What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 87 added, 89 removed, 229 unchanged (43% of the section changed)

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Financial Overview

Key highlights of the six months ended June 30, 2025 consolidated financial results include the following:

Key highlights of the nine months ended September 30, 2025 consolidated financial results include the following:

Revenue of Gross profit of

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compared to $389.9 M at December 31, 2024

• Revenue was comprised of $25.2 million in instrument revenue, $39.0 million in consumables revenue and $12.7 million in service and other revenue during the six months ended June 30, 2025.

Revenue was comprised of $33.7 million in instrument revenue, $33.0 million in consumables revenue and $8.1 million in service and other revenue during the six months ended June 30, 2024.

• Revenue was comprised of $36.5 million in instrument revenue, $60.3 million in consumables revenue and $18.6 million in service and other revenue during the nine months ended September 30, 2025.

Revenue was comprised of $50.5 million in instrument revenue, $51.6 million in consumables revenue and $12.7 million in service and other revenue during the nine months ended September 30, 2024.

The increase was primarily due to higher consumable sales, Vega unit sales, and service and other revenue, partially offset by lower Revio unit sales.

• Gross profit decreased during the six months ended June 30, 2025 compared to the same period of 2024.

Restructuring-related charges of $12.4 million during the six months ended June 30, 2025 compared to $4.6 million for the same period of 2024 were partially offset by an increase in gross profit driven by growth in consumable revenue.

• Gross profit increased during the nine months ended September 30, 2025 compared to the same period of 2024.

The increase was primarily driven by growth in consumable revenue and lower cost of product revenue, partially offset by restructuring-related charges of $12.4 million during the nine months ended September 30, 2025 compared to $4.4 million for the same period of 2024.

Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Gross margins may be affected by product mix, manufacturing efficiencies, warranty cost improvements, average selling price fluctuations, future product launches, changes to inventory reserves, costs of raw materials, and tariffs.

Gross margins may be affected by product mix, manufacturing efficiencies, changes in warranty costs, average selling price fluctuations, future product launches, changes to inventory reserves, costs of raw materials, and tariffs.

Q3 Fiscal 2025 Form 10-Q

• Loss from operations increased $216.6 million during the six months ended June 30, 2025, compared with the same period of 2024, primarily due to a $212.7 million increase in operating expenses.

• Loss from operations increased $191.4 million during the nine months ended September 30, 2025, compared with the same period of 2024, primarily due to a $193.4 million increase in operating expenses.

This increase included $382.4 million of restructuring-related costs, comprised primarily of $359.3 million in accelerated amortization of acquired intangibles, $15.0 million of impairment charges, and $4.8 million of employee separation costs.

By contrast, restructuring-related charges totaled $20.3 million in the prior-year period.

These increases in restructuring-related costs were partially offset by a $78.2 million decrease in impairment charges, an $18.6 million change in fair value of contingent consideration, and reductions in research and development and sales, general and administrative expenses due to headcount and related cost savings from the restructuring.

• Cash, cash equivalents, and short-term investments were $314.7 million at June 30, 2025, which represents a 19% decrease compared to the balance at December 31, 2024.

These increases in restructuring-related costs were partially offset by a $78.2 million decrease in impairment charges, a $19.8 million change in fair value of contingent consideration, and reductions in research and development and sales, general and administrative expenses due to headcount and related cost savings from the restructuring.

• Cash, cash equivalents, and short-term investments were $298.7 million at September 30, 2025, which represents a 23% decrease compared to the balance at December 31, 2024.

The sales cycle for Revio instrument purchases continues to be elongated.

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However, these estimates could change in future periods based on events or changes in circumstances, which could result in material future impairment charges.

We recorded $15.0 million of impairment charges during the six months ended June 30, 2025.

We recorded $15.0 million of impairment charges during the nine months ended September 30, 2025.

See additional discussion below in Results of Operations, as well as Note 3.

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RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2025 and 2024

Three Months Ended June 30,

Comparison of the Three Months Ended September 30, 2025 and 2024

Three Months Ended September 30,

(In thousands, except percentages)

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Loss on purchase commitment

24 998 (974) (98 %)

Total cost of revenue 22,540 29,963 (7,423) (25 %)

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Sales, general and administrative 31,099 43,746 (12,647) (29) %

Impairment charges — 93,200 (93,200) (100) %

Amortization of acquired intangible assets 833 3,649 (2,816) (77) %

Change in fair value of contingent consideration — 1,170 (1,170) (100) %

Total operating expense 54,778 74,081 (19,303) (26 %)

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Total Revenue

Total revenue increased $3.8 million, or 10%, for the second quarter of 2025 compared with the same quarter of 2024.

Product revenue increased $1.3 million, or 4%, primarily due to an increase of $1.9 million, or 11%, in consumable revenue, partially offset by a decrease of $0.5 million, or 4%, in instrument revenue.

Total revenue decreased $1.6 million, or 4%, for the third quarter of 2025 compared with the same quarter of 2024.

Product revenue decreased $2.7 million, or 8%, primarily due to a decrease of $5.5 million, or 33%, in instrument revenue, partially offset by an increase of $2.8 million, or 15%, in consumable revenue.

Service and other revenue increased $1.1 million, or 25%, primarily driven by an increase in Revio service contracts.

Instrument Revenue

Instrument revenue decreased for the second quarter of 2025, primarily due to a lower number of Revio systems sold—15 units compared to 24 units in the same quarter of 2024.

Instrument revenue decreased for the third quarter of 2025, primarily due to a lower number of Revio systems sold—13 units compared to 22 units in the same quarter of 2024.

This decline primarily reflects variability in customer purchasing behavior resulting from uncertainty surrounding the funding for new capital equipment, particularly among academic and research institutions.

The decrease was partially offset by sales of the Vega system, with 38 units sold during the second quarter of 2025 following its commercial launch in the fourth quarter of 2024.

The decrease was partially offset by sales of the Vega system, with 32 units sold during the third quarter of 2025 following its commercial launch in the fourth quarter of 2024.

We expect that instrument revenue may fluctuate quarter-to-quarter based on timing of customer purchasing decisions, sales mix, and funding dynamics.

Consumables Revenue

The increase in consumables revenue for the second quarter of 2025 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base.

Initial shipments of Vega consumables also contributed modestly during the period, and we anticipate increased contributions as customers begin ramping usage of the Vega platform and the installed base expands.

The increase in consumables revenue for the third quarter of 2025 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base.

Shipments of Vega consumables also contributed modestly during the period, and we anticipate increased contributions as customers begin ramping usage of the Vega platform and the installed base expands.

Looking ahead, we expect continued growth in consumables revenue as adoption of the Revio and Vega platforms expands.

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Cost of Revenue and Gross Profit

Total cost of revenue decreased $5.0 million, or 17%, in the second quarter of 2025 compared to the same quarter of 2024 due to a decrease in cost of product revenue and a decrease of $2.4 million in amortization attributable to acquired intangible assets that are related to sales generating activities.

Total cost of revenue included share-based compensation expense of $0.9 million and $1.1 million during the second quarter of 2025 and 2024, respectively.

Cost of product revenue decreased $3.1 million, or 13%, in the second quarter of 2025 compared to the same quarter of 2024 primarily due to lower restructuring-related charges.

Restructuring charges during the three months ended June 30, 2025 were not significant.

During the three months ended June 30, 2024 we incurred restructuring-related charges of $4.6 million, which included charges for excess inventory due to a decrease in internal demand relating to the expense reduction initiatives.

Gross profit increased $8.7 million, or 147%, in the second quarter of 2025 compared to the same quarter of 2024 driven by lower cost of revenue and higher consumables sales.

Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about restructuring activities.

Total cost of revenue decreased $7.4 million, or 25%, in the third quarter of 2025 compared to the same quarter of 2024 primarily due to a decrease in cost of product revenue and a decrease of $3.0 million in amortization attributable to acquired intangible assets that are related to sales generating activities.

Total cost of revenue included share-based compensation expense of $0.9 million and $1.2 million during the third quarter of 2025 and 2024, respectively.

Cost of product revenue decreased $4.1 million, or 18%, in the third quarter of 2025 compared to the same quarter of 2024 primarily due to a shift in product mix to lower cost instruments.

Gross profit increased $5.9 million, or 59%, in the third quarter of 2025 compared to the same quarter of 2024 driven primarily by lower cost of revenue and higher consumables sales.

Research and Development Expense

Research and development expense decreased by $16.0 million, or 41%, for the second quarter of 2025, compared to the same quarter of 2024.

The decrease was primarily driven by a decrease in personnel and related expenses due to restructuring activities, as well as the transition of launched products from development to commercialization.

Research and development expense included share-based compensation expense of $3.3 million and $4.6 million during the second quarter of 2025 and 2024, respectively.

Research and development expense decreased by $2.7 million, or 10%, for the third quarter of 2025, compared to the same quarter of 2024.

The decrease was primarily driven by decreases in personnel and related expenses, including share-based compensation.

Research and development expense included share-based compensation expense of $3.1 million and $4.7 million during the third quarter of 2025 and 2024, respectively.

Sales, General, and Administrative Expense

Sales, general and administrative expense decreased by $9.7 million, or 21%, for the second quarter of 2025, compared to the same quarter of 2024.

The decrease was primarily due to a net decrease in personnel and related expenses due to restructuring activities.

Sales, general, and administrative expense included share-based compensation expense of $7.7 million and $11.5 million during the second quarter of 2025 and 2024, respectively.

Impairment Charges

We recognized no impairment charge during the second quarter of 2025 and a goodwill impairment charge of $93.2 million during the second quarter of 2024.

This charge was primarily attributable to a sustained decline in our stock price and revisions to the timing of expected future cash flows relative to our initial long-term plan, reflecting the continued impact of longer-than-anticipated median sales cycles and other contributing factors.

These developments indicated that the fair value of the reporting unit may have been less than its carrying amount, prompting the performance of an interim goodwill impairment test.

The results of the test confirmed that the carrying amount of the reporting unit exceeded its estimated fair value.

Sales, general and administrative expense decreased by $12.6 million, or 29%, for the third quarter of 2025, compared to the same quarter of 2024.

The decrease was primarily due to $6.9 million of restructuring charges recorded in the third quarter of 2024 and a decrease in share-based compensation expense.

Sales, general, and administrative expense included share-based compensation expense of $7.0 million and $12.3 million during the third quarter of 2025 and 2024, respectively.

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets included in operating expenses for the second quarter of 2025 and 2024 consists of amortization expense attributable to acquired intangible assets that are not directly related to sales generating activities.

Q2 Fiscal 2025 Form 10-Q

Amortization of acquired intangible assets included in operating expenses for the third quarter of 2025 and 2024 consists of amortization expense attributable to acquired intangible assets that are not directly related to sales generating activities.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration during the third quarter of 2024 represents the remeasurement impact of contingent consideration due upon the achievement of a milestone.

Interest Expense

Interest expense for the second quarter of 2025 and 2024 was primarily comprised of interest on the convertible senior notes.

Interest expense for the third quarter of 2025 and 2024 was primarily comprised of interest on the convertible senior notes.

The decrease was due to lower convertible notes balances as a result of the notes exchange transaction in November 2024.

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Other Income, Net

Other income, net for the second quarter of 2025 decreased compared to the same quarter of 2024 primarily driven by lower investment income due to lower cash and investment balances.

Other income, net for the third quarter of 2025 decreased compared to the same quarter of 2024 primarily driven by lower investment income due to lower cash and investment balances.

Q3 Fiscal 2025 Form 10-Q

Comparison of the Six Months Ended June 30, 2025 and 2024

Six Months Ended June 30,

Comparison of the Nine Months Ended September 30, 2025 and 2024

Nine Months Ended September 30,

(In thousands, except percentages)

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(505,889) (312,222) (193,667) 62 %

Income tax benefit (267) — (267) —

Income tax provision

Net loss $ (506,005) $ (312,222) $ (193,783) 62 %

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Total Revenue

Total revenue increased $2.1 million, or 3%, during the six months ended June 30, 2025 compared with the same period of 2024.

Total revenue increased $0.6 million during the nine months ended September 30, 2025 compared with the same period of 2024.

Product revenue decreased $5.3 million, or 5%, primarily due to a decrease of $14.0 million, or 28%, in instrument revenue, partially offset by an increase of $8.7 million, or 17%, in consumable revenue.

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Instrument Revenue

Instrument revenue decreased during the six months ended June 30, 2025, primarily due a lower number of Revio systems sold—27 units compared to 52 units in the same period of 2024.

Instrument revenue decreased during the nine months ended September 30, 2025, primarily due a lower number of Revio systems sold—40 units compared to 74 units in the same period of 2024.

The decrease was partially offset by sales of the Vega system, with 66 units sold during the six months ended June 30, 2025 following its commercial launch in the fourth quarter of 2024.

The decrease was partially offset by sales of the Vega system, with 98 units sold during the nine months ended September 30, 2025 following its commercial launch in the fourth quarter of 2024.

We expect that instrument revenue may fluctuate quarter-to-quarter based on timing of customer purchasing decisions, sales mix, and funding dynamics.

Consumables Revenue

The increase in consumables revenue during the six months ended June 30, 2025 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base.

The increase in consumables revenue during the nine months ended September 30, 2025 was primarily driven by higher Revio consumables sales, reflecting the continued expansion of the Revio instrument installed base.

Looking ahead, we expect continued growth in consumables revenue as adoption of the Revio and Vega platforms expands.

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Cost of Revenue and Gross Profit

Total cost of revenue increased $6.0 million, or 10%, during the six months ended June 30, 2025, compared to the same period of 2024 primarily due to an increase in restructuring-related charges.

These charges were $12.4 million during the six months ended June 30, 2025, which included $3.8 million relating to loss on purchase commitments which is based on an estimate of future excess inventory related to supply agreements for which we do not expect to have related sales.

Total cost of revenue decreased $1.4 million, or 2%, during the nine months ended September 30, 2025, compared to the same period of 2024 primarily due to decreases in cost of product revenue, amortization of acquired intangible assets, and share-based compensation expense.

These decreases were partially offset by an increase in restructuring-related charges.

We recorded $12.4 million during the nine months ended September 30, 2025, which included $3.9 million relating to loss on purchase commitments which is based on an estimate of future excess inventory related to supply agreements for which we do not expect to have related sales.

Restructuring-related charges were $4.4 million for the same period of 2024.

Total cost of revenue included share-based compensation expense of $2.1 million and $3.2 million during the six months ended June 30, 2025 and 2024, respectively.

Gross profit decreased $3.9 million, or 23%, during the six months ended June 30, 2025, compared to the same period of 2024 driven by the increase in cost of revenue from restructuring activities partially offset by an increase in gross profit driven by growth in consumable revenue.

Total cost of revenue included share-based compensation expense of $3.0 million and $4.5 million during the nine months ended September 30, 2025 and 2024, respectively.

Cost of product revenue decreased $3.2 million, or 5%, during the nine months ended September 30, 2025, compared to the same period of 2024 primarily due to a shift in product mix to lower cost instruments.

Gross profit increased $2.0 million, or 7%, during the nine months ended September 30, 2025, compared to the same period of 2024 driven primarily by growth in consumable revenue which was partially offset by an increase in restructuring-related charges.

Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about restructuring activities.

Research and Development Expense

Research and development expense decreased by $30.4 million, or 37%, during the six months ended June 30, 2025, compared to the same period of 2024.

Research and development expense included share-based compensation expense of $5.9 million and $10.4 million during the six months ended June 30, 2025 and 2024, respectively.

Research and development expense decreased by $33.0 million, or 31%, during the nine months ended September 30, 2025, compared to the same period of 2024.

The decrease was primarily driven by a decrease in personnel and related expenses, including share-based compensation expense, lower product development costs due to the transition of launched products from development to commercialization, and lower restructuring-related charges.

We recorded $2.7 million of restructuring-related charges during the nine months ended September 30, 2025 compared to $5.9 million for the same period of 2024.

Research and development expense included share-based compensation expense of $9.0 million and $15.1 million during the nine months ended September 30, 2025 and 2024, respectively.

Sales, General, and Administrative Expense

Sales, general and administrative expense decreased by $13.3 million, or 15%, during the six months ended June 30, 2025, compared to the same period of 2024.

The decrease was primarily due to a net decrease in personnel and related expenses due to restructuring activities.

Sales, general, and administrative expense included share-based compensation expense of $13.1 million and $23.1 million during the six months ended June 30, 2025 and 2024, respectively.

Sales, general and administrative expense decreased by $25.9 million, or 19%, during the nine months ended September 30, 2025, compared to the same period of 2024.

The decrease was primarily due to a decrease in personnel and related expenses, including share-based compensation expense, and lower restructuring-related charges.

We recorded $5.5 million of restructuring-related charges during the nine months ended September 30, 2025 compared to $14.4 million for the same period of 2024.

Sales, general, and administrative expense included share-based compensation expense of $20.1 million and $35.4 million during the nine months ended September 30, 2025 and 2024, respectively.

Impairment Charges

We recorded impairment charges of $15.0 million during the six months ended June 30, 2025, related to in-process research and development (“IPR&D”).

We recorded impairment charges of $15.0 million during the nine months ended September 30, 2025, related to in-process research and development (“IPR&D”).

These charges resulted from an interim impairment assessment performed in response to identified indicators of impairment during the period.

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Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

We recognized a goodwill impairment charge of $93.2 million during the six months ended June 30, 2024.

This charge was primarily driven by a sustained decrease in our stock price and changes in the timing of expected future cash flows relative to our initial long-term plan, reflecting the ongoing impact of longer-than-anticipated median sales cycles and other contributing factors.

We recognized a goodwill impairment charge of $93.2 million during the nine months ended September 30, 2024.

This charge was primarily driven by a sustained decrease in our stock price and changes in the timing of expected future cash flows under our long-term plan, reflecting the ongoing impact of longer-than-anticipated median sales cycles and other contributing factors.

These conditions indicated that the fair value of the reporting unit may have been less than its carrying amount, prompting the performance of an interim goodwill impairment test.

The results of the test confirmed that the reporting unit’s carrying amount exceeded its estimated fair value.

Q3 Fiscal 2025 Form 10-Q

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets during the six months ended June 30, 2025 included $359.3 million of accelerated amortization related to developed technology from the 2021 Omniome acquisition, reflecting our revised estimate that the asset will no longer generate economic benefit beyond March 31, 2025.

Amortization of acquired intangible assets during the nine months ended September 30, 2025 included $359.3 million of accelerated amortization related to developed technology from the 2021 Omniome acquisition, reflecting our revised estimate that the asset will no longer generate economic benefit beyond March 31, 2025.

We expect significantly lower amortization expense in future periods.

Q2 Fiscal 2025 Form 10-Q

Change in Fair Value of Contingent Consideration

We recognized a change in fair value of contingent consideration of $18.7 million during the six months ended June 30, 2025, resulting in a contingent consideration liability of $0.

Change in fair value of contingent consideration during the nine months ended September 30, 2024 represents the remeasurement impact of contingent consideration due upon the achievement of a milestone.

We recognized a change in fair value of contingent consideration of $18.7 million during the nine months ended September 30, 2025, resulting in a contingent consideration liability of $0.

This was primarily due to management's decision to cease development of the high-throughput short-read system, the associated changes in expected future revenues, and the requirement that the milestone event occur prior to the five-year anniversary of the acquisition closing date.

Interest Expense

Interest expense during the six months ended June 30, 2025 and 2024 was primarily comprised of interest on the convertible senior notes.

Interest expense during the nine months ended September 30, 2025 and 2024 was primarily comprised of interest on the convertible senior notes.

The decrease was due to lower convertible notes balances as a result of the notes exchange transaction in November 2024.

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Other Income, Net

Other income, net during the six months ended June 30, 2025 decreased compared to the same period of 2024 primarily driven by lower investment income due to lower cash and investment balances.

Other income, net during the nine months ended September 30, 2025 decreased compared to the same period of 2024 primarily driven by lower investment income due to lower cash and investment balances.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2025, we had cash, cash equivalents and investments of $314.7 million compared to $389.9 million as of December 31, 2024.

We believe that our existing cash, cash equivalents and investments will be sufficient to fund our projected operating requirements beyond the next 12 months from the date of filing of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

As of September 30, 2025, we had cash, cash equivalents and investments of $298.7 million compared to $389.9 million as of December 31, 2024.

Our primary sources of liquidity, other than our holdings of cash, cash equivalents, and investments, have primarily been through the issuance of debt or equity securities, together with cash flow from operating activities.

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the effectiveness of our expense reduction initiatives;

our ability to obtain new collaboration and customer arrangements and maintain existing collaborations and arrangements;

our ability to attract and retain customers and collaborators;

the progress of our research and development programs;

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There can be no assurance that funds will be available on favorable terms, or at all.

Q3 Fiscal 2025 Form 10-Q

Contingent Consideration

Under the terms of our 2023 acquisition of Apton, we agreed to pay $25.0 million to former Apton equity holders if a high-throughput sequencer incorporating Apton’s technology generates $50.0 million in revenue within five years of the closing.

Payment may be made in cash, stock, or a combination.

As of June 30, 2025, due primarily to the decision to discontinue development of the system and revised revenue expectations, the fair value of the contingent consideration liability was estimated at $0.

Q2 Fiscal 2025 Form 10-Q

Payment may be made in cash, stock, or a combination of cash and stock.

As of September 30, 2025, due primarily to the decision to discontinue development of the system and revised revenue expectations, the fair value of the contingent consideration liability was estimated at $0.

Cash Flow Summary

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2025 2024

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Net cash provided by financing activities 3,428 7,213

Net decrease in cash, cash equivalents, and restricted cash $ (957) $ (80,843)

Net increase (decrease) in cash, cash equivalents, and restricted cash

$ 707 $ (102,429)

Operating Activities

Our primary uses of cash in operating activities include the development of future products and product enhancements, manufacturing, and support functions related to our sales, general and administrative activities.

Cash used in operating activities during the six months ended June 30, 2025 of $73.4 million was due primarily to a $468.0 million net loss that included non-cash items such as amortization of acquired intangible assets of $367.4 million, an impairment charge of $15.0 million, share-based compensation of $21.1 million, $8.5 million of inventory adjustments, depreciation expense of $7.8 million, and $6.3 million in net changes to operating assets and liabilities, partially offset by an $18.7 million decrease in the change in the fair value of the contingent consideration.

Cash flow impact from changes in net operating assets and liabilities was primarily driven by increases in accounts receivable and inventory, as well as decreases in accrued expenses and operating lease liabilities.

Cash used in operating activities during the nine months ended September 30, 2025 of $92.1 million was due primarily to a $506.0 million net loss that included non-cash items such as amortization of acquired intangible assets of $368.4 million, an impairment charge of $15.0 million, share-based compensation of $32.1 million, $9.8 million of inventory adjustments, and depreciation expense of $10.3 million, partially offset by an $18.7 million decrease in the change in the fair value of the contingent consideration and $3.1 million in net changes to operating assets and liabilities.

These uses of cash were partially offset by a decrease in prepaid expenses and other assets.

Cash used in operating activities during the six months ended June 30, 2024 of $129.9 million was due primarily to a $251.5 million net loss that included non-cash items such as a goodwill impairment charge of $93.2 million, share-based compensation of $36.7 million, amortization of acquired intangible assets of $13.7 million, depreciation expense of $6.7 million and amortization of right-of-use assets of $5.9 million.

Cash used in operating activities for the nine months ended September 30, 2024 of $175.4 million was due primarily to a $312.2 million net loss that included non-cash items such as a goodwill impairment charge of $93.2 million, share-based compensation of $55.0 million, amortization of acquired intangible assets of $20.6 million, depreciation expense of $10.9 million and amortization of right-of-use assets of $10.9 million.

This was offset by the accretion of discount and amortization of premium on marketable securities, net of $10.7 million and $48.9 million in net changes to operating assets and liabilities.

Cash flow impact from changes in net operating assets and liabilities was primarily driven by an increase in inventory, as well as decreases in accrued expenses and operating lease liabilities.

These uses of cash were partially offset by decreases in accounts receivable and prepaid expenses and other assets and increases in accounts payable and deferred revenue.

These uses of cash were partially offset by a decrease in accounts receivable.

Investing Activities

Our investing activities consist primarily of capital expenditures and investment purchases, sales, and maturities.

Cash provided by investing activities during the six months ended June 30, 2025, was primarily from $195.4 million of maturities of investments partially offset by $118.0 million of purchases of investments and $5.0 million in purchases of intangible assets.

Cash provided by investing activities during the six months ended June 30, 2024, was primarily from $351.6 million of maturities of investments partially offset by $303.6 million in purchases of investments and $5.4 million in purchases of property and equipment.

Cash provided by investing activities during the nine months ended September 30, 2025, was primarily from $280.1 million of maturities of investments partially offset by $183.8 million of purchases of investments and $5.0 million in purchases of intangible assets.

Cash provided by investing activities for the nine months ended September 30, 2024, was primarily from $488.5 million of maturities and sales of investments partially offset by $418.2 million in purchases of investments and $4.6 million in purchases of property and equipment.

Financing Activities

Cash provided by financing activities during the six months ended June 30, 2025 resulted from $2.0 million from the issuance of common stock through our equity compensation plans.

Cash provided by financing activities during the six months ended June 30, 2024 resulted primarily from $6.9 million of proceeds from the issuance of common stock through our equity compensation plans.

Cash provided by financing activities during the nine months ended September 30, 2025 resulted from $3.4 million of proceeds from the issuance of common stock through our equity compensation plans.

Q3 Fiscal 2025 Form 10-Q

Cash provided by financing activities during the nine months ended September 30, 2024 resulted primarily from $7.7 million of proceeds from the issuance of common stock through our equity compensation plans.

Contractual Obligations

We presented our contractual obligations at December 31, 2024 in our 2024 Annual Report.

There were no material changes outside the ordinary course of business to our contractual obligations during the six months ended June 30, 2025.

There were no material changes outside the ordinary course of business to our contractual obligations during the nine months ended September 30, 2025.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2025, we did not have any off-balance sheet arrangements.

As of September 30, 2025, we did not have any off-balance sheet arrangements.

In the ordinary course of business, we enter into standard indemnification arrangements.

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Commitments and Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q, any associated expenses incurred are included within the related accrued litigation expense amounts.

No additional liability associated with such indemnification agreements has been recorded as of June 30, 2025.

No additional liability associated with such indemnification agreements has been recorded as of September 30, 2025.

Q3 Fiscal 2025 Form 10-Q

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis