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Item 7. Management’s Discussion and Analysis

2026-02-13 compared with 2025-02-13 · 178 added, 109 removed, 228 unchanged (56% of the section changed)

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We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biology.

Our integrated solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology.

Our commercial product portfolio leverages our Chromium instruments and our Visium CytAssist and our Xenium Analyzer, which we refer to as “Spatial instruments,” and our proprietary microfluidic chips, slides, reagents and other consumables for our Chromium, Visium and Xenium solutions, which we refer to as “consumables.” We bundle our software with these products to guide customers through the workflow, from sample preparation through analysis and visualization.

Our integrated research solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology.

Our commercial product portfolio is made up of our Single Cell and Spatial solutions.

Our products include our instruments, which include our Chromium instruments, our Visium CytAssist and our Xenium Analyzer, and our consumables, which include proprietary microfluidic chips, slides, reagents and other consumables for our Single Cell and Spatial solutions.

We bundle our software with these products to guide customers through the workflow, from sample preparation through analysis and visualization.

Customers purchase instruments and consumables from us for use in their experiments.

In addition to instrument and consumable sales, we derive revenue from post-warranty service contracts for our instruments.

Since our inception in 2012, we have incurred net losses in each year.

Our net losses were $182.6 million and $255.1 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, we had an accumulated deficit of $1.5 billion and cash and cash equivalents and marketable securities totaling $393.4 million.

We expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term.

We expect our expenses will modestly increase in connection with our ongoing activities, including in connection with our efforts to attract, hire and retain qualified personnel.

We also derive revenue from post-warranty service contracts for our instruments.

In August 2025, we entered into an agreement to acquire all outstanding shares of common stock of Scale Biosciences, Inc.

(“Scale Bio”), a single cell genomics technology company.

Upon closing the transaction in August 2025, we made an upfront payment consisting of $9.2 million in cash and $13.5 million (1,099,992 shares) in shares of our Class A common stock.

In the first quarter of 2026, we expect to pay $20.0 million, subject to any adjustments, in cash and in shares of our Class A common stock in connection with the technology transfer completed in the third quarter of 2025.

In the future, we may pay up to $30.0 million of contingent consideration if certain milestones are met.

The transaction was accounted for as an asset acquisition because substantially all of the fair value of the assets acquired is concentrated in the developed technology.

We determined that the contingent consideration was within the scope of ASC 480, Distinguishing Liabilities from Equity , because the contingent consideration is payable in cash or shares of our Class A common stock, at our election.

The contingent consideration was recorded at fair value as of the acquisition date.

Upon closing, we recognized $22.4 million for the fair value of the contingent consideration.

Refer to Note 4, Acquisitions , in the Notes to consolidated financial statements included in this Annual report on Form 10-K, for a description of the fair value measurement of the contingent consideration.

Key business metrics

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2025 2024 2023

Chromium 5,808 5,180 4,411

Visium CytAssist 810 531 211

Xenium 421 255 8

Chromium (Single Cell) 6,477 5,808 5,180

Visium (Spatial) 1,015 810 531

Xenium (Spatial) 554 421 255

Cumulative instruments sold 8,046 7,039 5,966

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We define cumulative instruments sold as the cumulative number of Chromium instruments, Visium CytAssists and Xenium Analyzers sold since inception.

Our quarterly instrument unit volumes can fluctuate due to a number of factors, including the procurement and budgeting cycles of many of our customers, especially government and academic institutions where unused funds may be forfeited or future budgets reduced if purchases are not made by their fiscal year end, and the purchasing patterns of international customers which vary due to procurement or budgeting cycles, holidays or other factors which may result in a disproportionate amount of their purchasing activity occurring in specific periods.

Similarly, our biopharmaceutical customers typically have calendar year fiscal years which may result in a disproportionate amount of their purchasing activity occurring during our fourth quarter.

Our quarterly instrument unit volumes can fluctuate due to a number of factors, including the procurement and budgeting cycles of many of our customers and the availability of academic and government research funding.

We also believe the timing of unit sales has been impacted and will continue to be impacted by the timing of product introductions and transitions which can either accelerate or delay demand of existing and new products or new versions of existing products depending on the needs of individual researchers to conclude existing studies or to use capabilities of new products or versions.

Also, the timing and magnitude of our price changes can influence quarterly instrument unit volumes.

For example, we believe that historical announcements of price increases have caused customers to pull forward purchases of instruments.

Conversely, we anticipate that announced price decreases could postpone instrument purchases to future quarters.

For example, we believe that historical announcements of price changes have caused customers to pull forward purchases or postpone purchases of instruments.

We therefore believe that an annual representation of cumulative instruments sold is most appropriate for assessing trends in our business.

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2025 2024 2023

Chromium 310,900 312,500 290,900

35,400 29,300 28,300

Xenium 10,800 5,200 100

Chromium (Single Cell) 378,300 310,900 312,500

Visium (Spatial) 31,200 35,400 29,300

Xenium (Spatial) 14,500 10,800 5,200

Total consumable reactions 424,000 357,100 347,000

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Reactions represent the unit volumes that we sell when a researcher purchases our consumables.

As such, consumable reactions sold is an appropriate metric for assessing trends in our business.

As such, we believe consumable reactions sold is an appropriate metric for assessing trends in our business.

The figures in the table above (rounded to the nearest hundred) represent the total consumable reactions, by product platform and in total, for the years ended December 31, 2025, 2024 and 2023.

For the year ended December 31, 2025, Chromium Single Cell reactions include Chromium and Scale Bio reactions.

As we expand our product portfolios and as our business evolves, we will continue to evaluate the key metrics of our business.

We may change or substitute these for additional or different metrics if we determine such other metrics are meaningful in understanding our business.

Key factors affecting our performance

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We expect the number of cumulative instruments sold to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.

We plan to grow our instrument sales in the coming years through multiple strategies including expanding our sales efforts globally, adjusting prices for our instruments and continuing to enhance the underlying technology and applications for life sciences research.

We plan to support instrument sales in the coming years through multiple strategies including expanding our sales efforts globally, adjusting prices for our instruments and continuing to enhance the underlying technology and applications for life sciences research.

We regularly solicit feedback from our customers and focus our research and development efforts on enhancing the fleet of 10x instruments and enabling their ability to use additional applications that address their needs, and we believe that these efforts help to drive sales of our instruments and consumables.

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We believe that price changes can affect purchasing decisions by our customers and potential customers.

We believe that lowering prices for our products can unlock elasticity of demand and increase purchases of both instruments and consumables.

We expect to lower prices for certain of our products in 2025 and expect sales of our instruments and consumables to increase over time as a result of introducing lower prices for our instruments and consumables.

We expect average selling prices for certain products to decline over time as we expand our portfolio with lower-priced instruments and consumables and products which can lower the total cost of an experiment.

We believe that lowering prices for our products can expand usage and we anticipate that increased adoption and volume growth will drive higher overall sales of our instruments and consumables over time.

Revenue mix and gross margin

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We expect the mix of direct sales as compared to sales through distributors to remain relatively constant in the near term.

We expect our gross margin to trend lower due in part to change in product mix with newly introduced products and product versions, lower prices of our products and the impacts of inflation including, among other impacts, employee compensation and benefits and increased supply chain costs.

We expect our gross margin to fluctuate throughout 2026 due to a number of factors including changes in product mix and the non-recurring benefit in license and royalty revenue experienced in the first half of 2025.

Continued investment in growth

Historically, our revenue growth has been driven by the development of new solutions and quick adoption of our solutions by our customer base.

We intend to continue to make focused investments to support the growth of our business and therefore expect expenses to increase.

We intend to continue to make focused investments to support the growth of our business.

Excluding acquisitions, we do not expect our operating expenditures to meaningfully increase in 2026.

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We have made, and intend to continue to make, investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products and new versions of existing products in the future.

Such investments could take the form of an acquisition of a business, asset acquisition or the exclusive or non-exclusive in-license of intellectual property rights.

Such investments could take the form of an acquisition of a business, asset acquisition or the exclusive or non-exclusive

in-license of intellectual property rights.

Any such acquisitions we make may affect our future financial results.

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Components of Results of Operations

We generate virtually all of our revenue through the sale of our instruments and consumables to customers.

Products and services revenue.

We generate virtually all of our products and services revenue through the sale of our instruments and consumables to customers.

We also generate a small portion of our revenue from instrument service agreements which relate to extended warranties.

Our revenue is subject to fluctuation based on the foreign currency in which our products are sold, principally for sales denominated in the euro, Great British pound and Japanese yen.

Our revenue from consumables includes sales of our Chromium, Visium and Xenium consumable products.

Our revenue from consumables includes sales of our Single Cell and Spatial consumable products.

Our consumables are designed to work exclusively with our instruments.

Our Chromium, Xenium and Visium consumables require the use of a 10x Genomics instrument, with the exception of our Spatial Gene Expression v1 solution.

Our Single Cell and Spatial consumables require the use of a 10x Genomics instrument, with the exception of our QuantumScale Single Cell RNA kit, Single Cell Methylation kit and Visium v1 3’ Gene Expression solution.

Our instruments and consumables are generally sold without the right of return.

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Revenue from the sale of instrument service agreements are recognized ratably over the coverage period.

Cost of revenue, gross profit and gross margin

Cost of revenue.

Cost of revenue primarily consists of manufacturing costs incurred in the production process including personnel and related costs, costs of component materials, manufacturing overhead, packaging and delivery costs and allocated costs including facilities and information technology.

In addition, cost of revenue includes royalty costs for licensed technologies included in our products, warranty costs, provisions for slow-moving and obsolete inventory and personnel and related costs and component costs incurred in connection with our obligations under our instrument service agreements.

When applicable, we record royalty accruals relating to sales of our products as cost of revenue.

License and royalty revenue.

We have agreements with third parties that include up-front fees and royalties.

Revenue related to the delivery of intellectual property is recognized when the license is delivered to the third parties.

Royalty revenue is recognized when the underlying sales occur.

We also record allocated license and royalty revenue from patent litigation settlements.

Cost of products and services revenue, gross profit and gross margin

Cost of products and services revenue.

Cost of products and services revenue primarily consists of manufacturing costs incurred in the production process including personnel and related costs, costs of component materials, manufacturing overhead, packaging and delivery costs and allocated costs including facilities and information technology.

In addition, cost of products and services revenue includes royalty costs for licensed technologies included in our products, warranty costs, provisions for slow-moving and obsolete inventory and personnel and related costs and component costs incurred in connection with our obligations under our instrument service agreements.

When applicable, we record royalty accruals relating to sales of our products as cost of products and services revenue.

Gross profit/gross margin.

Gross profit is calculated as revenue less cost of revenue.

Gross profit is calculated as revenue less cost of products and services revenue.

Gross margin is gross profit expressed as a percentage of revenue.

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product mix changes between established products and new products and new versions of existing products;

impacts of inflation and increased supply chain costs;

impacts of inflation, tariffs and increased supply chain costs;

excess and obsolete inventories;

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and product warranty obligations.

We currently anticipate that we will experience an increase in absolute dollars of both revenue and cost of revenue as we grow our business.

Research and development

Research and development expense primarily consists of personnel and related costs, independent contractor costs, laboratory supplies, equipment maintenance prototype and materials expenses, amortization of developed technology and intangibles and allocated costs including facilities and information technology.

We plan to continue to modestly invest in our research and development efforts to enhance existing products and develop new products and new versions of existing products.

As a result of these and other initiatives, we expect research and development expense will modestly increase in absolute dollars in future periods and vary from period to period as a percentage of revenue.

We plan to continue to invest in our research and development efforts to enhance existing products and develop new products and new versions of existing products.

As a result of our ongoing efforts to manage our spend, we expect our research and development expense to modestly decrease in 2026 versus the prior year.

In-process research and development

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We expect these costs to be recognized, in most cases, only in periods during which we complete an acquisition of assets comprised in whole or part of intellectual property for research and development.

We periodically evaluate acquisitions of this nature.

Selling, general and administrative

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Related costs associated with these functions, such as attorney and accounting fees, recruiting services, administrative services, insurance, public relations and communication activities, marketing programs and trade show appearances, travel, customer service costs, safety equipment purchases and cleaning and allocated costs including facilities and information technology, are also included in selling, general and administrative expenses.

We expect to incur additional selling, general and administrative expenses due to continued investment in our sales, marketing and customer service efforts to support the anticipated growth of our business.

We expect infrastructure costs including allocated facilities and information technology costs to remain flat in absolute dollars.

As a result of these and other initiatives, we expect selling, general and administrative expenses to vary from period to period as a percentage of revenue and increase in absolute dollars in future periods.

As a result of the increased effectiveness of our commercial organization and our ongoing efforts to manage our spend, we expect our selling, general and administrative expense to modestly decrease in 2026 versus the prior year.

We expect infrastructure costs including allocated facilities and information technology costs to modestly decrease in absolute dollars.

We expect our stock-based compensation expense allocated to cost of revenue, research and development expenses and selling, general and administrative expenses to decrease in absolute dollars.

Gain on settlement

When we enter into settlement and license agreements with various parties to resolve outstanding litigation and other proceedings between these parties, we have recognized, and may in the future recognize a gain on settlement for royalties earned on historical revenues by such parties.

Interest income

Interest income consists of interest earned on our cash and cash equivalents which are invested in bank deposits, money market funds and marketable securities.

Interest income consists of interest earned on our cash and cash equivalents which are invested in bank deposits, money market funds and marketable securities and accretion of discount and amortization of premium on marketable securities.

Other income (expense), net

Other income (expense), net primarily consists of realized and unrealized gains and losses related to foreign exchange rate remeasurements.

Other income (expense), net primarily consists of realized and unrealized gains and losses related to foreign exchange rate remeasurements and fair value adjustments on contingent consideration.

Provision for income taxes

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As of December 31, 2025, we had federal net operating loss (“NOL”) carryforwards of $808.1 million and federal tax credit carryforwards of $93.8 million.

Our federal NOLs generated after December 31, 2017, which total $632.9 million, are carried forward indefinitely, while all of our other federal NOL and tax credit carryforwards expire beginning in 2033.

As of December 31, 2024, we had state NOL carryforwards of $424.5 million, which primarily expire beginning in 2033.

In addition, we had state tax credit carryforwards of $68.3 million, which carry forward indefinitely.

Our federal NOL carryforwards generated after December 31, 2017, which total $802.3 million, are carried forward indefinitely, while all of our other federal NOL and tax credit carryforwards expire beginning in 2033 and 2036 respectively.

As of December 31, 2025, we had state NOL carryforwards of $506.5 million, which begin to expire primarily in 2033.

In addition, we had state tax credit carryforwards of $77.4 million, which do not expire.

Our ability to utilize such carryforwards for income tax savings is subject to certain conditions and may be subject to certain limitations in the future due to ownership changes.

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2025 2024 2023

Products and services revenue $ 596,688 $ 610,464 $ 618,727

License and royalty revenue 46,135 321 —

Revenue 642,823 610,785 618,727

Cost of revenue 196,303 209,414 120,386

Cost of products and services revenue 198,942 196,303 209,414

Gross profit 443,881 414,482 409,313

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Research and development 238,632 264,698 270,332

264,698 270,332 265,667

In-process research and development — 60,980 —

Selling, general and administrative 316,134 344,343 343,330

344,343 343,330 298,300

Gain on settlement (49,900) — —

In-process research and development — — 60,980

Total operating expenses 504,866 609,041 674,642

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Interest expense — (4) (33)

Other expense, net (1,585) (307) (198)

Other income (expense), net 1,030 (2,067) (286)

Total other income 21,078 16,859 16,566

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Year Ended December 31, Change

Chromium $ 35,212 $ 47,866 $ (12,654) (26) %

(in thousands)

Single Cell $ 22,671 $ 35,212 $ (12,541) (36) %

Spatial 34,108 57,503 (23,395) (41) %

Total instruments revenue 56,779 92,715 (35,936) (39) %

Chromium 372,308 420,316 (48,008) (11) %

Single Cell 363,206 372,308 (9,102) (2) %

Spatial 143,977 121,124 22,853 19 %

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Services 32,726 24,317 8,409 35 %

Products and services revenue 596,688 610,464 (13,776) (2) %

License and royalty revenue 46,135 321 45,814 N/A

Total revenue $ 642,823 $ 610,785 $ 32,038 5 %

Revenue decreased $7.9 million, or 1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Instruments revenue decreased $30.8 million, or 25%, to $92.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to lower volume of Chromium and Spatial instruments sold.

Consumables revenue increased $13.9 million, or 3%, to $493.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by growth in Spatial consumables sales, partially offset by lower Chromium consumables sales due primarily to price decreases and changes in product mix.

Service revenue increased $8.9 million, or 57%, for the year ended December 31, 2024 as compared to year ended December 31, 2023, primarily driven by increased service plans for both Chromium and Spatial instruments.

Cost of Revenue, Gross Profit and Gross Margin

Product and Services Revenue

Product and services revenue decreased $13.8 million, or 2%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

Instruments revenue decreased $35.9 million, or 39%, to $56.8 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to price decreases and lower volume of Spatial instruments sold.

Consumables revenue increased $13.8 million, or 3%, to $507.2 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily driven by growth in Spatial consumables sales

partially offset by lower Single Cell consumables sales.

Service revenue increased $8.4 million, or 35%, for the year ended December 31, 2025 as compared to year ended December 31, 2024, primarily driven by an increase in service plans for instruments coming off warranty.

License and Royalty Revenue

In February 2025, we settled our worldwide patent litigation with Vizgen, Inc.

As part of that settlement, Vizgen has limited rights to certain intellectual property owned or exclusively licensed by us.

As one part of the settlement, we received an upfront payment of $26.0 million and receive royalties on Vizgen’s sales of products covered by the license.

The $26.0 million upfront payment was recorded as a $9.2 million gain on settlement and $16.8 million in license and royalty revenue.

The amount attributed to the gain on settlement was determined by applying a royalty rate to Vizgen’s historical revenues prior to the settlement.

In May 2025, we entered into a settlement agreement and license agreements with Bruker Corporation (“Bruker”) resolving all outstanding litigation and other proceedings between the parties across all jurisdictions around the world.

Under the agreements, we have the right to receive four quarterly installment payments beginning in the third quarter of 2025, which total $68.0 million, and applicable interest.

We will also receive royalties on Bruker’s sales of products and services covered by the license.

The $68.0 million amount was recorded as a $40.7 million gain on settlement and $27.3 million in license and royalty revenue.

The amount attributed to the gain on settlement was determined by applying a royalty rate to the historical revenues prior to the settlement.

Excluding $44.1 million of non-recurring revenue related to patent litigation settlements in 2025, we expect our revenues to moderately increase in 2026 as compared to 2025.

Cost of Products and Services Revenue, Gross Profit and Gross Margin

Year Ended December 31,

(dollars in thousands)

Cost of revenue $ 196,303 $ 209,414 $ (13,111) (6) %

Cost of products and services revenue $ 198,942 $ 196,303 $ 2,639 1 %

Gross profit $ 443,881 $ 414,482 $ 29,399 7 %

Gross margin 69 % 68 %

Cost of revenue decreased $13.1 million, or 6%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The decrease was primarily driven by lower manufacturing costs of $22.6 million due to decreased sales and change in product mix, partially offset by higher royalties of $9.8 million.

Cost of products and services revenue increased $2.6 million, or 1%, to $198.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The increase was primarily driven by higher manufacturing costs of $12.2 million due to a change in product mix and higher inventory write-downs of $7.8 million, partially offset by lower royalties of $12.5 million and lower warranty costs of $4.9 million.

Gross margin increased to 69% primarily due to higher license and royalty revenue, reflecting a 2.3% benefit to gross margin, and lower royalties and warranty costs, partially offset by an increase in inventory write-downs and higher manufacturing costs.

Operating Expenses

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Research and development $ 238,632 $ 264,698 $ (26,066) (10) %

In-process research and development — 60,980 (60,980) N/A

Selling, general and administrative 316,134 344,343 (28,209) (8) %

Gain on settlement (49,900) — (49,900) N/A

Total operating expenses $ 504,866 $ 609,041 $ (104,175) (17) %

Research and development expense decreased $26.1 million, or 10%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The decrease was primarily driven by a decrease in allocated costs for facilities and information technology of $2.7 million, a decrease in personnel expenses of $2.5 million, including a $6.5 million reduction in stock-based compensation expense, a decrease in depreciation and amortization of $1.4 million, partially offset by an increase in other expenses of $0.8 million.

In-process research and development expense recorded during the year ended December 31, 2023 related to the January 2023 agreement to acquire certain intangible and other assets from Centrillion Technologies, Inc.

and Centrillion Technology Holdings Corp.

which was accounted for as an asset acquisition.

In connection with the acquisition, we recognized an in-process research and development intangible asset of $61.0 million which did not have alternative future use and therefore was recognized as an expense during the period.

See Note 4 to the consolidated financial statements for further details.

There were no similar purchases in year ended December 31, 2024.

Selling, general and administrative expenses increased $1.0 million, or 0.3%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The increase was primarily driven by an increase in outside legal expenses of $21.2 million, an increase in allocated costs for facilities and information technology to support operational expansion of $1.7 million, partially offset by a decrease in personnel expenses of $18.6 million, including a $21 million reduction in stock-based compensation expense, and a decrease in other expenses of $4.4 million.

Excluding acquisitions, we do not expect our operating expenditures to meaningfully increase in 2025.

Other Income (Expense), Net

The decrease was primarily driven by a $21.7 million decrease in personnel expenses, including a $16.3 million decrease in stock-based compensation expense, a $4.0 million decrease in facilities and information technology costs, a $1.8 million decrease in equipment costs, a $1.5 million decrease in depreciation and amortization, and a $1.3 million decrease in other expenses, partially offset by restructuring charges of $4.1 million.

Selling, general and administrative expenses decreased $28.2 million, or 8.2%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The decrease was primarily driven by a decrease in outside legal expenses of

$25.6 million, a decrease in personnel expenses of $4.3 million, a decrease in marketing expenses related to advertising and conferences and seminars of $2.9 million, and a decrease in facilities and information technology costs of $1.2 million, partially offset by restructuring charges of $6.0 million.

As a result of our settlements of our worldwide patent litigation with Vizgen and Bruker in 2025, we recorded a gain on settlement of $9.2 million and $40.7 million, respectively.

Excluding a gain on settlement of $49.9 million in 2025, we expect our operating expenses to modestly decrease in 2026 versus the prior year as a result of our ongoing efforts to manage our spend.

Total Other Income

Year Ended December 31,

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Interest expense — (4) 4 (100) %

Other expense, net (1,585) (307) (1,278) 416 %

Other income (expense), net 1,030 (2,067) 3,097 (150) %

Total other income $ 21,078 $ 16,859 $ 4,219 25 %

Interest income increased by $1.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The increase was primarily due to interest income generated from our investments in marketable securities and an increase in interest rates during the year ended December 31, 2024.

Other expense, net increased by $1.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 and was driven by realized and unrealized losses from foreign currency rate measurement fluctuations.

Interest income increased by $1.1 million for the year ended December 31, 2025 primarily due to a gain from net accretion of discounts on the investment balance during that period.

Other income (expense), net increased by $3.1 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a $4.6 million increase in net realized and unrealized gains from foreign currency rate measurement fluctuations, partially offset by a $1.4 million change in fair value of contingent consideration related to the Scale Bio acquisition.

We remeasure the contingent consideration and assumed liabilities related to the Scale Bio acquisition within the scope of ASC 480 as of each applicable reporting period.

Upon remeasurement, we record the change in the fair value of the contingent consideration within other income (expense), net in our consolidated statement of operations.

We expect other income (expense), net, to potentially fluctuate, potentially significantly, from quarter to quarter due to potential changes in the fair value of the contingent consideration.

Provision for Income Taxes

The Company’s provision for income taxes was $4.9 million and $6.3 million, respectively, for the years ended December 31, 2024 and 2023.

Our provision for income taxes was $3.6 million and $4.9 million, respectively, for the years ended December 31, 2025 and 2024.

The provision for income taxes decreased by $1.3 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The decrease was primarily due to lower foreign income.

The decrease was primarily due to lower foreign income and the enactment of an Act to provide for reconciliation pursuant to title II of H.

on July 4, 2025 (the “Act”).

Among its provisions, the Act restored the immediate deductibility of U.S.

research and experimental expenditures, resulting in lower U.S.

taxable income and a corresponding reduction in the Company’s provision for income taxes.

Liquidity and Capital Resources

As of December 31, 2025, we had approximately $523.4 million in cash and cash equivalents, and marketable securities which were primarily held in U.S.

We have generated negative cumulative cash flows from operations since inception through the year ended December 31, 2024, and we have generated losses from operations since inception as reflected in our accumulated deficit of $1.5 billion.

We have generated losses from operations since inception as reflected in our accumulated deficit of $1.5 billion.

We currently anticipate making aggregate capital expenditures of between approximately $15 million and $20 million during the next 12 months, which we expect to include, among other expenditures, equipment to be used for manufacturing and research and development.

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We regularly review opportunities that meet our long-term growth objectives.

In August 2025, we entered into an agreement to acquire all outstanding shares of common stock of Scale Bio for an upfront payment consisting of $9.2 million in cash and $13.5 million (1,099,992 shares) in shares of our Class A common stock.

In the future, we may pay up to $30.0 million of contingent consideration if certain milestones are met, which are payable in cash or equity at our election.

In January 2023, we signed an agreement to acquire certain intangible and other assets from Centrillion Technologies, Inc.

and Centrillion Technology Holdings Corp.

for an upfront cash payment of $10.0 million relating to an intellectual property license.

Upon the close of the transaction on July 14, 2023, we paid additional cash consideration of $10.0 million upon acquiring the assets.

Under the agreement, we are obligated to provide additional cash consideration if certain technology development milestones are met.

Under the agreement, we are obligated to pay for certain technology development milestones if they are met.

As of December 31, 2025, we have paid $41.3 million relating to the completion of development milestones.

Up to $15.0 million of cash consideration is due if an additional technology development milestone is met.

Furthermore, we expect to pay cash consideration tied to future sales milestones if such milestones are met.

We expect to continue to incur operating losses for the foreseeable future.

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We intend to continue to evaluate market conditions and may in the future pursue additional sources of funding, such as mortgage or other financing, to further enhance our financial position and to execute our business strategy.

In addition, should prevailing economic, financial, business or other factors adversely affect our ability to meet our operating cash requirements, we could be required to obtain funding though traditional or alternative sources of financing.

In addition, should prevailing economic, financial, business or other factors adversely affect our ability to meet our operating cash requirements, we could be required to obtain funding through traditional or alternative sources of financing.

We cannot be certain that additional funds would be available to us on favorable terms when required, or at all.

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(in thousands)

Net cash provided (used in) by:

Net cash provided by (used in):

Operating activities $ 136,050 $ 6,664

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Financing activities 6,803 10,914

Effect of exchange rates changes on cash, cash equivalents, and restricted cash (164) (33)

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

Effect of exchange rates changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ 129,899 $ (15,217)

Operating activities

The net cash provided by operating activities of $6.7 million for the year ended December 31, 2024 was due primarily to a net loss of $182.6 million, partially offset by stock-based compensation expense of $140.7 million, depreciation and amortization of $35.9 million, net cash inflow from changes in operating assets and liabilities of $1.3 million, lease and asset impairment charges of $3.1 million, amortization of leased right-of-use assets of $7.8 million, and other non-cash expenses of $0.5 million.

For the year ended December 31, 2025, the net cash provided by operating activities of $136.1 million consisted of a net loss of $43.5 million, adjusted by non-cash adjustments of $154.7 million and net cash inflows from changes in operating assets and liabilities of $24.9 million.

The non-cash adjustments of $154.7 million primarily consisted of stock-based compensation expense of $109.1 million, depreciation and amortization of $36.2 million, amortization of leased right-of-use assets of $7.6 million, fair value adjustments on contingent consideration of $1.4 million, ROU assets impairment of $1.3 million due to restructuring, and lease and asset impairment charges of $0.8 million, partially offset by accretion of discounts related to our marketable securities of $1.8 million.

The net cash inflow from changes in operating assets and liabilities of $24.9 million was primarily driven by cash inflows related to a decrease in accounts receivable of $41.3 million mainly due to timing of collections,

a decrease in inventory of $28.0 million, an increase in accrued compensation and other related benefits of $7.6 million, and an increase in other noncurrent liabilities of $1.4 million, partially offset by cash outflows due to an increase in other receivables of $34.9 million primarily related to the Bruker settlement, a decrease in operating lease liabilities of $10.3 million due to lease payments, a decrease in accrued expenses and other current liabilities of $5.2 million, a decrease in accounts payable of $2.1 million due to timing of vendor payments, and an increase in prepaid expenses and other current assets of $2.3 million.

During the year ended December 31, 2025, we received an upfront payment of $26.0 million from Vizgen, and two quarterly settlement payments from Bruker totaling $34.0 million, along with the corresponding interest payments.

Because these amounts were collected in the same period they were recognized, they are reflected in operating cash flows through earnings, with no corresponding change in accounts receivable other than the $34.0 million receivable from Bruker remaining at December 31, 2025.

For the year ended December 31, 2024, the net cash provided by operating activities of $6.7 million consisted of a net loss of $182.6 million, adjusted by non-cash adjustments of $188.0 million, and net cash inflows from changes in operating assets and liabilities of $1.3 million.

The non-cash adjustments of $188.0 million primarily consisted of stock-based compensation expense of $140.7 million, depreciation and amortization of $35.9 million, amortization of leased right-of-use assets of $7.8 million, lease and asset impairment charges of $3.1 million, and other non-cash expenses of $0.5 million.

The net cash inflow from operating assets and liabilities was primarily due to a decrease in accounts receivable of $27.0 million primarily due to reduced revenue, an increase in deferred revenue of $11.2 million, an increase in accrued compensation and other related benefits of $3.7 million, and an increase in other noncurrent liabilities of $0.8 million.

The net cash inflow from operating assets and liabilities was partially offset by a decrease in accrued expenses and other current liabilities of $12.7 million, a decrease of $12.5 million due to payment of operating lease liabilities, an increase in inventory of $9.8 million, a decrease in accounts payable of $3.4 million due to timing of vendor payments, an increase in prepaid expenses and other current assets of $1.9 million, and an increase in other noncurrent assets of $1.1 million.

The net cash used in operating activities of $15.2 million for the year ended December 31, 2023 was due primarily to a net loss of $255.1 million, partially offset by stock-based compensation expense of $167.0 million, depreciation and amortization of $35.5 million, net cash inflow from changes in operating assets and liabilities of $17.3 million, asset impairment charges of $9.8 million, amortization of leased right-of-use assets of $8.1 million, realized losses on sale of marketable securities of $1.7 million and other non-cash expenses of $0.4 million.

The net cash inflow from operating assets and liabilities was primarily due to an increase in accrued expenses and other current liabilities of $28.3 million primarily driven by $20.0 million of accrued purchase consideration, an increase in deferred revenue of $10.9 million, a decrease in inventory of $7.9 million and an increase in other noncurrent liabilities of $1.3 million.

The net cash inflow from operating assets and liabilities was partially offset by an increase in accounts receivable of $10.6 million primarily due to an increase in revenue and timing of collections, a decrease of $8.7 million due to payment of operating lease liabilities, a decrease in accounts payable of $6.0 million due to timing of vendor payments, a decrease in accrued compensation and other related benefits of $2.6 million and an increase in prepaid expenses and other current assets of $2.4 million.

Investing activities

The net cash used in investing activities of $13.4 million in the year ended December 31, 2025 was due to the purchase of marketable securities of $123.4 million, net cash paid for the asset acquisition of $9.3 million, purchases of property and equipment and intangible assets of $5.9 million, partially offset by the proceeds from maturities of marketable securities of $125.2 million.

The net cash used in investing activities of $32.6 million in the year ended December 31, 2024 was due to the purchase of marketable securities of $48.9 million, purchases of property and equipment and intangible assets of $12.4 million and $1.0 million, respectively, partially offset by the proceeds from sales and maturities of marketable securities of $3.9 million and $25.8 million, respectively.

The net cash provided by investing activities of $133.5 million in the year ended December 31, 2023 was due to the proceeds from sales and maturities of marketable securities of $100.2 million and $82.8 million, respectively, partially offset by purchases of property and equipment and intangible assets of $48.6 million and $0.9 million, respectively.

Financing activities

The net cash provided by financing activities of $6.8 million in the year ended December 31, 2025 was primarily from proceeds of $6.8 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases.

The net cash provided by financing activities of $13.7 million in the year ended December 31, 2023 was primarily from proceeds of $19.5 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases partially offset by payments on financing arrangements of $5.8 million.

The net cash provided by financing activities of $10.9 million in the year ended December 31, 2024 was primarily from proceeds of $10.9 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases.

Critical Accounting Policies and Estimates

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Revenue recognition

We generate revenue from sales of products and services, and our products consist of instruments and consumables.

We generate revenue from sales of products, which consist of instruments and consumables, and services.

Revenue from product sales is recognized when control of the product is transferred, which is generally upon shipment to the customer.

Instrument service agreements, which relate to extended warranties, are typically entered into for one-year terms, following the expiration of the standard one-year warranty period.

Instrument service agreements, which relate to extended warranties, are typically entered into for a one-year term, following the expiration of the standard one-year warranty period.

Revenue for extended warranties is recognized ratably over the term of the extended warranty period as a stand ready performance obligation.

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Customers are invoiced generally upon shipment, or upon order for services, and payment is typically due within 30 days.

Cash received from customers in advance of product shipment or providing services is recorded as a liability.

Cash received from customers in advance of product shipment or provision of services is recorded as a liability.

Our contracts with our customers generally do not include rights of return or a significant financing component.

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If the product or service has no history of sales or if the sales volume is not sufficient, we rely upon prices set by management, adjusted for applicable discounts.

We have agreements with third parties that include up-front fees and royalties.

Revenue related to the delivery of intellectual property is recognized when the license is delivered to the third parties.

Royalty revenue is recognized when the underlying sales occur.

If the reporting of the actual sales from our licensees occurs after our reporting date, we estimate the royalty revenue receivable at the reporting date and adjust for any changes in estimates in the following period.

Inventory is recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value.

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We estimate the fair value of stock option awards under an equity incentive plan and stock purchase right under an ESPP on the grant date using the Black-Scholes option-pricing model.

The fair values of stock-based awards, excluding PSAs, are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

The fair values of stock-based awards, excluding PSAs and PSUs, are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards.

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We calculate the expected term using the simplified method, which is the mid-point between the vesting and contractual term.

We determine expected volatility using the historical volatility of the stock price of similar publicly traded peer companies.

The risk-free interest rate is based on the yield available on U.S.

Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award.

During the year ended December 31, 2024, we granted PSUs to certain members of management which are subject to the

achievement of certain performance conditions established by the Company’s Compensation Committee of the Board of Directors as described below:

During the year ended December 31, 2025, we granted PSUs (“2025 PSUs”) to certain members of management which are subject to the achievement of certain performance conditions established by the Company’s Compensation Committee of the Board of Directors as described below:

50% of target 2025 PSUs earned will be based on the Company’s compound annual growth rate (“CAGR”) of the Company’s revenue over a two-year performance period from January 1, 2025 to December 31, 2026.

Holders may earn from 0% to 200% of the target amount of shares and earned 2025 PSUs will then be subject to service-based vesting;

50% of target PSUs earned will be based on the relative Total Shareholder Return (TSR) of the Company’s common stock as compared to the TSR of the members of the Russell 3000 Medical Equipment and Services Sector Index over a three-year performance period from January 1, 2024 to December 31, 2026.

50% of target 2025 PSUs earned will be based on the relative Total Shareholder Return (“TSR”) of the Company’s Class A common stock as compared to the TSR of the members of the Russell 3000 Medical Equipment and Services Sector Index over a three-year performance period from January 1, 2025 to December 31, 2027.

Depending on the results relative to the TSR market condition, the holders may earn from 0% to 200% of the target amount of shares which will vest at the end of the performance period.

The PSUs will be forfeited if the performance conditions are not achieved at the end of the relative performance periods as described above.

The 2025 PSUs will be forfeited if the performance or market conditions are not achieved at the end of the relative performance periods as described above.

The vesting of the 2025 PSUs can also be triggered upon certain change in control events or in the event of death or disability.

The PSUs relating to CAGR components were not deemed probable of vesting as of December 31, 2024, no expenses were recognized for 2024.

During the years ended December 31, 2023 and 2022, we issued market-based PSAs comprising performance restricted stock units (and in one case a performance stock option).

Stock-based compensation expense recognized for the 2025 PSUs relating to TSR components was $1.0 million for the year ended December 31, 2025.

The 2025 PSUs relating to CAGR components were deemed not probable of vesting as of December 31, 2025, which resulted in no stock-based compensation expense recognized for the year ended December 31, 2025.

During the year ended December 31, 2024, we granted PSUs (“2024 PSUs”) to certain members of management which are subject to the achievement of certain performance conditions established by the Company’s Compensation Committee of the Board of Directors as described below:

50% of target 2024 PSUs earned were based on the Company’s CAGR of the Company’s revenue over a two-year performance period from January 1, 2024 to December 31, 2025.

Holders could have earned from 0% to 175% of the target amount of shares and earned 2024 PSUs would have then been subject to service-based vesting;

50% of target 2024 PSUs earned will be based on the relative TSR of the Company’s common stock as compared to the TSR of the members of the Russell 3000 Medical Equipment and Services Sector Index over a three-year performance period from January 1, 2024 to December 31, 2026.

Depending on the results relative to the TSR market condition, the holders may earn from 0% to 200% of the target amount of shares which will vest at the end of the performance period.

The 2024 PSUs were or will be forfeited if the performance or market conditions were or are not achieved at the end of the relative performance periods as described above.

We did not achieve the revenue CAGR performance condition over the two-year performance period;

accordingly, the 2024 PSUs subject to this performance condition were forfeited as of December 31, 2025.

The vesting of the 2024 PSUs subject to the relative TSR condition can also be triggered upon certain change in control events or in the event of death or disability.

Stock-based compensation expense recognized for the TSR component of the 2024 PSUs was $1.3 million for each of the years ended December 31, 2025 and 2024.

The CAGR component of the 2024 PSUs was deemed not probable of vesting as of December 31, 2025 and December 31, 2024, which resulted in no stock-based compensation expense recognized for the years ended December 31, 2025 and 2024.

During the year ended December 31, 2023, we issued market-based PSAs comprising performance restricted stock units (and in one case a performance stock option).

The PSAs consist of three separate tranches and the vesting of each tranche is subject to the Class A common stock closing price being maintained at or above certain predetermined share price goals for each tranche.

We estimated the value of the PSA awards granted using a Monte Carlo simulation model, using assumptions including volatility, risk-free interest rate, cost of equity and dividends.

We will recognize the compensation expense over the derived service period using the accelerated attribution method commencing on the grant date.

The derived service period is the median duration of the successful stock price paths to meet the price goal for each tranche as simulated in the Monte Carlo valuation model.

We recognized the compensation expense over the derived service period using the accelerated attribution method commencing on the grant date.

The derived service period was the median duration of the successful stock price paths to meet the price goal for each tranche as simulated in the Monte Carlo valuation model.

If the related market condition is achieved earlier than its estimated derived service period, the stock-based compensation expense will be accelerated, and a cumulative catch-up expense will be recorded during the period in which the market condition is met.

None of the stock price thresholds for the PSAs had been met, resulting in no shares vesting or becoming exercisable as of December 31, 2024.

None of the stock price thresholds for the PSAs have been met, resulting in no shares vesting or becoming exercisable as of December 31, 2025.

Acquisitions of intellectual property

We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

If the screen test is met, the transaction is accounted for as an asset acquisition.

If the screen test is not met, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

We account for an asset acquisition under Accounting Standards Codification, Business Combinations Topic 805, Subtopic 50, which requires the acquiring entity in an asset acquisition to recognize net assets based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given.

Goodwill is not recognized in an asset acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on relative fair values.

On August 7, 2025, we entered into an agreement to acquire all outstanding shares of common stock of Scale Bio.

The transaction was accounted for as an asset acquisition because substantially all of the fair value of the assets acquired is concentrated in the developed technology.

Upon closing the transaction on August 11, 2025, we made an upfront payment consisting of $9.2 million in cash and $13.5 million (1,099,992 shares) in shares of our Class A common stock.

In the future, we may pay up to $30.0 million of contingent consideration if certain milestones are met.

The contingent consideration was recorded at fair value as of the acquisition date.

As of December 31, 2025, we recognized $24.6 million for the fair value of the contingent consideration.

The contingent consideration will be remeasured each reporting period, with changes in fair value recognized within “other income (expense), net” in our consolidated statement of operations.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis