What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-03-17 · 301 added, 236 removed, 1059 unchanged (34% of the section changed)

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 17, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Fiscal 2025 Form 10-K

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The Company identifies performance obligations for promises to transfer distinct products or services to a customer.

Contracts with customers may contain non-standard terms, requiring management to evaluate if there are additional performance obligations.

For example, certain customer contracts provide options to customers which can be exercised at a future date, such as the option to purchase products at discounted prices.

The Company assesses whether the specified discounts constitute material rights and, therefore, are performance obligations that are included in the allocation of the transaction price.

Auditing management’s identification and evaluation of certain performance obligations was challenging and involved a higher degree of judgment due to their non-standard nature.

Auditing management’s identification and evaluation of performance obligations is complex due to the significant volume of sales transactions that require analysis.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s internal controls addressing management’s identification and evaluation of performance obligations.

Our audit procedures included, among others, reading executed contracts for a sample of arrangements and evaluating whether all performance obligations were appropriately identified and accounted for based on terms of the contracts (including specified discounts on current and future purchase options).

Fiscal 2024 Form 10-K

Impairment assessment of goodwill and indefinite-lived intangible assets

Description of the Matter As of December 31, 2024, the Company’s goodwill and indefinite-lived intangible assets balances were $317.8 million and $15.0 million, respectively.

As discussed in Note 1 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are tested for impairment at least annually at the reporting unit level and asset level, respectively, or more frequently if indicators of impairment exist.

The Company is comprised of one reporting unit.

As described in Note 4 to the consolidated financial statements, the Company identified interim indicators of impairment in 2024, resulting in total impairment charges of $184.5 million for the year ended December 31, 2024.

Auditing the Company's interim impairment assessments was more complex due to the higher estimation uncertainty in determining the fair value of the reporting unit and the indefinite-lived intangible asset under the income approach.

Significant assumptions used in the income approach included revenue growth expectations and the selected discount rate.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process for determining the fair value of the reporting unit and the indefinite-lived intangible asset.

This included controls over management’s review of the revenue growth rates and the discount rate.

Our audit procedures included, among others, evaluating the Company's valuation methodology and performing a sensitivity analysis of the assumptions to evaluate the change in the fair value resulting from changes in the assumptions to identify the assumptions that have the most significant impact on the fair value amount.

We evaluated the reasonableness of projected revenue growth used within the valuations against analyst expectations, industry and market data and other guideline companies within the same industry.

We also involved valuation specialists to assist in evaluating the Company’s selection of the discount rates.

In addition, we inspected the Company’s reconciliation of the fair value of the reporting unit to the market capitalization of the Company and assessed the results.

/s/ Ernst & Young LLP

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San Mateo, California

March 17, 2025

February 25, 2026

Fiscal 2025 Form 10-K

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CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts) 2024 2023

(In thousands, except par value) 2025 2024

Current assets

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Merger-related expenses — — 9,042

Change in fair value of contingent consideration ( 850 ) 15,060 2,377

Amortization of acquired intangible assets 364,541 18,006 6,157

Change in fair value of contingent consideration ( 18,700 ) ( 850 ) 15,060

Total operating expense 599,641 511,595 387,247

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Other comprehensive income (loss):

Unrealized gain (loss) on investments 203 4,984 ( 3,678 )

Unrealized gain on investments

Comprehensive loss $ ( 546,341 ) $ ( 309,648 ) $ ( 301,751 )

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Diluted $ ( 1.82 ) $ ( 1.59 ) $ ( 1.21 )

Weighted average shares outstanding used in calculating net loss per share

Weighted average shares outstanding used in calculating

net loss per share:

Basic 299,959 274,488 253,629

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Net loss — — — — ( 306,735 ) ( 306,735 )

Other comprehensive loss — — — ( 3,678 ) — ( 3,678 )

Issuance of common stock in conjunction with equity plans 5,527 6 11,224 — — 11,230

Share-based compensation expense — — 78,613 — — 78,613

Balance at December 31, 2022 226,505 $ 227 $ 2,099,782 $ ( 4,765 ) $ ( 1,532,340 ) $ 562,904

Net loss — — — — ( 306,735 ) ( 306,735 )

Other comprehensive income — — — 4,984 — 4,984

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Balance at December 31, 2024 294,418 $ 294 $ 2,654,804 $ 422 $ ( 2,148,926 ) $ 506,594

Net loss — — — — ( 546,376 ) ( 546,376 )

Other comprehensive income — — — 35 — 35

Issuance of common stock in conjunction with equity plans 7,538 8 3,420 — — 3,428

Share-based compensation expense — — 41,668 — — 41,668

Balance at December 31, 2025 301,956 $ 302 $ 2,699,892 $ 457 $ ( 2,695,302 ) $ 5,349

See accompanying notes to the consolidated financial statements.

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Notes payable principal payoff — ( 490 ) ( 1,842 )

Net cash (used in) provided by financing activities ( 42,987 ) 108,891 9,622

Net decrease in cash, cash equivalents, and restricted cash ( 125,041 ) ( 145,678 ) ( 137,506 )

Net cash provided by (used in) financing activities

3,428 ( 42,987 ) 108,891

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

7,667 ( 125,041 ) ( 145,678 )

Cash, cash equivalents, and restricted cash at beginning of period 57,592 182,633 328,311

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We are a life science technology company that designs, develops, and manufactures advanced sequencing solutions that enable scientists and clinical researchers to improve their understanding of the genome and ultimately, resolve genetically complex problems.

Our products and technology under development stem from two highly differentiated core technologies focused on accuracy, quality, and completeness, which include our HiFi long-read sequencing technology and our Sequencing by Binding (SBB) short-read sequencing technology.

Our products address solutions across a broad set of applications including human genetics, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications.

Long-read sequencing was recognized by the journal Nature Methods as its “method of the year” for 2022 for its contributions to biological understanding and future potential.

Long-read sequencing has been applied to produce telomere-to-telomere genomes of humans, pangenome references, and has been recognized for its ability to provide more complete views of human variation .

Our products and technology, which include our HiFi long-read sequencing technology, address a broad set of applications including human germline sequencing, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications.

Our focus is on creating some of the world's most advanced sequencing systems to provide our customers with the most complete and accurate view of genomes, transcriptomes, and epigenomes.

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Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements.

The preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements.

On an ongoing basis, we evaluate our significant estimates, including those relating to the valuation of inventory, fair value of contingent consideration, valuation of acquired intangible assets, useful lives assigned to finite-lived assets, asset impairment assessments, computation of provisions for income taxes, and valuations related to our convertible senior notes.

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dollar and record net gains or losses from remeasurement in other income, net, on our consolidated statements of operations and comprehensive loss.

Fiscal 2024 Form 10-K

Cash, Cash Equivalents, Restricted Cash, and Investments

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Cash equivalents may be comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, and government agencies’ securities.

Fiscal 2025 Form 10-K

We classify our investments in debt securities as available-for-sale and report the investments at fair value in current assets.

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Unrealized gains and losses that are not credit-related are recognized in accumulated other comprehensive income (loss) in stockholders’ equity.

Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are also reported in other income, net.

Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are reported in other income, net.

The cost used in the determination of gains and losses of securities sold is based on the specific identification method.

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For the years ended December 31, 2025, 2024, and 2023, no customer accounted for 10% or more of our total revenue.

For the year ended December 31, 2022, one customer exceeded 10 % of our total revenue.

As of December 31, 2025 and 2024, 40 % and 36 % of our accounts receivable were from domestic customers, respectively.

As of December 31, 2024, no customer represented 10% or more of our net accounts receivable.

As of December 31, 2023, one customer represented 10 % of our net accounts receivable.

As of December 31, 2025 and 2024, no customer represented 10% or more of our net accounts receivable.

We currently purchase several key parts and components used in the manufacture of our products from a limited number of suppliers.

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An extended interruption in the supply of parts and components currently obtained from our suppliers could adversely affect our business and consolidated financial statements.

Fiscal 2024 Form 10-K

Inventory, Net

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Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolete balances.

Cost includes depreciation, labor, material, and overhead costs, including product and process technology costs.

Determining net realizable value of inventories involves numerous judgements, including projecting future average selling prices, sales volumes, and costs to complete products in work in process inventories.

Cost includes depreciation, labor, material, and overhead costs, including product

Fiscal 2025 Form 10-K

and process technology costs.

Determining net realizable value of inventories involves judgment, including projecting future average selling prices, sales volumes, and costs to complete products in work in process inventories.

We make inventory purchases and commitments to meet future shipment schedules based on forecasted demand for our products.

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Estimated Useful Lives

Leasehold improvements 3 to 10 years

Leasehold improvements 8 years

Lab equipment 3 to 5 years

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Costs that we incur to complete the business combination, such as legal and other professional fees, are expensed as they are incurred.

Fiscal 2024 Form 10-K

In connection with certain acquisitions, contingent consideration can be earned by the sellers upon completion of certain future performance milestones.

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These estimates require significant management judgment, including probabilities of achieving certain future milestones.

Changes in the fair value of the contingent consideration subsequent to the acquisition date are recognized in operating expense on our consolidated statements of operations and comprehensive loss.

Changes in the fair value

Fiscal 2025 Form 10-K

of the contingent consideration subsequent to the acquisition date are recognized in operating expense on our consolidated statements of operations and comprehensive loss.

If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements.

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We perform annual impairment testing of IPR&D as of the first day of the third quarter, or more frequently if indicators of impairment exist.

Events that would indicate impairment and trigger an interim impairment test include, but are not limited to, unexpected adverse business conditions, weak demand for a specific product line or business, economic factors, shifting focus to certain lines of business, unanticipated technological changes or competitive activities, loss of key personnel, changes in business strategy and acts by governments or courts.

Events that would indicate impairment and trigger an interim impairment test include, but are not limited to, adverse changes in business or economic conditions, lower-than-expected performance of a product line or business, changes in strategic direction, unanticipated technological or competitive developments, loss of key personnel, and actions by governments or courts.

We perform our goodwill impairment analysis at the reporting unit level.

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We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative impairment test.

Fiscal 2024 Form 10-K

Intangible Assets and Other Finite-Lived Assets

Finite-lived intangibles assets include our acquired developed technology and customer relationships.

We capitalize finite-lived intangibles assets and generally amortize them on a straight-line basis over the estimated useful lives.

Finite-lived intangible assets include our acquired developed technology and customer relationships.

We capitalize finite-lived intangible assets and generally amortize them on a straight-line basis over the estimated useful lives.

Intangible assets purchased as part of an acquisition are included in Intangible assets, net, on our consolidated balance sheets.

Fiscal 2025 Form 10-K

We regularly review intangible assets with finite lives and other finite-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

We assess the recoverability of assets based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset.

If the undiscounted future cash flows are less than the carrying amount, the asset is impaired.

If the undiscounted future cash flows are less than the carrying amount, we estimate the fair value of the assets and record an impairment loss if the carrying value exceeds the fair value.

In light of the changes in circumstances that led to the recoverability assessment, we also assess the remaining estimated useful life of the assets.

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We account for a contract with a customer when there is a legally enforceable contract between us and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable.

Revenues are recognized when control of the promised goods are transferred to our customers, or services are performed, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Revenues are recognized when control of the promised goods is transferred to our customers, or services are performed, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Invoicing typically occurs upon shipment, or delivery in the case of an instrument, and payment is typically due within 30 days from invoice.

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Revenue from development agreements generally includes upfront and milestone payments.

Revenue for these agreements is recognized when each distinct performance obligation is satisfied.

Revenue for these agreements is recognized when each separate performance obligation is satisfied.

We may enter into, or periodically modify, contracts with customers that include a combination of promised products and services, resulting in arrangements containing multiple performance obligations.

We determine whether each product or service is distinct, in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations.

A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract.

A product or service is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract.

We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service.

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The consideration for contracts with multiple performance obligations is allocated between separate performance obligations based on their individual standalone selling price.

We determine the best estimate of standalone selling price using historical average selling prices combined with an assessment of current market conditions.

We determine the best estimate of standalone selling price primarily using historical average selling prices combined with an assessment of current market conditions.

If the standalone selling price is not directly observable, we rely on estimates by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, internal costs, profit objectives, pricing practices, and other observable inputs.

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Where we expect, at contract inception, the timing of payments to be consistent with the transfer of goods or services or the contract duration to be one year or less, we do not adjust the transaction price for the effects of a significant financing component.

We periodically modify existing contracts with customers, which could change the scope or the price of the contract, or both.

Modification of existing contracts with customers could change the scope or the price of the contract, or both.

When a contract modification occurs, we exercise judgment to determine if the modification should be accounted for as:

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In accounting for customer options, we determine whether an option is a material right and this may require us to exercise judgment.

If a contract provides the customer an option to acquire additional goods or services at a discount that exceeds the range of discounts that we typically give for that product or service for the same class of customer, or if the option provides the customer certain additional goods or services for free, the option may be considered a material right and, therefore, a performance obligation.

If the contract gives the customer the option to acquire additional goods or services at their normal standalone selling prices, we would likely determine that the option is not a material right and, therefore, account for it when the customer exercises the option.

If a contract provides the customer an option to acquire additional goods or services at a discount that exceeds the range of discounts that we typically give for that product or service for the same class of customer, or if the option provides the customer certain additional goods or services for free, the option is considered a material right and, therefore, a performance obligation.

If the standalone selling price of the option is not directly observable, an estimated standalone selling price is utilized which considers adjustments for discounts that the customer could receive without exercising the option and the likelihood that the option will be exercised.

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Service costs include the direct costs of components used in support, repair and maintenance of customer instruments as well as the cost of personnel, materials, shipping and support infrastructure necessary to support our installed customer base.

Fiscal 2024 Form 10-K

Research and Development

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We defer and capitalize non-refundable advance payments made for research and development activities until the related goods are received or the related services are rendered.

Fiscal 2025 Form 10-K

Credit Losses

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Credit loss expense was immaterial for the years ended December 31, 2025, 2024, and 2023.

Although we have historically not experienced significant credit losses, our exposure to credit losses may increase if our customers are adversely affected by changes in economic pressures or uncertainty associated with local or global economic recessions, disruptions associated with epidemics or pandemics, or other customer-specific factors.

Available-for-sale debt securities

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We have the ability to hold and do not intend to sell the investments in unrealized loss positions before the recovery of their amortized cost bases.

We account for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of our assets and liabilities and the amounts reported in the financial statements.

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Stockholders’ Equity for further information regarding share-based compensation.

Fiscal 2024 Form 10-K

Other Comprehensive Income (Loss)

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

Diluted net loss per share is computed by dividing diluted net loss by the weighted-average number of shares of common stock outstanding and potentially dilutive shares outstanding during the period.

Diluted net loss per share is computed by dividing diluted net loss

Fiscal 2025 Form 10-K

by the weighted-average number of shares of common stock outstanding and potentially dilutive shares outstanding during the period.

We calculate the potential dilutive effect of outstanding stock options, restricted stock units, and common stock issuable pursuant to our ESPP, using the treasury stock method.

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Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU improves segment disclosure requirements, primarily through enhanced disclosure requirements for significant segment expenses on an annual and interim basis.

The improved disclosure requirements apply to all public entities that are required to report segment information, including those with only one reportable segment.

The standard was effective for us beginning in fiscal year 2024 and interim periods within fiscal year 2025.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

The standard was effective for annual periods beginning in 2025.

We adopted this ASU for our fiscal year ending December 31, 2025 and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements.

There was no impact on the Company’s reportable segments identified.

The adoption of this new standard resulted in incremental income tax related disclosures to the notes to the consolidated financial statements but did not have a material impact on the consolidated financial statements.

Additional required disclosures have been included in Note 8 .

Segment and Geographic Information .

Income Taxes .

Accounting Pronouncements Pending Adoption

In November 2024, the FASB issued ASU 2024-04, Debt—Debt With Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments .

This new standard clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt.

The standard will be effective for us beginning in the first quarter of fiscal year 2026, with early adoption permitted.

The new standard is expected to be applied prospectively, but retrospective application is permitted.

We are currently evaluating the impact of ASU 2024-04 on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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This new standard requires a company to provide disaggregated disclosures, within the notes to the financial statements, of specified categories of expenses that are included in line items on the face of the income statement.

The standard will be effective for us beginning in fiscal year 2027, and interim periods within fiscal year 2028, with early adoption permitted.

The standard will be effective for us beginning in 2027, and interim periods within 2028, with early adoption permitted.

The new standard is expected to be applied prospectively, but retrospective application is permitted.

We are currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

The standard will be effective for us beginning in fiscal year 2025, with early adoption permitted.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt With Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments .

The standard will be effective for us beginning in the first quarter of 2026, with early adoption permitted.

The new standard is expected to be applied prospectively, but retrospective application is permitted.

We do not expect the adoption of this new standard to have a material impact on the consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

This new standard clarifies and modernizes the recognition and disclosure framework for capitalized internal-use software costs by removing all references to project stages and introduces a more judgment-based approach.

The standard also clarifies the threshold to be applied to begin capitalizing.

The standard will be effective for us beginning in the first quarter of 2028, with early adoption permitted, and can be applied using a prospective, retrospective, or modified transition approach.

We are currently evaluating the impact of ASU 2025-06 on the consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities .

This new standard provides guidance on the recognition, measurement, and presentation of government grants.

The standard will be effective for us beginning in the first quarter of fiscal year 2029, with early adoption permitted, and can be applied using a modified prospective, modified retrospective or full retrospective transition approach.

We are currently evaluating the impact of ASU 2025-10 on the consolidated financial statements.

Fiscal 2025 Form 10-K

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In connection with the Apton acquisition, contingent consideration of $ 25.0 million, which we may elect to pay in cash, shares of our common stock or a combination of cash and shares of our common stock, is due upon the achievement of a milestone, defined as the achievement of $ 50.0 million in revenue associated with Apton's technology, provided that the milestone event occurs prior to the five-year anniversary of the closing date of the acquisition.

At this time, the number of shares, if any, to be issued in connection with the achievement of the specified milestone is not known and will be calculated based on the daily volume-weighted average price of our common stock for the twenty trading days ending on and including the fifth trading day immediately prior to the occurrence of the specified milestone.

Upon achievement of the milestone, we may pay cash in lieu of our common stock to ensure that the issuance of our common stock does not exceed 19.9 % of our outstanding shares of common stock then outstanding.

The contingent consideration is accounted for as a liability at fair value, with changes during each reporting period recognized on our consolidated statements of operations and comprehensive loss.

The fair value of the contingent consideration liability is calculated, with the assistance from a third-party valuation firm, using a Monte Carlo simulation to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate.

We recognized a change in fair value of contingent consideration of $ 18.7 million during the year ended December 31, 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.

The acquisition was accounted for as a business combination and, accordingly, the total fair value of the consideration transferred was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date.

As of December 31, 2023, the major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred were as follows (in thousands):

As of December 31, 2023, the major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred were as follows:

(In thousands)

Cash and cash equivalents $ 97

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Total consideration transferred $ 94,008

We have finalized the purchase price allocation for the Apton acquisition.

There were no material adjustments from those amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

We incurred costs related to the Apton acquisition of approximately $ 9.0 million during the year ended December 31, 2023, which are included in merger-related expenses on our consolidated statement of operations and comprehensive loss.

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As a result, the total shares issued in connection with the Apton acquisition were 6.3 million shares of common stock.

Fiscal 2024 Form 10-K

The excess of the value of consideration paid over the aggregate fair value of those net assets has been recorded as goodwill.

We recognized goodwill of $ 52.3 million, which is primarily attributable to the synergies expected to occur from the integration of Apton and is not deductible for income tax purposes.

Fiscal 2025 Form 10-K

We allocated $ 55.0 million of the purchase price to acquired IPR&D.

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Expected future cash flows utilize significant assumptions such as revenue projections and discount rate.

We recognized a $ 40.0 million impairment charge during the year ended December 31, 2024 as a result of a quantitative interim impairment test.

During the first quarter of 2025, based on our decision to cease development of the high-throughput short-read sequencing platform, which would utilize the IPR&D, and the resulting changes to the expected future cash flows, among other factors, we concluded that it was more likely than not that the fair value of the IPR&D was less than its carrying amount, requiring an interim impairment assessment.

Using a discounted cash flow model under the income approach, we determined the fair value was $ 0 and recorded a $ 15.0 million impairment charge.

See N ot e 4.

Balance Sheet Components for further details.

On January 30, 2026, we completed a disposition of assets to Illumina Cambridge Limited (the "Buyer") in accordance with the terms of an Asset Purchase Agreement (the “Asset Purchase Agreement”) (the “Asset Sale”).

As consideration for the Asset Sale, Buyer paid us $ 50.0 million in cash and assumed certain liabilities (the “Purchase Price”).

In connection with the Asset Sale, Buyer will pay at our direction 4 % of the net proceeds from the Purchase Price to the former equity holders of Apton Biosystems, Inc.

(“Apton”) related to the waiver of all remaining milestone obligations associated with our purchase of Apton in August 2023, which payment is expected in the first quarter of 2026.

Subsequent Events for additional information.

FINANCIAL INSTRUMENTS

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Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy established under GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The fair value hierarchy established under U.S.

GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The three levels of inputs that may be used to measure fair value are as follows:

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Cash and money market funds $ 60,496 $ — $ — $ 60,496 $ 55,370 $ — $ — $ 55,370

Commercial paper — — — — — — — —

government & agency securities — 3,211 — 3,211 — — — —

Total cash and cash equivalents 60,496 3,211 — 63,707 55,370 — — 55,370

Commercial paper — — — — — 9,947 — 9,947

Corporate debt securities — 23,250 — 23,250 — 46,905 — 46,905

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We estimate the fair value of the contingent consideration liability based on the simulated revenue of the Company through the five-year anniversary of the closing date of the acquisition.

As of December 31, 2024, the key input used in the determination of the fair value included projected revenues of the Company relating to the high-throughput short-read products and services leveraging Apton's technology.

The assumptions used in our valuation are inherently subject to uncertainty.

A decrease in the projected revenues would result in a decrease in the fair value of the liability.

The discount rates used are the sum of the U.S.

risk-free rate and the estimated subordinated credit spread for CCC+ credit rating, which ranges from 9.4 % to 9.6 %.

Changes in our estimated subordinated credit spread can result in changes in the fair value of the contingent consideration liability, where a lower credit spread may result in an increased liability valuation.

The key input used in the determination of the fair value included projected revenues of the high-throughput short-read products and services leveraging Apton's technology.

Primarily due to management's decision to cease development of the high-throughput short-read system, and the resulting changes in the expected future revenues, among other factors, and as the milestone event must occur prior to the five-year anniversary of the closing date of the acquisition, the estimated fair value of the contingent consideration liability is $ 0 .

An increase in the fair value of the liability may result from changes in projected revenues, including accelerated timing or higher expected amounts, and from decreases in discount rates, including the risk-free rate and the estimated subordinated credit spread for a CCC credit rating.

Fiscal 2025 Form 10-K

4 unchanged sentences

Ending balance as of December 31, 2025 $ —

Changes to the fair value are recorded as the change in fair value of contingent consideration on our consolidated statement of operations and comprehensive loss.

Changes to the fair value are recorded as the change in fair value of contingent consideration on our consolidated statements of operations and comprehensive loss.

On January 30, 2026, we completed a disposition of assets to Buyer in accordance with the terms of the Asset Purchase Agreement.

In connection with the Asset Sale, Buyer will pay at our direction 4 % of the net proceeds from the Purchase Price to the former equity holders of Apton related to the waiver of all remaining milestone obligations associated with our purchase of Apton in August 2023, which payment is expected in the first quarter of 2026.

Subsequent Events for additional information.

Contingent Consideration - Omniome

13 unchanged sentences

Total cash and cash equivalents 63,707 — — 63,707

Commercial paper — — — —

Corporate debt securities 23,172 78 — 23,250

8 unchanged sentences

Cash and money market funds $ 55,370 $ — $ — $ 55,370

Commercial paper — — — —

government & agency securities 109,786 13 ( 60 ) 109,739

Total cash and cash equivalents 55,370 — — 55,370

Commercial paper 9,947 — — 9,947

Corporate debt securities 46,746 184 ( 25 ) 46,905

10 unchanged sentences

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

Fiscal 2024 Form 10-K

Investment income included in other income, net on our consolidated statements of operations and comprehensive loss was $ 13.1 million and $ 24.9 million for the years ended December 31, 2025 and 2024, respectively.

Fiscal 2025 Form 10-K

BALANCE SHEET COMPONENTS

22 unchanged sentences

Depreciation expense during the years ended December 31, 2025, 2024, and 2023 was $ 13.0 million, $ 13.8 million, and $ 11.5 million, respectively.

In connection with the interim impairment test of goodwill in the second and fourth quarter of 2024, we also performed a recoverability test for the definite-lived asset group, which includes property and equipment, noting no impairment.

Fiscal 2024 Form 10-K

Goodwill and Intangible Assets

Goodwill is reviewed for impairment at least annually as of the first day of the second quarter, or more frequently if an event occurs indicating impairment.

We performed our annual assessment for goodwill impairment, noting no impairment.

Based primarily on the sustained decrease in our stock price during the second quarter and overall market capitalization as of the end of the second quarter of 2024 as well as other factors, we concluded that there was an indicator that it was more likely than not that the fair value of the reporting unit was less than its carrying amount that required an interim impairment test be performed on goodwill.

As a result of the interim impairment test performed as of June 30, 2024, we concluded that the carrying amount of the entity-level reporting unit exceeded fair value and recorded $ 93.2 million of goodwill impairment.

The impairment charge is included on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.

The decline in the fair value of the reporting unit below its carrying value as of June 30, 2024 resulted primarily from the decline in our stock price and changes in the timing of expected future cash flows as compared to our initial long-term plan, due to continued impact of longer than expected median sales cycles resulting from various factors.

We performed our impairment test using a combination of an income and a market approach to determine the fair value of the reporting unit.

Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment.

We recognized $ 144.5 million of impairment charges during the year ended December 31, 2024.

Based primarily on the decline in our stock price and overall market capitalization during the first quarter of 2025, driven in part by macroeconomic uncertainties, as well as our updated strategic plans and restructuring initiatives that prioritize accelerating adoption of HiFi sequencing and ceasing development of our high-throughput short-read platform, we concluded that changes to the timing and amount of expected future cash flows, among other factors, indicated that it was more likely than not that the fair value of the reporting unit was less than its carrying amount, requiring an interim goodwill impairment assessment.

As a result of the quantitative interim impairment test performed as of March 31, 2025, we concluded that there was no impairment, as the estimated fair value of the entity-level reporting unit exceeded the carrying value.

Fiscal 2025 Form 10-K

To determine the fair value of the entity-level reporting unit as of March 31, 2025, we performed our impairment test using a combination of an income approach and a market approach to determine the fair value of the reporting unit.

The income approach utilized estimated discounted cash flows, while the market approach utilized comparable company information.

Significant assumptions used in the income approach included revenue growth expectations and a selected discount rate of 12.0 %.

The discount rate was based on the weighted average cost of capital, determined using market, peer company, industry data, and related risk factors.

The assessment is a level 3 fair value measurement due to its reliance on certain unobservable inputs and significant management judgment.

The assumptions used were inherently subject to uncertainty and small changes in these assumptions could have had a significant impact on the concluded value.

An increase of 100 basis points to the discount rate used in our assessment would have resulted in additional goodwill impairment of approximately $ 85 million.

The discount rate was based on the weighted average cost of capital, determined using market, industry data, and related risk factors.

The assumptions used were inherently subject to uncertainty.

The assessment is a level 3 measurement due to its reliance on certain unobservable inputs and management judgment.

The assessed fair value was deemed reasonable based on a market capitalization reconciliation and a supportable control premium.

As of the end of the fourth quarter of 2024, we concluded that the significant increase in the carrying value of the reporting unit resulting primarily from the debt restructuring during the quarter and changes in the timing and amount of expected future cash flows due to macroeconomic headwinds, among other factors, indicated that it was more likely than not that the fair value of the reporting unit was less than its carrying amount that required an interim impairment test be performed on goodwill.

As a result of the impairment test performed as of December 31, 2024, we concluded that the carrying amount of the entity-level reporting unit exceeded fair value and recorded $ 51.3 million of goodwill impairment.

The impairment charge is included on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.

We performed our impairment test consistent with the approach used to determine the fair value of the reporting unit in the second quarter of 2024.

Significant assumptions used in the income approach included revenue growth expectations and a selected discount rate of 12.0 %.

The assessment is a Level 3 fair value measurement due to its reliance on certain unobservable inputs and significant management judgment.

The assumptions used were inherently subject to uncertainty and small changes in these assumptions could have had a significant impact on the concluded value.

An increase of 100 basis points to the discount rate used in our assessment would have resulted in additional goodwill impairment of approximately $ 95 million.

The assessed fair value was deemed reasonable based on a market capitalization reconciliation.

As a result of the impairments, the carrying value of goodwill now approximates fair value.

We performed our annual assessment for goodwill impairment in the second quarter of 2025, noting no impairment.

Changes in our future operating results, cash flows, share price, market capitalization or discount rates, among others, used when conducting future goodwill impairment tests could affect the estimated implied fair value of goodwill and may result in additional impairment charges in the future.

Changes to goodwill during the year ended December 31, 2024 were as follows:

(in thousands)

Balance as of December 31, 2023

Impairment charges

Balance as of December 31, 2024

Fiscal 2024 Form 10-K

Intangible Assets

1 unchanged sentence

As a result of the Apton acquisition in August 2023, we allocated $ 55.0 million of the purchase price to IPR&D.

As of December 31, 2024, the research and development project had not been completed or abandoned and, therefore, the IPR&D is not currently subject to amortization.

During the year ended December 31, 2023, acquired IPR&D of $ 400.0 million as a result of the Omniome acquisition in September 2021 was completed and became subject to amortization.

IPR&D is reviewed for impairment at least annually, or more frequently if an event occurs indicating the potential for impairment.

Based on the interim impairment test of goodwill in the second quarter of 2024 and our annual IPR&D impairment assessment in the third quarter of 2024, no impairment of IPR&D was identified.

As of the end of the fourth quarter of 2024, we concluded that due to significant macroeconomic uncertainties and the related changes in the timing and amount of expected future cash flows, among other factors, it was more likely than not that the fair value of the IPR&D was less than its carrying amount that required an interim impairment test be performed on IPR&D.

We performed our impairment test by comparing the carrying value of the IPR&D to its estimated fair value, which was determined by the income approach, using a discounted cash flow model.

Significant estimates and assumptions used in the income approach, which represent a Level 3 fair value measurement, include revenue growth assumptions, a selected discount rate of 14.0 %, and a selected obsolescence factor of 13 years.

The discount rate was based primarily on the weighted average cost of capital, determined using market, peer company, industry data, and related risk factors.

Based on our analysis, the carrying value of the IPR&D exceeded its estimated fair value, and we recorded an impairment of $ 40.0 million in the fourth quarter of 2024.

We recognized a $ 40.0 million impairment charge during the year ended December 31, 2024.

Using a discounted cash flow model under the income approach, we determined the fair value was $ 0 and recorded a $ 15.0 million impairment charge .

The decline in the fair value of the IPR&D to $ 0 as of March 31, 2025 resulted primarily from changes in the timing of expected future cash flows as compared to the fair value as of December 31, 2024, driven by the restructuring initiatives that prioritize accelerating adoption of HiFi sequencing and resulted in ceasing development of our high-throughput short-read sequencing platform.

The impairment charge is included on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2025.

The assumptions used were inherently subject to uncertainty and small changes in these assumptions could have had a significant impact on the concluded value.

An increase of 100 basis points to the discount rate used in our analysis would have resulted in additional IPR&D impairment of approximately $ 5 million.

A decrease of one year to the obsolescence factor used in our analysis would have resulted in additional IPR&D impairment of approximately $ 5 million.

We also performed a recoverability test for the definite-lived asset group, which includes developed technology, noting no impairment.

As a result of the impairment, the carrying value of the IPR&D now approximates fair value.

Changes in macroeconomic conditions, industry-specific conditions and company-specific conditions may impact the estimates and assumptions used when conducting future IPR&D impairment tests.

These changes could affect the estimated fair value of the IPR&D and may result in additional impairment charges in the future.

Significant estimates and assumptions used in the income approach include timing of future cash flows, revenue growth assumptions, a selected discount rate of 14.0 %, and a selected obsolescence factor of 11 years.

The discount rate was based primarily on the weighted average cost of capital, determined using market, peer company, industry data, and related risk factors.

The assessment is a level 3 measurement due to its reliance on certain unobservable inputs and management judgment.

The assumptions used were inherently subject to uncertainty.

Changes to IPR&D during the year ended December 31, 2025 were as follows:

3 unchanged sentences

Balance as of December 31, 2025

Restructuring for additional information on costs incurred in connection with our current year restructuring activities.

Fiscal 2025 Form 10-K

In addition to IPR&D, we had the following acquired finite-lived intangible assets as of December 31, 2025:

(in thousands, except years) Estimated

(In thousands, except years)

(in years) Gross

1 unchanged sentence

Amortization Net

Developed technology 15 $ 411,179 $ ( 36,607 ) $ 374,572

Developed technology 3 to 15

$ 421,179 $ ( 406,055 ) $ 15,124

Customer relationships 2 360 ( 360 ) —

3 unchanged sentences

For the years ended December 31, 2025, 2024, and 2023, amortization expense of intangibles in operating expenses was $ 364.5 million, $ 18.0 million, and $ 6.3 million, respectively.

Fiscal 2024 Form 10-K

Amortization of acquired intangible assets is included within our cost of revenue if the costs and expenses related to the intangible assets are attributable to revenue generating activities.

2 unchanged sentences

The finite-lived intangible assets are amortized using the straight-line method over their estimated useful lives.

During the first quarter of 2025, we revised the estimated useful life of the developed technology acquired in the 2021 Omniome, Inc.

("Omniome") acquisition.

This change reflects updated strategic plans and restructuring initiatives focused on accelerating HiFi sequencing adoption, leading to ceased development of our high-throughput short-read platform and revised expectations for the timing and amount of future cash flows from short-read sequencing products and services.

As a result of the change in estimate, we recognized accelerated amortization of $ 359.3 million within amortization of acquired intangible assets in operating expenses, reflecting our revised estimate that the asset will no longer generate economic benefit.

This expense had a negative impact on basic and diluted net loss per share of $ 1.20 for the year ended December 31, 2025.

On March 7, 2025, the Company entered into an agreement to acquire certain developed technology and related intellectual property from The Chinese University of Hong Kong for a total consideration of $ 9.7 million.

In addition, the Company entered into a license agreement for complementary developed technology during the three months ended March 31, 2025.

Both the acquired technology and license are classified as intangible assets and are being amortized over an estimated useful life of three years .

As of December 31, 2025, $ 5.0 million of these intangible assets remained unpaid.

This amount is included in accrued liabilities on the condensed consolidated balance sheets and is expected to be paid in 2026.

The estimated future amortization expense of acquisition-related intangible assets with finite lives is estimated as follows:

(In thousands)

2025 $ 27,412

2031 and thereafter 4,175

Total $ 15,124

Fiscal 2025 Form 10-K

Assets Held for Sale

During the fourth quarter of 2025, the Company committed to a plan to sell certain intellectual property and other assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies.

The assets met the held-for-sale criteria under ASC 360.

The carrying value of the assets was previously written down to $ 0 through impairment charges and accelerated amortization resulting from the change in estimated useful life recorded in the first quarter of 2025.

Accordingly, no additional loss was recognized upon classification of such assets as held-for-sale.

The Company completed the disposition of assets on January 30, 2026.

Subsequent Events for additional information.

Accrued Expenses

2 unchanged sentences

Salaries and benefits $ 18,254 $ 11,706

Accrued intangibles

Accrued interest payable 3,270 2,470

Accrued purchase commitments — 2,613

Accrued product development costs 36 1,111

11 unchanged sentences

There were no material changes in estimates for the periods presented below.

Fiscal 2024 Form 10-K

Changes in the reserve for product warranties were as follows:

8 unchanged sentences

Revenue recorded in the year ended December 31, 2025 includes $ 12.3 million that was included in deferred revenue, current as of December 31, 2024.

Fiscal 2025 Form 10-K

Performance Obligations

9 unchanged sentences

Accrued Employee Stock Purchase Plan $ 1,377 $ 2,014

Short-term loan — 490

Other 654 1,210

Other liabilities, current $ 2,031 $ 3,224

Fiscal 2024 Form 10-K

CONVERTIBLE SENIOR NOTES

2029 Convertible Senior Notes

On November 7, 2024, we entered into an exchange agreement with SB Northstar LP (“SBN”), a subsidiary of SoftBank Group Corp., pursuant to which we have agreed to exchange the remaining approximately $ 459.0 million in aggregate principal amount of 2028 Notes outstanding for (i) $ 200.0 million aggregate principal amount of 1.50 % Convertible Senior Notes due 2029 (the “2029 Notes”), (ii) 20,451,570 shares of common stock (the “Exchange Shares”) and (iii) $ 50.0 million of cash (the “2024 Exchange Transaction”).

On November 7, 2024, we entered into an exchange agreement with SB Northstar LP (“SBN”), a subsidiary of SoftBank Group Corp., pursuant to which we agreed to exchange the remaining approximately $ 459.0 million in aggregate principal amount of our previously held 1.50 % Convertible Senior Notes due 2028 (the “2028 Notes”) outstanding for (i) $ 200.0 million aggregate principal amount of 1.50 % Convertible Senior Notes due 2029 (the “2029 Notes”), (ii) 20,451,570 shares of common stock (the “Exchange Shares”) and (iii) $ 50.0 million of cash (the “2024 Exchange Transaction”).

The Exchange Shares were issued on November 21, 2024 (the “Closing Date”).

The 2029 Notes, the Exchange Shares, and shares of common stock issuable upon conversion of the 2029 Notes are subject to certain lock-up restrictions for a six-month period (the “Lock-Up Period”) beginning on the Closing Date of the 2024 Exchange Transaction;

the lock-up restrictions will terminate immediately prior to the consummation of any change in control of the Company.

The 2029 Notes, the Exchange Shares, and shares of common stock issuable upon conversion of the 2029 Notes were subject to certain lock-up restrictions for a six-month period (the “Lock-Up Period”) beginning on the Closing Date of the 2024 Exchange Transaction.

Additionally, on November 21, 2024, in connection with the issuance of the 2029 Notes, the Company and SBN entered into the Letter Agreement pursuant to which the Company and SBN agreed that, for so long as SBN and its affiliates hold at least $ 180 million aggregate principal amount of the 2029 Notes, the Company and its subsidiaries are subject to certain negative covenants that restrict the Company’s and its subsidiaries’ ability to incur additional indebtedness and create liens, in each case, subject to the exceptions set forth in the Letter Agreement, including exceptions which permit the Company to incur up to $ 75 million in aggregate principal amount of secured indebtedness pursuant to Credit Facilities (as defined in the Letter Agreement).

In addition, the Letter Agreement restricts the ability of the Company and its subsidiaries from guaranteeing any indebtedness or incurring certain indebtedness outside of the ordinary course of business unless, in each case, the Company and its subsidiaries concurrently provide a guarantee of the Company’s obligations under the 2029 Notes.

Upon any conversion of the 2029 Notes, SBN will not be entitled to be issued a number of shares of the Company’s common stock which would cause SBN's beneficial ownership of common stock to exceed either 9.9 % of the total number of issued and outstanding shares of common stock or 9.9 % of the combined voting power of all of the securities of the Company, in each case, following such conversion.

2 unchanged sentences

The 2029 Notes bear interest at a rate of 1.50 % per annum.

Interest on the 2029 Notes is payable semi-annually in arrears on February 15 and August 15 and commencing on February 15, 2025.

Interest on the 2029 Notes is payable semi-annually in arrears on February 15 and August 15, commencing on February 15, 2025.

The 2029 Notes will mature on August 15, 2029, subject to earlier conversion, redemption or repurchase.

Fiscal 2025 Form 10-K

The 2029 Notes are convertible at the option of the holder at any time from the expiration of the Lock-Up Period until the second scheduled trading day prior to the maturity date, including in connection with a redemption by the Company.

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The 2029 Indenture also includes customary covenants for convertible notes of this type.

Fiscal 2024 Form 10-K

To the extent we elect, the sole remedy for an event of default relating to our failure to comply with certain of our reporting obligations shall, for the first 360 calendar days after the occurrence of such an event of default, consist exclusively of the right to receive additional interest on the 2029 Notes at a rate equal to (i) 0.25 % per annum of the principal amount of the 2029 Notes outstanding for each day during the first 180 calendar days of the 360 -day period after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived) and (ii) 0.50 % per annum of the principal amount of the 2029 Notes outstanding for each day from, and including, the 181 st calendar day to, and including, the 360 th calendar day after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived as provided for in the 2029 Indenture).

9 unchanged sentences

However, due to the nature and terms of the reporting obligations, the value of the embedded derivative is immaterial.

Fiscal 2025 Form 10-K

The exchange qualified as a troubled debt restructuring under ASC 470-60 – Troubled Debt Restructurings by Debtors .

1 unchanged sentence

As a result, no interest expense will be recognized for the 2029 Notes.

The Company recorded a gain on debt restructuring of $ 154.4 million, which resulted in a decrease of basic net loss per share of $ 0.56 , during the year ended December 31, 2024 on our consolidated statements of operations and comprehensive loss.

The Company recorded a gain on debt restructuring of $ 154.4 million, which resulted in a decrease of basic net loss per share of $ 0.56 , during the year ended December 31, 2024 in our consolidated statements of operations and comprehensive loss.

The gain was calculated as the difference between the carrying amount of the old debt and the carrying amount of the new debt, adjusted for debt issuance costs.

We incurred issuance costs related to the 2029 Notes of approximately $ 3.1 million, including $ 0.2 million of lender fees, which were recorded as a reduction to the gain on debt restructuring on our consolidated statements of operations and comprehensive loss.

We incurred issuance costs related to the 2029 Notes of approximately $ 3.1 million, including $ 0.2 million of lender fees, which were recorded as a reduction to the gain on debt restructuring in our consolidated statements of operations and comprehensive loss.

We also paid accrued but unpaid interest of $ 1.8 million on the 2028 Notes in connection with the 2024 Exchange Transaction.

3 unchanged sentences

The carrying amount of the liability for the 2029 Notes as of December 31, 2025 is $ 212.0 million, of which $ 209.0 million is included as convertible senior notes, net, non-current, and $ 3.0 million is included as accrued expenses on our consolidated balance sheets.

Changes to the 2029 Notes during the year ended December 31, 2025 were as follows:

(In thousands)

Carrying amount as of December 31, 2024

Contractual interest expense ( 2,200 )

Carrying amount as of December 31, 2025

As of December 31, 2025, the estimated fair value (Level 2) of the 2029 Notes was $ 183.5 million.

The fair value of the 2029 Notes is estimated using a binomial lattice model that is primarily affected by the trading price of our common stock, market interest rates and volatility.

Fiscal 2024 Form 10-K

2030 Convertible Senior Notes

In June 2023, we entered into a privately negotiated exchange agreement with a holder of our outstanding 1.50 % Convertible Senior Notes due 2028 (the “2028 Notes”), pursuant to which we issued $ 441.0 million in aggregate principal amount of our 1.375 % Convertible Senior Notes due 2030 (the “2030 Notes” and together with the 2029 Notes, the “Notes”) in exchange for $ 441.0 million principal amount of the 2028 Notes (the “2023 Exchange Transaction”), pursuant to exemptions from registration under the Securities Act of 1933, as amended, and the rules and regulations thereunder.

In June 2023, we entered into a privately negotiated exchange agreement with a holder of our outstanding 2028 Notes, pursuant to which we issued $ 441.0 million in aggregate principal amount of our 1.375 % Convertible Senior Notes due 2030 (the “2030 Notes” and together with the 2029 Notes, the “Notes”) in exchange for $ 441.0 million principal amount of the 2028 Notes (the “2023 Exchange Transaction”), pursuant to exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations thereunder.

The 2030 Notes were issued on June 30, 2023.

7 unchanged sentences

Upon conversion of the 2030 Notes, we may elect to settle such conversion obligation in cash, shares of our common stock, or a combination of cash and shares of our common stock.

On or after June 20, 2028, and prior to the 31st scheduled trading day immediately preceding the maturity date, the 2030 Notes will be redeemable by the Company in the event that the closing sale price of our common stock has been at least 150 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100 % of the principal amount of such 2030 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date.

Fiscal 2025 Form 10-K

consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100 % of the principal amount of such 2030 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date.

Upon the occurrence of a Fundamental Change (as defined in the 2030 Indenture), the holders of the 2030 Notes may require that we repurchase all or part of the principal amount of the 2030 Notes at a purchase price equal to 100 % of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest up to, but excluding, the fundamental change repurchase date, and all unpaid interest from the fundamental change repurchase date thereon, but excluding, the maturity date.

3 unchanged sentences

On the 361 st day after such event of default (if the event of default relating to our failure to comply with its obligations is not cured or waived prior to such 361 st day), the 2030 Notes shall be subject to acceleration as provided for in the 2030 Indenture.

Fiscal 2024 Form 10-K

The 2030 Notes are accounted for in accordance with the authoritative guidance for convertible debt instruments that may be settled in cash upon conversion.

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In exchange for issuing the 2030 Notes pursuant to the 2023 Exchange Transaction, we received and cancelled the exchanged 2028 Notes.

Fiscal 2025 Form 10-K

Following the closing of the 2023 Exchange Transaction, $ 459.0 million in aggregate principal amount of 2028 Notes remained outstanding with terms unchanged.

13 unchanged sentences

The fair value of the 2030 Notes is estimated using a binomial lattice model that is primarily affected by the trading price of our common stock, market interest rates and volatility.

Fiscal 2024 Form 10-K

2028 Convertible Senior Notes

7 unchanged sentences

In connection with the 2024 Exchange Transaction, the remaining unamortized debt issuance costs related to the 2028 Notes of $ 1.1 million were extinguished by offsetting the carrying amount of the convertible senior notes.

The net carrying amount of the liability for the 2028 Notes is included as convertible senior notes, net, non-current on our consolidated balance sheets as follows:

(in thousands) 2024 2023

Principal amount $ — $ 459,000

Unamortized debt issuance costs — ( 1,374 )

Net carrying amount $ — $ 457,626

Interest expense for the 2028 Notes was as follows for the years ended December 31, 2025, 2024, and 2023:

6 unchanged sentences

RESTRUCTURING

2025 Restructuring

During the year ended December 31, 2025, we implemented an expense reduction initiative aimed at lowering our annualized run-rate operating expenses.

These actions, which included workforce reductions and other cost-saving measures, were part of a broader strategic shift to prioritize the adoption of HiFi sequencing.

A summary of the pre-tax restructuring charges are as follows:

(In thousands)

December 31, 2025

Cumulative amount incurred to date

Employee separation costs

$ 4,787 $ 4,787

Other costs 1,076 1,076

Total restructuring charges (1)

$ 5,863 $ 5,863

(1) Cumulative charges incurred to date include $ 3.8 million in sales, general and administrative expense and $ 2.1 million in research and development expense.

Charges included employee separation costs comprised of approximately $ 2.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification ("WARN") Act and approximately $ 2.3 million of severance costs.

Charges included in other costs are primarily related to legal expenses incurred in connection with employee separation matters.

In connection with the restructuring and strategic shift, we incurred an additional $ 389.9 million in costs.

These primarily include $ 359.3 million of accelerated amortization of certain intangible assets, $ 15.0 million of IPR&D impairment charges, charges of $ 8.1 million related to excess inventory due to decreased external demand, $ 3.9 million for estimated losses on purchase commitments tied to anticipated future excess inventory included in cost of revenue, and $ 3.1 million of accelerated depreciation of fixed assets.

Balance Sheet Components for additional information on the IPR&D impairment assessment and the change in estimated useful life of the intangible asset and accelerated amortization.

A summary of the liabilities related to the restructuring is as follows:

(In thousands, excluding non-cash activities)

Employee Separation Costs

Other Costs Total

Expense recorded in YTD 2025 $ 4,787 $ 1,076 $ 5,863

Cash paid during YTD 2025 ( 4,787 ) ( 687 ) ( 5,474 )

Amount recorded in current liabilities

as of December 31, 2025

$ — $ 389 $ 389

Estimated total restructuring costs to still be incurred $ — $ — $ —

Fiscal 2025 Form 10-K

2024 Restructuring

During the year ended December 31, 2024, we implemented an expense reduction initiative that included workforce reductions, the closing of our San Diego office, and other actions to reduce annualized run-rate operating expenses.

A summary of the pre-tax restructuring charges are as follows:

(in thousands) Year Ended

(In thousands)

December 31, 2025

4 unchanged sentences

$ 888 $ 26,110

(1) For the year ended December 31, 2024, cumulative charges incurred to date include $ 14.9 million in sales, general and administrative expense;

(1) Cumulative charges incurred to date include $ 15.8 million in sales, general and administrative expense;

$ 5.9 million in research and development expense;

and $ 4.4 million in cost of revenue.

Cumulative charges incurred to date include employee separation costs comprised of approximately $ 5.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification (WARN) Act and approximately $ 4.5 million of severance costs.

Other costs in the year ended December 31, 2024 are primarily related to accelerated amortization and depreciation of $ 8.1 million for the right-of-use asset, leasehold improvements, and furniture and fixtures relating to the abandonment of the San Diego office.

Cumulative charges incurred to date include employee separation costs comprised of approximately $ 5.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the WARN Act and approximately $ 4.5 million of severance costs.

Other costs in cumulative charges incurred to date are primarily related to accelerated amortization and depreciation of $ 8.1 million for the right-of-use asset, leasehold improvements, and furniture and fixtures relating to the abandonment of the San Diego office.

We also incurred cumulative charges to date for excess inventory of $ 3.6 million primarily relating to a decrease in internal demand resulting from the expense reduction initiatives which were recognized in cost of product revenues.

4 unchanged sentences

(In thousands)

Employee Separation Costs

Other Costs Total

Expense recorded in YTD 2024 $ 10,008 $ 2,816 $ 12,824

Cash paid during YTD 2024 ( 10,008 ) ( 2,646 ) ( 12,654 )

Amount recorded in current liabilities as of December 31, 2024 $ 170 $ 170

Additional expense recorded

Cash payments

( 1,058 ) ( 1,058 )

Amount recorded in current liabilities as of December 31, 2025

Estimated total restructuring costs to still be incurred $ — $ —

The table above excludes noncash activities and amounts incurred relating to the San Diego office lease liability.

The ending balance of the San Diego office lease liability as of December 31, 2024 is $ 2.6 million, and is included in operating lease liabilities, current on our consolidated balance sheets.

The other restructuring costs are expected to be incurred and paid by the end of 2025.

Fiscal 2024 Form 10-K

The ending balance of the San Diego office lease liability as of December 31, 2025 is $ 0 .

COMMITMENTS AND CONTINGENCIES

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Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments, such as common area maintenance fees, recognized in the period those payments are incurred.

Fiscal 2025 Form 10-K

We often have options to renew lease terms for buildings.

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We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors.

On March 7, 2025, we amended our existing lease covering our corporate headquarters, as well as our research and development, manufacturing, and distribution facilities in Menlo Park, California.

The lease amendment extends the term to April 30, 2034.

We will pay approximately $ 97.7 million in base rent over the life of the amended lease and receive base rent abatement of approximately $ 11.6 million for the period beginning on March 1, 2025 and ending on July 31, 2026.

We are also entitled to a tenant improvement allowance of $ 7.2 million.

The lease amendment increased our operating lease right-of-use assets and operating lease liabilities by $ 29.6 million on our condensed consolidated balance sheets.

As of December 31, 2025, the maturities of our operating lease liabilities were as follows:

(In thousands)

2025 $ 11,481

Thereafter 46,752

Total undiscounted operating lease payments 98,171

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We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Fiscal 2024 Form 10-K

We do not believe that the ultimate outcome of any such pending matters is probable or reasonably estimable, or that these matters will have a material adverse effect on our business;

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Regardless of the outcome, litigation can have an adverse impact on us because of litigation and settlement costs, diversion of management resources, and other factors.

Fiscal 2025 Form 10-K

Please see subsection titled Legal Proceedings , in Part I, Item 3 of this Annual Report on Form 10-K.

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We recognized a loss on purchase commitment of $ 4.2 million for the year ended December 31, 2025, which was recorded as part of accrued expenses on our consolidated balance sheet and is included in the aforementioned purchase orders and contractual obligations amount.

The purchase commitment loss is based on an estimate of future excess inventory related to supply agreements with third-party vendors, for which we do not expect to have related sales.

The purchase commitment loss is based on our estimate of future excess inventory under supply agreements with third-party vendors for which we do not expect to have related sales.

We have a long-term supply agreement, which was most recently amended in September 2025 (the “Supply Agreement”), for the purchase of certain products with a semiconductor manufacturer (“Supplier”).

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We are responsible for providing certain materials to allow our Supplier to perform its obligations under the contract.

We paid our Supplier a deposit of $ 9.0 million in November 2022 and an additional deposit of $ 6.0 million in 2023, for a total of $ 15.0 million (the “Deposit”).

The Deposit is fully refundable to us, in accordance with the Supply Agreement, if we meet the minimum volume purchase commitment for the applicable year.

$ 3.0 million was refunded to us during the year ended December 31, 2024.

As of December 31, 2024, $ 4.0 million related to the Deposit was included in prepaid expenses and other current assets on our consolidated balance sheets and $ 8.0 million related to the Deposit was included in other long-term assets on our consolidated balance sheets, as we believe it is probable the minimum volume purchase commitment level will be achieved.

Fiscal 2024 Form 10-K

We paid our Supplier deposits totaling $ 15.0 million (the “Deposit”), of which $ 4.0 million and $ 3.0 million was refunded to us during the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, $ 8.0 million related to the Deposit was included in other long-term assets on our consolidated balance sheets, as we believe it is probable the minimum volume purchase commitment level will be achieved.

We are subject to income taxes both in the United States and certain foreign jurisdictions in which we operate, and we use estimates in determining our provisions for income taxes.

Significant management judgement is required in determining our provision for income taxes, deferred tax assets and liabilities, and valuation allowances recorded against net deferred tax assets in accordance with U.S.

These estimates and judgements occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions.

These estimates and judgements occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain tax

Fiscal 2025 Form 10-K

assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions.

Significant changes to these estimates may result in an increase or decrease to our tax provision in the current or subsequent period.

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(In thousands)

Total current $ 521 $ — $ —

Federal ( 8 ) ( 9,956 ) —

State ( 197 ) ( 1,468 ) —

2025 2024 2023

Current tax provision (benefit):

US Federal $ — $ — $ —

US State — — —

Foreign 864 521 —

Total deferred ( 205 ) ( 11,424 ) —

Income tax provision (benefit) $ 316 $ ( 11,424 ) $ —

Total current tax provision (benefit) 864 521 —

Deferred tax expense (benefit):

US Federal ( 275 ) ( 8 ) ( 9,956 )

US State ( 271 ) ( 197 ) ( 1,468 )

Foreign — — —

Total deferred tax provision (benefit) ( 546 ) ( 205 ) ( 11,424 )

Total income tax provision (benefit)

US Federal ( 275 ) ( 8 ) ( 9,956 )

US State ( 271 ) ( 197 ) ( 1,468 )

Foreign 864 521 —

Total income tax provision (benefit) $ 318 $ 316 $ ( 11,424 )

Fiscal 2025 Form 10-K

Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows:

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2025 2024 2023

Statutory tax rate 21.0 % 21.0 % 21.0 %

State tax rate, net of federal benefit 1.9 3.0 4.4

Change in valuation allowance ( 10.8 ) ( 20.0 ) ( 25.1 )

Tax credits 1.5 2.0 2.2

Share-based compensation ( 3.7 ) ( 2.1 ) ( 2.2 )

Merger Expenses — ( 0.1 ) —

(Amounts in thousands)

Amount Percent Amount Percent Amount Percent

At statutory tax rate $ ( 114,672 ) 21.0 % $ ( 65,002 ) 21.0 % $ ( 66,807 ) 21.0 %

State and local income taxes, net of federal income tax effect

( 741 ) 0.1 ( 1,100 ) 0.4 ( 2,250 ) 0.7

( 1,654 ) 0.3 ( 6,677 ) 2.2 ( 7,596 ) 2.4

Nontaxable or nondeductible items:

Stock compensation

9,845 ( 1.8 ) 10,526 ( 3.4 ) 5,851 ( 1.8 )

Goodwill impairment

— — 30,345 ( 9.8 ) — —

Other ( 3,515 ) 0.6 793 ( 0.3 ) 1,513 ( 0.5 )

Total ( 0.1 ) % 3.6 % ( 0.1 ) %

Effect of cross-border tax laws

367 ( 0.1 ) 405 ( 0.1 ) ( 6 ) —

Changes in valuation allowance

107,803 ( 19.7 ) 27,394 ( 8.9 ) 55,413 ( 17.4 )

Other 781 ( 0.1 ) 291 ( 0.1 ) 1 —

Foreign tax effects

557 ( 0.1 ) 219 ( 0.1 ) 362 ( 0.1 )

Changes in unrecognized tax benefits

1,547 ( 0.3 ) 3,122 ( 1.0 ) 2,095 ( 0.7 )

Total effective tax rate

$ 318 ( 0.1 ) $ 316 ( 0.1 ) $ ( 11,424 ) 3.6

For the years ended December 31, 2025, 2024 and 2023, state and local income taxes in California and Massachusetts comprise the majority of the state and local income taxes, net of federal effect category.

Fiscal 2025 Form 10-K

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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11,424 94,768

Deferred Tax Liabilities:

Intangibles ( 1,810 ) ( 91,504 )

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entities as we have concluded that it is more likely than not that we will not realize our deferred tax assets.

For the year ended December 31, 2024, the Company's valuation allowance increased to $ 558.8 million, primarily because of an increase in our credits and capitalized research & experimental expenses that were fully offset by a valuation allowance.

For the year ended December 31, 2023, the Company's valuation allowance increased to $ 525.7 million, primarily because of an increase in our net operating losses, credits, and capitalized research and experimental expenses that were fully offset by a valuation allowance.

As of December 31, 2024, we had a net operating loss carryforward for federal income tax purposes of approximately $ 1,704.2 million, of which $ 783.2 million is subject to expiration beginning in 2025.

For the year ended December 31, 2025, the Company's valuation allowance increased to $ 679.0 million, primarily because of an increase in our net operating losses and credits that were fully offset by a valuation allowance.

For the year ended December 31, 2024, the Company's valuation allowance increased to $ 558.8 million, primarily because of an increase in our credits and capitalized research and experimental expenses that were fully offset by a valuation allowance.

The change in valuation allowance of $ 120.2 million was charged to continuing operations.

Fiscal 2025 Form 10-K

Net Operating Loss and Tax Credit Carryforwards

As of December 31, 2025, we had a net operating loss carryforward for federal income tax purposes of approximately $ 1,844.8 million, of which $ 779.3 million is subject to annual expirations beginning in 2026.

We had a total state net operating loss carryforward of approximately $ 1,222.9 million, which is subject to annual expirations.

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These tax credits are subject to the same limitations discussed above.

Fiscal 2024 Form 10-K

Unrecognized Tax Benefits

As of December 31, 2025, our total unrecognized tax benefit was $ 19.2 million.

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Balance as of December 31, 2022 $ 10,410

Decrease in balance related to tax positions taken in prior year ( 10 )

Increase in balance related to tax positions taken in prior year 2,044

Increase in balance related to tax positions taken during current year 2,100

Balance as of December 31, 2023 14,554

Increase in balance related to tax positions taken in prior year 2,044

Decrease in balance related to tax positions taken in prior year ( 6 )

Increase in balance related to tax positions taken during current year 3,128

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We are not currently under examination by income tax authorities in any jurisdiction.

Fiscal 2025 Form 10-K

Income Taxes Paid

Income taxes paid net of refunds received exceeding 5% of the annual total by jurisdiction:

Years ended December 31,

(In thousands)

2025 2024 2023

State and Local

United Kingdom

Other foreign jurisdictions

Total foreign

Total income taxes paid

$ 481 $ 256 $ 140

* Income tax paid net of refunds received did not exceed 5% of the annual total by jurisdiction.

STOCKHOLDERS' EQUITY

Common and Preferred Stock

Our Certificate of Incorporation, as amended and restated in October 2010 in connection with the closing of our initial public offering, authorizes us to issue 1,000,000,000 shares of $ 0.001 par value common stock and 50,000,000 shares of $ 0.001 par value preferred stock.

Our Certificate of Incorporation, as amended and restated in 2010 in connection with the closing of our initial public offering, authorizes us to issue 1,000,000,000 shares of $ 0.001 par value common stock and 50,000,000 shares of $ 0.001 par value preferred stock.

As of December 31, 2025 and 2024, there were no shares of preferred stock issued or outstanding.

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The total net proceeds to us from the offering after deducting the underwriting discount were approximately $ 189.7 million, excluding approximately $ 0.5 million of offering expenses.

Fiscal 2024 Form 10-K

The 2020 Equity Incentive Plan (the “2020 Plan”), the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”), and the 2021 adopted Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc.

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The 2010 Employee Stock Purchase Plan (the “ESPP”) allows eligible employees to acquire common stock at a discounted price through payroll deductions during designated offering periods.

On May 25, 2022, stockholders approved an amendment to the 2020 Plan, and we reserved an additional 18.0 million shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

On June 18, 2024, stockholders approved an amendment to the 2020 Plan, and we reserved an additional 20.0 million shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

Fiscal 2025 Form 10-K

On June 18, 2024, our stockholders approved an amendment to the 2020 Plan, and we reserved an additional 20.0 million shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

On June 4, 2025, our stockholders approved an amendment to the 2020 Plan, and we reserved an additional 23.0 million shares of our common stock for issuance pursuant to equity awards granted under the 2020 Plan.

As of December 31, 2025, we had 38.6 million shares remaining and available for future issuance under the 2020 Plan, Inducement Plan, and the Omniome Plan.

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The aggregate intrinsic value changes at each reporting date based on the fair market value of our common stock.

The vested and exercisable options as of December 31, 2024, totaled 9,429,082 shares, had an aggregate intrinsic value that was not significant, a weighted-average exercise price per share of $ 11.26 , and a weighted-average remaining contractual life of 5.1 years.

The vested and exercisable options as of December 31, 2025, totaled 9,817,500 shares, had an aggregate intrinsic value that was $ 1.5 million, a weighted-average exercise price per share of $ 9.28 , and a weighted-average remaining contractual life of 5.6 years.

The vested and expected to vest options as of December 31, 2025, totaled 15,136,547 shares, had an aggregate intrinsic value of $ 4.7 million, a weighted-average exercise price per share of $ 6.63 , and a weighted-average remaining contractual life of 6.8 years.

The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023, and 2022 was $ 0.8 million, $ 8.8 million, and $ 5.0 million, respectively.

There were no stock options exercised during the year ended December 31, 2025.

The total intrinsic value of stock options exercised during the years ended December 31, 2024 and 2023 was $ 0.8 million, and $ 8.8 million, respectively.

The total intrinsic value of options exercised represents the difference between our closing stock price on the exercise date and the option exercise price, multiplied by the number of in-the-money options exercised.

The weighted-average grant-date fair value of all options granted was $ 0.90 in 2025, $ 1.40 in 2024, and $ 7.32 in 2023, each determined by the Black-Scholes option valuation method.

Fiscal 2024 Form 10-K

Restricted Stock Units ("RSU") and Performance Stock Units ("PSU")

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Each RSU represents the right to receive one share of our common stock upon meeting the required service-based vesting conditions.

RSUs typically vest over four years , with equal annual installments.

RSUs typically vest over two to four years , with equal annual installments.

In 2023, PSUs were granted and are based on performance against predefined revenue targets and require continued employment throughout the vesting period.

These shares become issuable after the third year of the performance period.

These PSUs become issuable after the third year of the performance period.

Achieving the maximum revenue goal allows up to 200 % of the target PSU shares to become eligible for vesting, while failing to meet the minimum revenue goal results in no shares vesting.

Fiscal 2025 Form 10-K

The following table summarizes the time-based RSU and PSU activity:

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Outstanding at December 31, 2025 17,551 392 $ 3.50 $ 9.43

The total fair value of shares vested related to RSUs during the years ended December 31, 2024, 2023, and 2022 was $ 47.2 million, $ 39.3 million, and $ 39.2 million, respectively.

The total fair value of shares vested related to RSUs during the years ended December 31, 2025, 2024, and 2023 was $ 42.1 million, $ 47.2 million, and $ 39.3 million, respectively, based on the grant date fair value of each RSU award.

The weighted-average grant-date fair value of all RSUs granted was $ 1.26 in 2025, $ 5.02 in 2024, and $ 9.65 in 2023.

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As of December 31, 2025 and 2024, $ 0.4 million and $ 0.6 million of share-based compensation cost was capitalized in inventory, net, on our consolidated balance sheets, respectively.

Fiscal 2024 Form 10-K

We estimate forfeitures related to our share-based compensation plans.

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entities, for which we have concluded that it is more likely than not that we will not realize our deferred tax assets.

Fiscal 2025 Form 10-K

Determining Fair Value

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Weighted-average grant date fair value per share $ 0.90 $ 1.40 $ 7.32

Cash received from option exercises for the years ended December 31, 2024, 2023, and 2022 was $ 1.6 million, $ 6.5 million and $ 3.4 million, respectively.

Fiscal 2024 Form 10-K

There were no stock options exercised during the year ended December 31, 2025.

Cash received from option exercises for the years ended December 31, 2024 and 2023 was $ 1.6 million and $ 6.5 million, respectively.

The fair value of shares to be issued under the ESPP was estimated using the following assumptions:

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As of December 31, 2025, $ 46.8 million of total unrecognized compensation expense related to stock options, restricted stock, and ESPP shares was expected to be recognized over a weighted-average period of 1.6 years.

Fiscal 2025 Form 10-K

NET LOSS PER SHARE

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(In thousands, except per share amounts)

2025 2024 2023

Basic net loss $ ( 546,376 ) $ ( 309,851 ) $ ( 306,735 )

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Diluted net loss per share $ ( 1.82 ) $ ( 1.59 ) $ ( 1.21 )

Fiscal 2024 Form 10-K

The following shares issuable upon conversion of the convertible senior notes and outstanding equity awards were excluded from the computation of diluted net loss per share for the periods presented because the effect of including such shares would have been antidilutive:

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• total expenses and expenses by function, including sales and marketing and general and administrative, which include depreciation and share-based compensation

Fiscal 2025 Form 10-K

• net loss per share

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Therefore, geographic information is presented only for revenue.

Fiscal 2024 Form 10-K

A summary of the segment profit or loss, including significant segment expenses is as follows:

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Gain on debt restructuring — ( 154,407 ) —

Other income (expense), net 10,371 18,341 ( 7,052 )

Other income, net 7,803 10,371 18,341

Income tax provision (benefit) 318 316 ( 11,424 )

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Asia-Pacific 43,156 40,709 54,453

Total $ 154,014 $ 200,521 $ 128,304

Total revenue $ 160,005 $ 154,014 $ 200,521

(1) Includes United States revenue of $ 69.7 million, $ 75.3 million, and $ 100.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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Instrument revenue $ 53,819 $ 65,776 $ 120,451

Consumable revenue 70,373 63,421 59,980

Consumables revenue 81,939 70,373 63,421

Product revenue 135,758 136,149 183,872

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SUBSEQUENT EVENTS

On March 7, 2025, we entered into an amendment to our existing lease for our corporate headquarters, research and development facilities, and manufacturing and distribution centers in Menlo Park, California.

The lease amendment extends the term from the prior expiration on October 31, 2027 to its new expiration on April 30, 2034.

We will pay approximately $ 97.7 million in base rent over the life of the amended lease, and receive base rent abatement of approximately $ 11.6 million for the period beginning on March 1, 2025 and ending on July 31, 2026.

We are also entitled to a tenant improvement allowance of $ 7.2 million.

On March 7, 2025, we entered into an agreement to acquire certain technology and related intellectual property from the Chinese University of Hong Kong for $ 9.7 million.

On January 30, 2026, we completed a disposition of certain assets to Buyer pursuant to an Asset Purchase Agreement dated January 30, 2026.

Under the agreement, Buyer acquired certain intellectual property and other assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies.

In consideration, Buyer paid $ 50.0 million in cash, assumed certain liabilities, and granted us a non-exclusive license to certain intellectual property included in the purchased assets.

In connection with the Asset Sale, Buyer will pay, at our direction, 4 % of the net cash proceeds to the former equity holders of Apton Biosystems, Inc.

in connection with the waiver of remaining milestone obligations from our August 2023 acquisition of Apton, with such payment expected in the first quarter of 2026.

As a result, we received approximately $ 48.1 million in net cash proceeds from the Asset Sale.

Fiscal 2025 Form 10-K

1 unchanged sentence

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 8. Financial Statements and Supplementary Data