ended December 31, 2024.

Our cash flows from operating activities increased $10.5 million for the twelve months ended December 31, 2025 compared to the prior year.

The change in cash provided by operating activities was primarily driven by changes in working capital.

Cash Flows from Investing Activities

The increase in cash flows used in investing activities for the twelve months ended December 31, 2024 compared to the cash flows provided by investing activities in the same period in the prior year was primarily due to the $96.2 million decrease in cash flows from maturities and sales of marketable investment securities compared to the prior year, partially offset by a $44.2 million decrease in capital expenditures in the current period in connection with the completion of the build-out of new facilities in the prior year and the $8.8 million received from the sale of our EndoPredict business in 2024.

We used $15.5 million more cash for investing activities for the twelve months ended December 31, 2025 compared to the prior year.

In fiscal year 2024, we had cash inflows from the maturities of investments and the sale of our EndoPredict business, which did not occur in 2025.

Cash Flows from Financing Activities

The increase in cash flows used in financing activities for the twelve months ended December 31, 2024 compared to cash flows provided by financing activities in the same period in the prior year was primarily due to proceeds of $117.6 million from the underwritten public offering and the initial borrowing on our line of credit of $40 million that occurred in the twelve months ended December 31, 2023, which did not reoccur during the twelve months ended December 31, 2024.

Cash flows from financing activities increased $71.6 million for the twelve months ended December 31, 2025 compared to the prior year, primarily due to an increase of cash proceeds from our new Credit Facility, partially offset by the repayment of our prior ABL Facility, debt issuance costs related to the term loan, and release of cash held in escrow.

Effects of Inflation

While inflation returned to more moderate levels in 2024, inflation has had, and may continue to have, an impact on the labor costs we incur to attract and retain qualified personnel, costs to generate sales and produce testing results, and costs of laboratory supplies.

Inflationary costs have previously impacted our profitability and may continue to adversely affect our business, financial condition and results of operations.

In addition, increased inflation has had, and may continue to have, an effect on interest rates.

An increase in interest rates in the future may adversely affect our borrowing rate and our ability to obtain, or the terms under which we can obtain, additional funding.

Inflation has not had a material impact on our results of operations or financial position for the periods presented.

While we have experienced general cost increases consistent with broader inflationary trends, these increases have not significantly affected our operating results.

If inflation were to increase, it may negatively impact our profitability and may adversely affect our business, financial condition and results of operations.

In addition, higher inflationary pressures may contribute to higher interest rates, which could increase our borrowing costs or affect the terms and availability of future financing.

Furthermore, to the extent tariffs imposed by the United States affect our costs, we may not be able to pass on any portion of the cost increase to our customers.

Critical Accounting Estimates

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An estimate of transaction price does not include any estimated amount of variable consideration that is constrained.

In addition, we consider all the information (historical, current, and forecast) that is reasonably available to identify possible consideration amounts.

In determining the expected value, we consider the probability of the variable consideration for each possible scenario.

In addition, we consider all the information (historical, current, and forecast) that is reasonably available in determining the estimate of transaction price.

We have significant experience with historical discount patterns and we use this experience to estimate transaction prices.

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We reserve 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.

Cash collections for certain tests delivered may differ from estimated rates 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, we update our estimate of the amounts to be recognized for previously delivered tests.

For example, during the year ended December 31, 2024, we recognized $18.5 million in revenue, or 2% of revenue, in which the performance obligation of delivering the test results was met in prior periods.

Intangible Assets.

We review our intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

Intangible assets are initially recorded at their acquisition date fair value and are subsequently amortized over their useful lives.

During the fourth quarter of 2024, UnitedHealthcare announced that it would no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial, individual exchange, and certain managed Medicaid plans, effective during the first half of 2025, which caused us to perform a recoverability test for the Pharmacogenomics asset group during the fourth quarter of 2024.

We 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 us 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 approach considered projected revenue, including the impact of the change in coverage by UnitedHealthcare, profitability associated with the developed technology, discount rates reflective of the risk-adjusted cost of capital of 10.0% and the expected remaining useful life of the developed technology.

As the carrying value for the developed technology asset exceeded the relative fair value, we recognized an impairment charge of $43.0 million during the year ended December 31, 2024, related to the developed technology intangible asset, 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.

We test goodwill for impairment by reporting unit on an annual basis and in the interim if events and circumstances indicate that goodwill may be impaired.

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While we use the best available information to prepare our cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances.

While there are always changes in assumptions to reflect changing business and market conditions, our overall methodology used has remained unchanged.

While changes in assumptions will occur to reflect changing business and market conditions, our overall methodology used has remained unchanged.

Changes in our forecasts or decreases in the value of our common stock could cause book value of reporting units to exceed their fair values.

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.

As of December 31, 2024 , we have recorded goodwill of $286.3 million on our Consolidated Balance Sheets.

This goodwill is attributable to the Pharmacogenomics, International, and Women's Health reporting units.

As noted above, UnitedHealthcare announced that it would no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test.

As a result, the Company performed a quantitative impairment review of 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.

We measured the fair value of the Pharmacogenomics reporting unit utilizing the market approach and the discounted cash flow method under the income approach.

The income approach considered projected revenue, taking into account the impact of the change in GeneSight coverage by UnitedHealthcare, and the projected profitability of the reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 10.0%.

The resulting fair value of the Pharmacogenomics reporting unit exceeded its carrying value by 43.6%.

During the quarter ended June 30, 2025, we identified a triggering event had occurred based on a sustained decline in our market capitalization, due in part to downward revisions to the Company's forecasts, which resulted in us performing quantitative goodwill impairment testing on all of our reporting units.

The quantitative assessments performed during the quarter ended June 30, 2025, resulted in a total goodwill impairment charge of $234.7 million, which includes impairment charges of $143.5 million and $91.2 million related to our Women's Health and Mental Health (formerly referred to as the Pharmacogenomics) reporting units, respectively, which are included in Goodwill and long-lived asset impairment charges in the Consolidated Statements of Operations.

We measured the fair value of the Mental Health and Women's Health reporting units utilizing the market approach and the discounted cash flow method under the income approach.

The income approach considered projected revenue and profitability associated with each reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 17.0% and 16.0% for the Mental Health and Women's Health reporting units, respectively.

We measured the fair value of the International reporting unit utilizing the market approach and the discounted cash flow method under the income approach.

The income approach considered management’s business plans and projections as the basis for expected cash flows and a discount rate reflective of the risk-adjusted cost of capital of 10.5%.

The income approach considered projected revenue and profitability associated with the reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 16.0%.

The resulting fair value of the International reporting unit exceeded its carrying value by 145.7%.

We measured the fair value of the Women's Health reporting unit utilizing the market approach and the discounted cash flow method under the income approach.

The income approach considered projected revenue and profitability associated with reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 10.5%.

The resulting fair value of the Women's Health reporting unit exceeded its carrying value by 82.0%.

Additionally, we corroborated the reasonableness of the estimated reporting unit fair values by reconciling them to our enterprise value and market capitalization.

Additionally, we corroborated the reasonableness of the estimated reporting unit fair values by reconciling them to our enterprise value and market capitalization as of May 2025.

Considerable management judgment is necessary to estimate expected future cash flows for our reporting units, including evaluating the impact of operational and external economic factors on our future cash flows, all of which are subject to uncertainty.

The assumptions and estimates used in determining the fair value of our reporting units involve significant elements of subjective judgment and analysis by management.

Certain future events and circumstances, including a higher cost of capital or a decline in actual and expected revenues or profitability, among others, could result in changes to these assumptions and judgments.

A revision of these estimates and assumptions could cause the fair values of the reporting units to fall below their respective carrying values, resulting in impairment charges, which could have a material adverse effect on our results of operations.

We will continue to monitor our reporting units for any triggering events or other signs of impairment which could result in impairment charges in the future.

We qualitatively evaluated our reporting units for impairment for our annual goodwill impairment testing in October 2025.

The factors that are considered in the qualitative analysis include macroeconomic conditions, industry and market considerations, revenue growth rates, current and expected financial performance, other factors that would have a negative effect on earnings and cash flows, and other relevant entity-specific events and information.

Significant judgment is required in assessing the weight of the qualitative factors.

We noted no indicators of impairment during our annual testing.

The remaining goodwill balance as of December 31, 2025 of $51.6 million consists of $29.8 million for the Mental Health, $17.3 million for the International and $4.5 million for the Women's Health reporting units.

Intangible Assets.

Intangible assets are initially recorded at their acquisition date fair value and are subsequently amortized over their useful lives.

We review our intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

During the second quarter ended June 30, 2025, we identified an impairment triggering event had occurred based on a sustained decline in our market capitalization, due in part to downward revisions to the Company's forecasts.

We performed the recoverability test by comparing the carrying value of certain of our asset groups to their estimated undiscounted future cash flows.

The analysis indicated that the carrying value exceeded the recoverable amount for certain of our asset groups, requiring us to determine the fair value of those groups.

The fair value of our Mental Health developed technology intangible asset was determined using a discounted cash flow model.

The approach considered projected revenue, profitability associated with the developed technology, a discount rate reflective of the risk-adjusted cost of capital of 17% and the expected remaining useful life of the developed technology.

As the carrying value for the developed technology intangible asset exceeded the relative fair value, we recognized impairment charges of $71.8 million during the second quarter ended June 30, 2025, which is included in Goodwill and long-lived asset impairment charges in the Consolidated Statements of Operations.

The net book value of the developed technology was $11.2 million as of December 31, 2025.

The fair value of the intangible assets recognized from our acquisition of Gateway Genomics, LLC, or Gateway, including developed technology, trademark and customer relationship intangible assets, was determined using a discounted cash flow model and relief from royalty models.

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 16%.

The primary assumptions used in the relief from royalty models were projected revenue and royalty rates.

As the carrying value of each of the intangible assets exceeded the relative fair value, we recognized a total impairment charge of $10.2 million associated with the asset group during the year ended December 31, 2025, which is included in Goodwill and long-lived asset impairment charges in the Consolidated Statements of Operations.

The net book value of the Gateway intangible assets is immaterial as of December 31, 2025.

The assumptions and estimates used in determining the fair value of our intangible assets involve significant elements of subjective judgment and analysis by management.

Certain future events and circumstances, including higher cost of capital or a decline in actual and expected revenues or profitability, could result in changes to these assumptions and judgments.

A revision of these estimates and assumptions could cause the fair values of the intangible assets to fall below their respective carrying values, resulting in impairment charges, which could have a material adverse effect on our results of operations.

We will continue to monitor our intangible assets for any triggering events or other signs of impairment, which could result in impairment charges in the future.

Income Taxes .

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

What changed 10-K

Item 7. Management’s Discussion and Analysis