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What changed in GeneDx Holdings Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GeneDx Holdings Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+384 added−400 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-20)

Top changes in GeneDx Holdings Corp.'s 2025 10-K

384 paragraphs added · 400 removed · 264 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

84 edited+36 added−38 removed130 unchanged
Biggest changeThe utility patent applications include a U.S. patent application related to generating a cancer determination from electronic health records using a cancer determination analysis system, a U.S. patent application related to providing a homologous recombination DNA repair deficiency score for a cancer patient, and a U.S. patent application related to therapeutic treatment for subjects having certain polymorphic markers associated with specific human leukocyte antigen alleles.
Biggest changeThe utility patent applications include an international PCT patent application and a U.S. patent application related to performing phenotypic fit analysis, an international PCT patent application and two U.S. patent applications related to analyzing genetic variations and phenotypes, a U.S. patent application related to modeling inference of mutation impact, two U.S. patent applications related to generating a cancer determination from electronic health records using a cancer determination analysis system, a U.S. patent application related to providing a homologous recombination DNA repair deficiency score for a cancer patient, a U.S. patent application related to therapeutic treatment for subjects having certain polymorphic markers associated with specific human leukocyte antigen alleles, two U.S. patent applications relating to analyzing phenotype-causing genomic variants, two U.S. patent applications relating to prioritizing phenotype-causing genomic variants in combination with biomedical ontologies, two U.S. patent applications relating to prioritizing phenotype-causing genomic variants in combination with clinical information, and an international PCT patent application relating to analyzing long biological sequence data.
HHS announced on December 27, 2024, and published in the Federal Register on January 6, 2025, a Notice of Proposed Rulemaking proposing extensive modifications to the HIPAA security regulations. If finalized, these modifications and could entail significant additional compliance obligations and costs for HIPAA-regulated covered entities and business associates.
HHS announced on December 27, 2024, and published in the Federal Register on January 6, 2025, a Notice of Proposed Rulemaking proposing extensive modifications to the HIPAA security regulations. If finalized, these modifications could entail significant additional compliance obligations and costs for HIPAA-regulated covered entities and business associates.
The GDPR and UK GDPR also grant individuals various rights in relation to their personal data including the rights of access, rectification, objection to certain processing and deletion. The GDPR and UK GDPR provide an individual with an express right to seek legal remedies if the individual believes his or her rights have been violated.
The GDPR and UK GDPR also grant individuals various rights in relation to their personal data including the rights of access, rectification, objection to certain processing and deletion. The GDPR and UK GDPR provide individuals with an express right to seek legal remedies if the individual believes his or her rights have been violated.
The FTC has also published past complaints and consent orders, which it urges companies use as guidance to help avoid an FTC enforcement action, even if a data breach or loss occurs.
The FTC has also published past complaints and consent orders, which it urges companies to use as guidance to help avoid an FTC enforcement action, even if a data breach or loss occurs.
For example, the EU’s General Data Protection Regulation (“GDPR”), including as implemented and amended through the UK Data Protection Act 2018 (“UK GDPR”), applies to any data collection, use and sharing in the context of an establishment in the EU or UK as well as extraterritorially to any entity outside the EU and UK when they process personal information related to an offer of goods or services to, or monitoring the behavior of, individuals who are located in the EU or UK.
For example, the EU’s General Data Protection Regulation (“GDPR”), including as implemented and amended through the UK Data Protection Act 2018 (“UK GDPR”), applies to any data collection, use and sharing in the context of an establishment in the EU or UK as well as extraterritorially to any entity outside the EU and UK when they process personal information related to an offer of goods or services to, or monitoring the behavior of, individuals who are located in the EU or UK, respectively.
At initial sequence, rapid results provide clinicians simple, actionable, easy to understand results for non-geneticists and tailored resources for patients and caregivers. On an ongoing basis, reanalysis unlocks a renewable source of insight, replacing any future germline screening.
At initial sequence, rapid results provide clinicians with simple, actionable, easy to understand results for non-geneticists and tailored resources for patients and caregivers. On an ongoing basis, reanalysis unlocks a renewable source of insight, replacing any future germline screening.
Additionally, we would be subject to periodic FDA inspections, quality control procedures, and other detailed validation procedures. If the FDA finds deficiencies in the validation of our manufacturing and quality control practices, it may impose restrictions on marketing specific products until corrected.
Additionally, we would be subject to periodic FDA inspections, quality control procedures, and other detailed validation procedures. If the FDA finds deficiencies in the validation of our manufacturing and/or our quality control practices, it may impose restrictions on marketing specific products until corrected.
The exome is a portion of the genome that encodes proteins, which are involved in many different types of cellular functions. Changes in a genome or exome can change the way proteins are formed or utilized by the cell, potentially causing disease.
The exome is a portion of the genome that encodes proteins, which are involved in many different types of cellular functions. Changes in DNA can change the way proteins are formed or utilized by the cell, potentially causing disease.
However, at various points in recent years, FDA has indicated that it intends to end enforcement discretion for many tests offered as LDTs, and to require such tests to comply with certain FDA regulatory requirements.
However, at various points in recent years, the FDA has indicated that it intends to end enforcement discretion for many tests offered as LDTs, and to require such tests to comply with certain FDA regulatory requirements.
Competition Our competitors include companies that offer molecular genetic testing and consulting services, including specialty and reference laboratories that offer traditional single- and multi-gene tests and biopharma companies.
Competition Our competitors include companies that offer molecular genetic testing and consulting services, including specialty and reference laboratories that offer traditional single- and multi-gene tests.
Certain data protection laws, such as those in the European Union, (the “EU”) and United Kingdom (the “UK”), are comprehensive in nature and include significant requirements around the processing of personal information, while other jurisdictions may have laws less restrictive or prescriptive than those in the United States.
Certain data protection laws, such as those in the European Union, (the “EU”) and United Kingdom (the “UK”), are comprehensive in nature and include significant requirements around the processing of personal information, while other jurisdictions may have no privacy and data protection laws or privacy and data protection laws less restrictive or prescriptive than those in the United States.
Where applicable, reductions to payment rates resulting from the new methodology were limited to 10% per test per year in each of the years 2018 through 2020. Rates were held at 2020 levels during 2021 through 2024 and will continue to be held at such levels in 2025.
Where applicable, reductions to payment rates resulting from the new methodology were limited to 10% per test per year in each of the years 2018 through 2020. Rates were held at 2020 levels during 2021 through 2025 and will continue to be held at such levels in 2026.
This will enable healthcare partners to incorporate genetics into clinical care by accessing our analysis and interpretation capabilities remotely while sequencing locally to reduce complexity, logistics cost and wait times, and align to local restrictions where applicable. • Plan to launch a new provider and patient experience with the eventual goal of providing lifelong access and portability of genomic information.
This will enable healthcare partners to incorporate genetics into clinical care by accessing our analysis and interpretation capabilities remotely while sequencing locally to reduce complexity, logistics cost and wait times, and align to local restrictions where applicable. 6 Table of Contents • Plan to launch a new provider and patient experience with the eventual goal of providing lifelong access and portability of genomic information.
Much of this decline was driven by reduced sequencing costs shared across the industry; however, we have reduced wet labor and processing costs and in the interpretation layer through accumulating data and experience, and we expect further decline in costs going forward.
Much of this decline was driven by reduced sequencing costs shared across the industry; however, we have reduced wet labor, processing, and interpretation costs through accumulating data and experience, and we expect a further decline in costs going forward.
If patents are issued from the currently pending applications, the earliest patents will begin expiring in the early 2040s, subject to potential extensions of the patent term that will be calculated based on the length of the patent examination process.
If patents are issued from the currently pending applications, the earliest patents will begin expiring in the early 2030s, subject to potential extensions of the patent term that will be calculated based on the length of the patent examination process.
Information Blocking Prohibition On May 1, 2020, the Office of the National Coordinator for Health Information Technology (“ONC”) promulgated final regulations under the authority of the 21st Century Cures Act to impose new conditions to obtain and maintain certification of certified health information technology and prohibit certain covered actors, including developers of certified health information 15 Table of Co ntents technology, health information networks/health information exchanges, and health care providers, from engaging in activities that are likely to interfere with the access, exchange, or use of electronic health information (information blocking).
Information Blocking Prohibition On May 1, 2020, the Office of the National Coordinator for Health Information Technology (“ONC”) promulgated final regulations under the authority of the 21st Century Cures Act to impose new conditions to obtain and maintain certification of certified health information technology and prohibit certain covered actors, including developers of certified health information technology, health information networks/health information exchanges, and health care providers, from engaging in activities that are likely to interfere with the access, exchange, or use of electronic health information (information blocking).
Occupational Safety and Health Administration has established extensive requirements relating specifically to workplace safety for healthcare employers in the United States. For purposes of transportation, some biological materials and laboratory supplies are classified as hazardous materials and are subject to regulation by one or more of the following: the U.S. Department of Transportation, the U.S. Public Health Service, the U.S.
For example, the U.S. Occupational Safety and Health Administration has established extensive requirements relating specifically to workplace safety for healthcare employers in the United States. For purposes of transportation, some biological materials and laboratory supplies are classified as hazardous materials and are subject to regulation by one or more of the following: the U.S. Department of Transportation, the U.S.
The company quickly became a leader in genomics, creating the foundation for how to provide genomic information at scale and pioneering exome and genome sequencing for rare and ultra-rare genetic pediatric disorders. 25 years later, we have amassed one of the world’s largest rare disease datasets and remain a leader in genomics.
The company quickly became a leader in genomics, creating the foundation for how to provide genomic information at scale and pioneering exome and genome sequencing for rare and ultra-rare genetic pediatric disorders. 25 years later, we have amassed one of the world’s largest rare disease datasets, GeneDx Infinity TM , and remain a leader in genomics.
Several EKRA exceptions are relevant to many common financial relationships involving clinical laboratories and may be relied upon if all of the elements of the applicable exception are satisfied. Failure to meet the requirements of an exception, however, does not render an arrangement illegal.
Several EKRA exceptions are relevant to many common financial 12 Table of Contents relationships involving clinical laboratories and may be relied upon if all of the elements of the applicable exception are satisfied. Failure to meet the requirements of an exception, however, does not render an arrangement illegal.
Approximately 2% of our revenues today are derived from referral sources outside of the United States. We expect over time to increase rest of world revenue as knowledge and understanding of the benefits of exome and whole genome sequencing continue to expand.
Approximately 1.5% of our revenues today are derived from referral sources outside of the United States. We expect over time to increase rest of world revenue as knowledge and understanding of the benefits of exome and whole genome sequencing continue to expand.
Postal Service, the Office of Foreign Assets Control and the International Air Transport Association. We generally use third-party vendors to dispose of regulated medical waste, hazardous waste and radioactive materials and contractually require them to comply with applicable laws and regulations. These vendors are licensed or otherwise qualified to handle and dispose of such wastes.
Public Health Service, the U.S. Postal Service, the Office of Foreign Assets Control and the International Air Transport Association. We generally use third-party vendors to dispose of regulated medical waste, hazardous waste and radioactive materials and contractually require them to comply with applicable laws and regulations. These vendors are licensed or otherwise qualified to handle and dispose of such wastes.
We believe that there are only a few other manufacturers that are currently capable of supplying and servicing the equipment necessary for our operations, including sequencers and various associated reagents and enzymes. The use of equipment or materials provided by these replacement suppliers would require us to alter our operations.
We believe that there are only a few other manufacturers outside of those listed above that are currently capable of supplying and servicing the equipment necessary for our operations, including sequencers and various associated reagents and enzymes. The use of equipment or materials provided by these replacement suppliers would require us to alter our operations.
Accordingly, we may not be able to meaningfully protect our trade secrets. 8 Table of Co ntents Trademarks We own or are applying for various trademarks, service marks, trade names, and product service names in the U.S and other commercially important markets. We intend to invest significant resources in the growth and protection of our reputation and trademarks.
Accordingly, we may not be able to meaningfully protect our trade secrets. Trademarks We own or are applying for various trademarks, service marks, trade names, and product service names in the U.S and other commercially important markets. We intend to invest significant resources in the growth and protection of our reputation and trademarks.
If such a financial relationship exists, referrals are prohibited unless a statutory or regulatory exception applies. The Stark Law also prohibits us from billing for any such prohibited referral. These prohibitions apply regardless of any intent by the parties to induce or reward referrals or the 11 Table of Co ntents reasons for the financial relationship and the referral.
If such a financial relationship exists, referrals are prohibited unless a statutory or regulatory exception applies. The Stark Law also prohibits us from billing for any such prohibited referral. These prohibitions apply regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral.
To avoid Section 5 violations, the FTC encourages companies to build privacy protections and safeguards into relevant portions of their business, and to consider privacy and data protection as the company grows and evolves.
To avoid Section 5 violations, the FTC encourages companies to build privacy protections 16 Table of Contents and safeguards into relevant portions of their business, and to consider privacy and data protection as the company grows and evolves.
Our operations could be interrupted if we 7 Table of Co ntents encounter delays or difficulties in securing reagents, sequencers or other equipment or materials, and if we cannot obtain an acceptable substitute. Any such interruption could significantly affect our business, financial condition, results of operations and reputation.
Our operations could be interrupted if we encounter delays or difficulties in securing reagents, sequencers or other equipment or materials, and if we cannot obtain an acceptable substitute. Any such interruption could significantly affect our business, financial condition, results of operations and reputation.
CLIA requires such laboratories to be certified by the federal government and mandates compliance with various operational, personnel, facilities administration, inspections, quality control, quality assessment and proficiency testing requirements intended to ensure that testing services are accurate, reliable and timely.
CLIA requires such laboratories to be certified by the federal government and mandates compliance with various operational, personnel, facilities administration, 9 Table of Contents inspections, quality control, quality assessment and proficiency testing requirements intended to ensure that testing services are accurate, reliable and timely.
None of our tests meet the current definition of advanced diagnostic laboratory tests, and therefore we believe we are required to report private payor rates 16 Table of Co ntents for our tests on an every-three-years basis, starting next in 2026.
None of our tests meet the current definition of advanced diagnostic laboratory tests, and therefore we believe we are required to report private payor rates for our tests on an every-three-years basis, starting next in 2026.
Additionally, certain of our diagnostic products in development may be subject to regulation by the FDA and similar international health authorities. For these products, we would have an obligation to adhere to the FDA’s current Good Manufacturing Practices and diagnostic product regulations, including providing for an establishment and product listing with the FDA.
Additionally, certain of our diagnostic products in development may be subject to regulation by the FDA and similar international health authorities. For these products, we would have an obligation to comply with applicable premarket review requirements, and adhere to the FDA’s current Good Manufacturing Practices and diagnostic product regulations, including providing for an establishment and product listing with the FDA.
These laws are typically triggered by a company’s establishment or physical location in the jurisdiction, data processing activities that take place in the jurisdiction, and/or the processing of personal information about individuals located in that jurisdiction that are targeted, for example, by an offer of goods or services.
These laws are typically triggered by a company’s establishment or physical location in the jurisdiction, data processing activities that take place in the jurisdiction, and/or the processing of personal information about individuals located in that jurisdiction that are targeted, for example, by an offer of 15 Table of Contents goods or services or by monitoring their activities.
Substantially all of our revenue for the year ended December 31, 2024 has been primarily derived from diagnostic test reports and we expect this trend to continue in the near-term. We expect over time to achieve a mix of revenue from diagnostic tests, data and information solutions, newborn screening products and information and interpretation services.
Substantially all of our revenue for the year ended December 31, 2025 was derived from diagnostic test reports and we expect this trend to continue in the near-term. Over time we expect to achieve a mix of revenue from diagnostic tests, data and information solutions, newborn screening products and information and interpretation services.
Available Information We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports, as well as our other SEC filings, available on our website, free of charge, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address is www.genedx.com.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports, as well as our other SEC filings, are available free of charge on our website, www.genedx.com, as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
We will sequence once, and analyze for life. 6 Table of Co ntents • Plan to optimize our services to become a solutions provider of choice for biopharma companies.
We will sequence once, and analyze for life. • Plan to optimize our services to become a solutions provider of choice for biopharma companies.
Eight more states will have comprehensive consumer data privacy laws that come into effect in 2025, and many other states have introduced or enacted similar consumer privacy laws.
Three more states will have comprehensive consumer data privacy laws that come into effect in 2026, and many other states have introduced or enacted similar consumer privacy laws.
Our strategy focuses on the following objectives: • Expand the utilization of exome and genome sequencing as the first- or second-tier test over most other genetically targeted tests by leveraging decades of earned trust amongst expert geneticists; and • Expand the utilization of industry-leading exome and genome sequencing beyond the genetic experts into the non-expert setting, potentially creating a new standard of care which enables faster diagnoses, reduces suffering, and helps healthcare systems save money.
Our strategy focuses on the following objectives: • Expand the utilization of exome and genome sequencing as the first-tier test over most other genetically targeted tests by leveraging product enhancements and decades of earned trust amongst expert geneticists; and • Expand the utilization of industry-leading exome and genome sequencing beyond geneticists, creating a new standard of care which enables faster diagnoses, reduces suffering, and helps healthcare systems save money.
Failure to comply with the requirements of the GDPR or the related national data protection laws of the member states of the EU, which may deviate from or be more restrictive than the GDPR, or a failure to comply with the UK GDPR may result in significant administrative fines issued by EU or UK regulators.
Failure to comply with the requirements of the GDPR or the related national data protection laws of the member states of the EU, which may deviate from or be more restrictive than the GDPR, or a failure to comply with the UK GDPR may also result in significant administrative fines and restrictions on our business operations issued by EU or UK regulators.
Such programs will focus on: ◦ support for rapid whole genome sequencing in the NICU and Pediatric Developmental Disorder settings; ◦ diagnosis of disease and prevention of chronic conditions in adults; and ◦ use of rapid whole genome sequencing for broad newborn screening. • Plan to open new markets and geographies and unlock the value of our dataset with independently scalable cloud-based interpretation and information service offerings.
Such programs will focus on: ◦ health economic data supporting rapid whole genome sequencing in the NICU; ◦ diagnosis of disease and prevention of chronic conditions in adults; and ◦ use of whole genome sequencing for broad newborn screening. • Plan to open new markets and geographies and unlock the value of our dataset with independently scalable cloud-based interpretation and information service offerings.
To achieve these objectives, we: • Deploy our team of approximately 70 field-based sales representatives and medical science liaisons, and plan to construct an industry-leading brand, product, marketing, communications and market access platform by leveraging decades of earned trust across the genetics community. • Partner with leaders across health systems, manufacturers, commercial and governmental payors and advocacy groups.
To achieve these objectives, we: • Deploy our team of approximately 120 field-based sales representatives and medical science liaisons, and construct an industry-leading brand, product, marketing, communications and market access platform that leverages our expertise, rich data, and decades of earned trust across the genetics community. • Partner with leaders across health systems, manufacturers, commercial and governmental payors and advocacy groups.
For example, California’s Medical Board has indicated that determining what diagnostic tests are appropriate for a particular condition and taking responsibility for the ultimate overall care of the patient, including providing treatment options available to the patient, would constitute the unlicensed practice of medicine if performed by an unlicensed person.
For example, California law establishes that determining what diagnostic tests are appropriate for a particular condition and taking responsibility for the ultimate overall care of the patient, including providing treatment options available to the patient, would constitute the unlicensed practice of medicine if performed by an unlicensed person.
As most recently proposed, the VALID Act would modify the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and establish a risk-based approach to imposing requirements related to premarket review, quality systems, and labeling requirements on all IVCTs, including LDTs, but a grandfathering provision would create exemptions from certain requirements for certain LDTs (e.g., LDTs first offered for clinical use not later than May 10 Table of Co ntents 6, 2024).
As most recently proposed, the VALID Act would modify the FDCA and establish a risk-based approach to imposing requirements related to premarket review, quality systems, and labeling requirements on all IVCTs, including LDTs, but a grandfathering provision would create exemptions from certain requirements for certain LDTs (e.g., LDTs first offered for clinical use not later than May 6, 2024).
(via Prevention), Rady Children’s Hospital and Tempus (via Ambry Genetics) as well as other commercial and academic labs. Customers and Seasonality We receive payment for our products and services from third-party payors, patients, business-to-business clients, and from other healthcare partners.
Principal competitors include companies such as Baylor Genetics, Tempus (via Ambry Genetics), Variantyx, and Rady Children’s Hospital as well as other commercial and academic labs. Customers and Seasonality We receive payment for our products and services from third-party payors, patients, business-to-business clients, and from other healthcare partners.
Importantly, we believe that we return fewer uncertain findings compared to public datasets, which makes our analysis easier to interpret outside of the medical genetics community. At the same time, we have improved quality and speed to delivery of exome and genome tests and have significantly lowered the associated sequencing costs since initial launch in 2013.
Importantly, we believe that we return fewer uncertain findings compared to public datasets and competitors, which makes our analysis easier to interpret outside of the medical genetics community. At the same time, we have improved quality and speed to delivery of exome and genome tests while significantly lowering sequencing costs since inception.
By unlocking the value of the products, our knowledge base, network of relationships, and expertise, our team is well positioned to lead what we believe is a nearly a $25 billion global market opportunity in pediatric and rare disease and a nearly $20 billion global market opportunity for adult disease and disorders.
By unlocking the value of our diagnostics products, GeneDx Infinity TM , our network of relationships, and internal expertise, GeneDx is well positioned to lead in what we believe is a nearly $25 billion market opportunity in pediatric and rare disease and a nearly $20 billion market opportunity for adult disease and disorders.
Our patent protection strategy has focused on seeking protection for certain of our non-gene specific technology and our specific biomarkers. In this regard, we have three pending U.S. non-provisional utility patent applications and seven U.S. provisional patent applications.
Our patent protection strategy has focused on seeking protection for certain of our non-gene specific technology and our specific biomarkers. In this regard, we have one issued U.S. design patent, fourteen pending U.S. non-provisional utility patent applications, four pending U.S. provisional patent applications, and three pending international PCT patent applications.
We have used, and intend to continue to use, our website, investor relations website (accessible via our website), and social media accounts, including our X, formerly Twitter, feed @GeneDx, our LinkedIn page and our Facebook page, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 17 Table of Co ntents
We have used, and intend to continue to use, our website, investor relations website (accessible via our website), and social media accounts, including our LinkedIn page, our Instagram page, and our Facebook page, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 18 Table of Contents
In addition to the companies that currently offer traditional genetic testing services and research centers, other established and emerging healthcare, information technology and service companies may commercialize competitive products including informatics, analysis, integrated genetic tools and services for health and wellness. Principal competitors include companies such as Baylor Genetics, Exact Sciences Corp.
In addition to the companies that currently offer traditional genetic testing services and research centers, other established and emerging healthcare, information technology and service companies may commercialize competitive products including informatics, analysis, integrated genetic tools and services for health and wellness.
Privacy and Security Laws Health Insurance Portability and Accountability Act Under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), HHS has issued regulations to protect the privacy and provide for the security of protected health information (“PHI”) used or disclosed by covered entities, including most health care providers and their respective business associates, as well as the business associates’ subcontractors.
Parts 11, 50, 54, 56, 58 and 812 and all equivalent legal requirements in other jurisdictions. 13 Table of Contents Privacy and Security Laws Health Insurance Portability and Accountability Act Under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), HHS has issued regulations to protect the privacy and provide for the security of protected health information (“PHI”) used or disclosed by covered entities, including most health care providers and their respective business associates, as well as the business associates’ subcontractors.
Our valuable trade secrets relate to proprietary bioinformatic tools such as: • custom data processing methods and analytical pipelines for NGS, aCGH, MLPA, Sanger, and other genomic data, optimized and validated to the highest performance standards; • a novel detection method to uncover notoriously difficult to detect sequence variants called mobile element insertions and partial-exon deletions; and • custom variant analysis platforms built from the ground up for exome and genome-scale data interpretation.
In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary information by third parties. 8 Table of Contents Our valuable trade secrets relate to proprietary bioinformatic tools such as: • custom data processing methods and analytical pipelines for NGS, aCGH, MLPA, Sanger, and other genomic data, optimized and validated to the highest performance standards; • a novel detection method to uncover notoriously difficult to detect sequence variants called mobile element insertions and partial-exon deletions; and • custom variant analysis platforms built from the ground up for exome and genome-scale data interpretation.
Enforcement of these laws varies from jurisdiction to jurisdiction, with a variety of consequences, including civil or criminal penalties, litigation private rights of action, or damage to our reputation.
Enforcement of these laws varies from jurisdiction to jurisdiction, with a variety of consequences, including civil or criminal penalties or the loss of a license to operate in the jurisdiction, individual litigation rights, or damage to our reputation.
In addition to the CCPA, by the end of 2024, there were eight other states that had consumer privacy laws come into effect, including Colorado, Connecticut, Florida, Montana, Oregon, Texas, Utah, and Virginia.
In addition to the CCPA, by the end of 2025, there were sixteen other states that had consumer privacy laws come into effect, including Colorado, Connecticut, Delaware, Florida, Iowa, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Tennessee, Texas, Utah, and Virginia.
Several states have enacted comparable false claims laws which may be broader in scope and apply regardless of payor. 12 Table of Co ntents The Social Security Act includes civil monetary penalty provisions that impose penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
The Social Security Act includes civil monetary penalty provisions that impose penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
Such solutions will focus on value-added services such as: ◦ Finding rare disease patients for clinical trial recruitment and/or delivery of targeted therapeutics. ◦ Supporting research and development for targeted therapies with analytic reports leveraging clinicogenomics data across multiple therapeutic areas with an initial emphasis in rare disease. ◦ Providing a therapeutic area agnostic platform to access to data, patients and insights for real world evidence and data to support end-to-end drug discovery pipeline.
Such solutions will focus on value-added services such as: ◦ Finding rare disease patients for clinical trial recruitment and/or delivery of targeted therapeutics. ◦ Supporting research and development for targeted therapies with analytic reports leveraging clinicogenomics data across multiple therapeutic areas with an initial emphasis in rare disease. ◦ Providing a therapeutic area agnostic platform to access data, patients and insights for real world evidence and data to support end-to-end drug discovery pipeline. • Plan to leverage our position at the nexus of rare disease to create a network effect - uniting patients, researchers, biopharma, payers, policymakers, and health systems - and create solutions for some of the greatest challenges in the rare disease space and increase access to precision genetic medicine.
The privacy regulations also set forth certain rights that an individual has with respect to his or her PHI maintained by a covered entity or business associate, including the right to access or amend certain records containing his, her or their PHI, request restrictions on the use or disclosure of his, her or their PHI, or request an accounting of disclosures of his or her PHI. 13 Table of Co ntents Covered entities and business associates also must comply with the security regulations, which establish requirements for safeguarding the confidentiality, integrity, and availability of PHI that is electronically transmitted or electronically stored.
The privacy regulations also set forth certain rights that an individual has with respect to his or her PHI maintained by a covered entity or business associate, including the right to access or amend certain records containing his, her or their PHI, request restrictions on the use or disclosure of his, her or their PHI, or request an accounting of disclosures of his or her PHI.
If the government intervenes and is ultimately successful in obtaining redress in the matter or if the plaintiff succeeds in obtaining redress without the government’s involvement, then the plaintiff will receive a percentage of the recovery.
If the government intervenes and is ultimately successful in obtaining redress in the matter or if the plaintiff succeeds in obtaining redress without the government’s involvement, then the plaintiff will receive a percentage of the recovery. Several states have enacted comparable false claims laws which may be broader in scope and apply regardless of payor.
We provide programs including healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, flexible work schedules, fertility, adoption and surrogacy assistance, employee assistance and wellness support, among many others.
We provide programs including healthcare and insurance benefits, wellness, health savings and flexible spending accounts, paid time off, family and parental leave, flexible work schedules, fertility, adoption and surrogacy assistance, and employee assistance programs. We operate in an industry in which competition for highly qualified personnel is significant.
Reimbursement and billing for diagnostic services is highly complex, and errors in billing potentially can result in denied claims and/or in substantial obligations to repay overpayments to payors.
These codes may apply to one or more of our tests if we apply for PLA coding. 17 Table of Contents Reimbursement and billing for diagnostic services is highly complex, and errors in billing potentially can result in denied claims and/or in substantial obligations to repay overpayments to payors.
If the FDA ultimately regulates certain LDTs as medical devices, whether via final guidance, final regulation, or as instructed by Congress, our tests may be subject to certain additional regulatory requirements. Complying with the FDA’s requirements for medical devices can be expensive, time-consuming, and subject us to significant or unanticipated delays.
The likelihood that Congress will pass such legislation is difficult to predict at this time. If the FDA ultimately regulates certain LDTs, our tests may be subject to certain additional regulatory requirements. Complying with the FDA’s requirements can be expensive, time-consuming, and subject us to significant or unanticipated delays.
California and Other State Consumer Privacy Laws The California Consumer Privacy Act, as amended by the California Privacy Rights Act (together with the California Consumer Privacy Act, the “CCPA”), confers to California consumers, among other things, the right to receive notice of the categories of personal information that will be collected by a business, how the business will use and share the personal information, and the categories of third parties who will receive the personal information.
Failure to maintain compliance, including in connection with changes in state or federal laws regarding privacy or security, could result in civil and/or criminal penalties as well as significant reputational damage and could also have a material adverse effect on our business. 14 Table of Contents California and Other State Consumer Privacy Laws The California Consumer Privacy Act, as amended by the California Privacy Rights Act (together with the California Consumer Privacy Act, the “CCPA”), confers to California consumers, among other things, the right to receive notice of the categories of personal information that will be collected by a business, how the business will use and share the personal information, and the categories of third parties who will receive the personal information.
Other Regulatory Requirements We are subject to laws and regulations related to the protection of the environment, the health and safety of employees and the handling, transportation and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood and bone marrow samples and other human tissue, and radioactive materials. For example, the U.S.
Violation of these corporate practice of medicine prohibitions may result in civil or criminal fines, as well as sanctions imposed against us and/or the professional through licensure proceedings. 11 Table of Contents Other Regulatory Requirements We are subject to laws and regulations related to the protection of the environment, the health and safety of employees and the handling, transportation and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood and bone marrow samples and other human tissue, and radioactive materials.
A covered entity must also notify the Secretary of HHS and, under certain circumstances, the media of a breach of unsecured PHI.
In particular, a covered entity must notify any individual whose unsecured PHI is breached according to the specifications set forth in the breach notification rule. A covered entity must also notify the Secretary of HHS and, under certain circumstances, the media of a breach of unsecured PHI.
Over time we fully expect more and more use cases and reimbursement pathways for exome and genome to open up across a wide spectrum of pediatric and adult diseases, conditions and disorders.
Longer-term, we remain optimistic about our leading position in genomic newborn screening (“gNBS”) and see the adult market as a future opportunity. Over time we expect more and more use cases and reimbursement pathways for exome and genome products to open up across a wide spectrum of pediatric and adult diseases, conditions and disorders.
State laws 9 Table of Co ntents may require that nonresident laboratories, or out-of-state laboratories, maintain a laboratory license to perform tests on samples from patients who reside in that state.
State laws may require that nonresident laboratories, or out-of-state laboratories, maintain a laboratory license to perform tests on samples from patients who reside in that state. As a condition of state licensure, these state laws may require that laboratory personnel meet certain qualifications, specify certain quality control procedures or facility requirements, or prescribe record maintenance requirements.
Most recently, on April 29, 2024, the FDA published a final rule on LDTs, in which FDA outlines its plans to end enforcement discretion for many LDTs in five stages over a four-year period.
On April 29, 2024, the FDA published a final rule on LDTs, in which the FDA outlined its plans to end enforcement discretion for many LDTs in five stages over a four-year period. In response, multiple lawsuits were filed challenging the FDA’s authority to regulate LDTs as medical devices under the Federal Food, Drug, and Cosmetic Act (FDCA).
Exome and genome sequencing can find different genetic alterations, or variants, that more targeted tests miss and are especially useful when the timing is critical to directing or altering medical management. With 25 years of operation, GeneDx has a proven track record of expertise in genetic testing.
When patients present with complex issues, a genetic diagnosis may be available, but a traditional genetic panel test may be too narrow to identify the cause. Exome and genome sequencing can find different genetic alterations, or variants, that more targeted tests miss and are especially useful when the timing is critical to directing or altering medical management.
However, we are required to comply with the CCPA insofar as we collect other categories of California consumers’ personal information, such as information about California-based employees, contractors, business contacts and website visitors. 14 Table of Co ntents The CCPA is enforceable through administrative fines of up to $2,500 for each violation, or $7,500 for intentional violations or where the violator has actual knowledge that the personal information relates to an individual under 16 years of age.
The CCPA is enforceable through administrative fines of up to $2,663 for each violation, or $7,988 for intentional violations or where the violator has actual knowledge that the personal information relates to an individual under 16 years of age.
These same contractors may also be designated to process claims if CMS determines that such a model is appropriate. It is unclear whether CMS will proceed with contractor consolidation under this authorization. PAMA also authorized the adoption of new, temporary billing codes and/or unique test identifiers for FDA-cleared or approved tests as well as advanced diagnostic laboratory tests.
PAMA also authorizes CMS to consolidate coverage policies for clinical laboratory tests among one to four laboratory-specific Medicare Administrative Contractors. These same contractors may also be designated to process claims if CMS determines that such a model is appropriate. It is unclear whether CMS will proceed with contractor consolidation under this authorization.
The VALID Act, as most recently proposed, would create a new category of medical products separate from medical devices called “in vitro clinical tests,” or IVCTs.
For example, versions of the Verifying Accurate Leading-edge IVCT Development Act (the “VALID Act”) have been introduced in Congress several times in recent years, but the VALID Act has not been enacted. The VALID Act, as most recently proposed, would create a new category of medical products separate from medical devices called “in vitro clinical tests,” or IVCTs.
Our employees' total compensation package includes competitive salary, bonuses or sales incentives, equity through our equity incentive plans, 401(K) plan with matching opportunities, and the opportunity to participate in our employee stock purchase plan. Equity participation is provided for certain positions because ownership in the company drives commitment to our long-term success.
We also provide the opportunity to participate in our employee stock purchase plan and a 401(k) plan with employee matching opportunities. We offer equity for certain positions because we believe ownership in the company strengthens alignment and commitment to our long-term success.
We operate with conviction that what is best for patients must be embedded in every aspect of our work. In support of these beliefs, we value equitability, simplicity and transparency. Overview GeneDx was founded in 2000 by scientists from the National Institutes of Health whose mission was making genetic testing accessible for patients with rare diseases.
Overview GeneDx was founded in 2000 by scientists from the National Institutes of Health whose mission was to make genetic testing accessible for patients with rare diseases.
Corporate Practice of Medicine Numerous states prohibit business organizations from practicing medicine or employing or engaging physicians to practice medicine, which prohibitions are generally referred to as the prohibition against the corporate practice of medicine. These laws are intended to prevent interference in the medical decision-making process by anyone who is not a licensed physician.
These laws are intended to prevent interference in the medical decision-making process by anyone who is not a licensed physician.
The American Medical Association has created a section of billing codes, Proprietary Laboratory Analyses (“PLA”), to facilitate implementation of this section of PAMA. These codes may apply to one or more of our tests if we apply for PLA coding.
PAMA also authorized the adoption of new, temporary billing codes and/or unique test identifiers for FDA-cleared or approved tests as well as advanced diagnostic laboratory tests. The American Medical Association has created a section of billing codes, Proprietary Laboratory Analyses (“PLA”), to facilitate implementation of this section of PAMA.
Implemented with expert oversight, our advanced interpretation methods incorporate automation, bioinformatics, and cloud-based machine learning, enabling efficient discovery of genetic differences at previously undetectable levels. As the number of new patients we test grows, so does our database, and the new data increases the potential for greater insights.
As the number of new patients we test grows, so does our database, and the new data increases the potential for greater insights.
Raw Materials and Suppliers We rely on a limited number of suppliers, including Illumina, Inc., Integrated DNA Technologies Incorporated, Agilent Technologies, Roche Holdings Ltd., QIAGEN, Inc. and Twist Biosciences, for certain laboratory reagents, as well as sequencers and other equipment and materials, which we use in our laboratory operations.
For information regarding our customer concentration in relation to certain of the Company’s third-party payors, see Note 2, “ Summary of Significant Accounting Policies ” in the notes to our consolidated financial statements. 7 Table of Contents Raw Materials and Suppliers We rely on a limited number of suppliers, including Illumina, Inc., Life Technologies Corporation, Twist Biosciences Corporation, Path-Tec LLC and Agilent Technologies. for certain laboratory reagents, as well as sequencers and other equipment and materials, which we use in our laboratory operations.
(“CMLS”) on July 22, 2021 (the “Business Combination”); and • “we,” “us” and “our,” the “Company” and “GeneDx” refer, as the context requires, to GeneDx Holdings and its consolidated subsidiaries. The Company’s Class A common stock and public warrants are listed on the Nasdaq Global Select Market under the symbols “WGS” and “WGSWW,” respectively.
(“CMLS”) on July 22, 2021 (the “Business Combination”); • “Fabric Genomics” refer to Fabric Genomics, Inc., a Delaware corporation, which we acquired on May 5, 2025 (the “Merger”); and • “we,” “us” and “our,” the “Company” and “GeneDx” refer, as the context requires, to GeneDx Holdings and its consolidated subsidiaries.
As we capture more genomic and phenotypic data, we hope to fuel a positive feedback cycle of discovery that continuously delivers more value for patients, providers and healthcare partners.
As we capture more genomic and phenotypic data, we hope to fuel a positive feedback cycle of discovery that continuously delivers more value for patients, providers and healthcare partners. 5 Table of Contents Market Opportunity Our primary growth engine in the short term will be expanding adoption of our market-leading exome and genome testing in the pediatric outpatient setting among geneticists, pediatric neurologists, other pediatric specialists, and general pediatricians.
Then, where applicable based upon median private payor rates reported in 2017 or 2026, reduced by up to 15% per test per year in each of 2026 through 2028 (with a second round of private payor rate reporting in 2026 to establish rates for 2027 through 2029).
Then, where applicable based upon median private payor rates reduced by up to 15% per test per year for each of 2027 through 2029. PAMA codified Medicare coverage rules for laboratory tests by requiring any local coverage determination to be made following the local coverage determination process.
As a condition of state licensure, these state laws may require that laboratory personnel meet certain qualifications, specify certain quality control procedures or facility requirements, or prescribe record maintenance requirements. We maintain state laboratory licenses for our Gaithersburg facility in Maryland and in New York, California, Pennsylvania and Rhode Island.
We maintain state laboratory licenses for our Gaithersburg facility in Maryland and in New York, California, Pennsylvania and Rhode Island.
Our trademark portfolio is designed to protect the brands for our products and services, both current and in the pipeline. Human Capital Resources We aim to recruit, develop, and retain diverse, high-quality talent and are committed to creating a workplace that supports the success of its people by investing in their personal development and career growth.
Our trademark portfolio is designed to protect the brands for our products and services, both current and in the pipeline. Human Capital Management We believe that human capital management, including attracting, retaining, and developing a high-quality workforce, is critical to our long-term success.
In addition, HITECH, among other things, established certain PHI breach notification requirements with which covered entities and business associates must comply. In particular, a covered entity must notify any individual whose unsecured PHI is breached according to the specifications set forth in the breach notification rule.
Covered entities and business associates also must comply with the security regulations, which establish requirements for safeguarding the confidentiality, integrity, and availability of PHI that is electronically transmitted or electronically stored. In addition, HITECH, among other things, established certain PHI breach notification requirements with which covered entities and business associates must comply.
Our team of nearly 1,000 individuals are champions of not only our organization, but our patients, providers and partners. We are committed to developing our workforce. Our talent development programs provide employees with the resources they need to achieve their career goals, build management skills and lead their teams.
We are committed to creating a workplace that supports the success of its people by investing in their personal development and career growth. Our team of nearly 1,300 individuals are champions of not only our organization, but our patients, providers and partners.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we identify material weaknesses in the internal control over financial reporting of the company or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we no longer qualify as an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.
Biggest changeAny failure to remediate the material weakness, or the identification of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements that may continue undetected, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could be negatively affected.
Our current and potential domestic and international competitors range from large and established companies to emerging start-ups in addition to academic and scientific institutions, and public and private research organizations. Some competitors have longer operating histories than our Company in various sectors.
Our current and potential domestic and international competitors range from large established companies to emerging start-ups in addition to academic and scientific institutions, and public and private research organizations. Some competitors have longer operating histories than our Company in various sectors.
If our relationships are not successful, our ability to develop and improve of products, services and technologies, and to successfully execute our commercial strategy regarding such products, services and technologies, could be compromised. Our operating results could be subject to significant fluctuation, which could increase the volatility of our stock and warrant prices and cause losses to our stockholders.
If our relationships are not successful, our ability to develop and improve our products, services and technologies, and to successfully execute our commercial strategy regarding such products, services and technologies, could be compromised. Our operating results could be subject to significant fluctuation, which could increase the volatility of our stock and warrant prices and cause losses to our stockholders.
In addition, while the Anti-Kickback Statute, includes certain exceptions that are widely relied upon in the healthcare industry, including safe harbors applicable to certain employees and personal service contracts, and not all of those same exceptions apply under EKRA.
In addition, while the Anti-Kickback Statute includes certain exceptions that are widely relied upon in the healthcare industry, including safe harbors applicable to certain employees and personal service contracts, not all of those same exceptions apply under EKRA.
Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented these provisions in our Charter and our Bylaws.
Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to these provisions in our Charter and our Bylaws.
Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including: • multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anticorruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; • failure by us, our collaborators or our distributors to obtain regulatory clearance, authorization or approval for the use of our products and services in various countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property; • difficulties in staffing and managing foreign operations, including repatriating foreign earned profits; • complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; • difficulties in negotiating favorable reimbursement negotiations with governmental authorities; • logistics and regulations associated with shipping samples, including infrastructure conditions and transportation delays; • limits in our ability to penetrate international markets if we are not able to conduct our clinical diagnostic services locally; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; • international regulations and license requirements that may restrict foreign investment in and operation of the internet, IT infrastructure, data centers and other sectors, and international transfers of data; • natural disasters, political and economic instability, including wars, terrorism and political unrest, and outbreak of disease; • boycotts, curtailment of trade and other business restrictions; and • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the Foreign Corrupt Practices Act of 1977 (the “FCPA”), its books and records provisions, or its anti-bribery provisions, Canada’s Corruption of Foreign Public Officials Act, or laws similar to the FCPA in other jurisdictions in which we may in the future operate, such as the United Kingdom’s Bribery Act of 2010 and anti-bribery requirements of member states in the European Union (the “EU”).
Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including: • multiple, conflicting and changing laws and regulations such as AI, privacy, security and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anticorruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; • failure by us, our collaborators or our distributors to obtain regulatory clearance, authorization or approval for the use of our products and services in various countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property; • difficulties in staffing and managing foreign operations, including repatriating foreign-earned profits; • complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; • difficulties in negotiating favorable reimbursement negotiations with governmental authorities; • logistics and regulations associated with shipping samples, including infrastructure conditions and transportation delays; • limits in our ability to penetrate international markets if we are not able to conduct our clinical diagnostic services locally; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; • international regulations and license requirements that may restrict foreign investment in and operation of the internet, IT infrastructure, data centers and other sectors, and international transfers of data; • natural disasters, political and economic instability, including wars, terrorism and political unrest, and outbreak of disease; • boycotts, curtailment of trade and other business restrictions; and • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the Foreign Corrupt Practices Act of 1977 (the “FCPA”), its books and records provisions, or its anti-bribery provisions, Canada’s Corruption of Foreign Public Officials Act, or laws similar to the FCPA in other jurisdictions in which we may in the future operate, such as the United Kingdom’s Bribery Act of 2010 and anti-bribery requirements of member states in the European Union (the “EU”).
Parts 11, 50, 54, 56, 58 and 812, and all equivalent legal requirements in other jurisdictions; • the federal Anti-Kickback Statute, which prohibits knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for the referral of an individual, for the furnishing of or arrangement for the furnishing of any item or service for which payment may be made in whole or in part by a federal healthcare program, or the purchasing, leasing, ordering, arranging for, or recommend purchasing, leasing or ordering, any good, item or service for which payment may be made, in whole or in part, under a federal healthcare program; • EKRA, which prohibits payments for referrals to recovery homes, clinical treatment facilities, and laboratories and reaches beyond federal health care programs, to include private insurance; • the federal physician self-referral law, known as the Stark Law, which prohibits a physician from making a referral to an entity for certain designated health services covered by the Medicare program, including laboratory and pathology services, if the physician or an immediate family member has a financial relationship with the entity unless an exception applies, and prohibits an entity from billing for designated health services furnished pursuant to a prohibited referral; • the federal False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government; • the federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; • the HIPAA fraud and abuse provisions, which create new federal criminal statutes that prohibit, among other things, defrauding health care benefit programs, willfully obstructing a criminal investigation of a healthcare offense and falsifying or concealing a material fact or making any materially false statements in connection with the payment for healthcare benefits, items or services; • other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral, fee-splitting restrictions, insurance fraud laws, anti-markup laws, prohibitions on the provision of tests at no or discounted cost to induce physician or patient adoption, and false claims acts, which may extend to services reimbursable by any third-party payor, including private insurers; • the 21st Century Cures Act information blocking prohibition, which prohibits covered actors from engaging in certain practices that are likely to interfere with the access, exchange, or use of electronic health information; 37 Table of Co ntents • the Physician Payments Sunshine Act and similar state laws that require reporting of certain payments and other transfers of value made by applicable manufacturers, directly or indirectly, to or on behalf of covered recipients including physicians (defined to include doctors of medicine, osteopathy, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, certified nurse midwives and teaching hospitals as well as ownership and investment interests held by physicians and their immediate family members; • state laws that limit or prohibit the provision of certain payments and other transfers of value to certain covered healthcare providers; • the prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party; • state laws that prohibit other specified practices, such as billing clinicians for testing that they order; waiving coinsurance, copayments, deductibles and other amounts owed by patients; billing a state Medicaid program at a price that is higher than what is charged to one or more other payors; • similar foreign laws and regulations that may apply to us in the countries in which we operate or may operate in the future; and • laws that relate to maintaining accurate information and control over activities that may fall within the purview of the U.S.
Parts 11, 50, 54, 56, 58 and 812, and all equivalent legal requirements in other jurisdictions; 38 Table of Contents • the federal Anti-Kickback Statute, which prohibits knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for the referral of an individual, for the furnishing of or arrangement for the furnishing of any item or service for which payment may be made in whole or in part by a federal healthcare program, or the purchasing, leasing, ordering, arranging for, or recommend purchasing, leasing or ordering, any good, item or service for which payment may be made, in whole or in part, under a federal healthcare program; • EKRA, which prohibits payments for referrals to recovery homes, clinical treatment facilities, and laboratories and reaches beyond federal health care programs, to include private insurance; • the federal physician self-referral law, known as the Stark Law, which prohibits a physician from making a referral to an entity for certain designated health services covered by the Medicare program, including laboratory and pathology services, if the physician or an immediate family member has a financial relationship with the entity unless an exception applies, and prohibits an entity from billing for designated health services furnished pursuant to a prohibited referral; • the federal False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government; • the federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; • the HIPAA fraud and abuse provisions, which create new federal criminal statutes that prohibit, among other things, defrauding health care benefit programs, willfully obstructing a criminal investigation of a healthcare offense and falsifying or concealing a material fact or making any materially false statements in connection with the payment for healthcare benefits, items or services; • other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral, fee-splitting restrictions, insurance fraud laws, anti-markup laws, prohibitions on the provision of tests at no or discounted cost to induce physician or patient adoption, and false claims acts, which may extend to services reimbursable by any third-party payor, including private insurers; • the 21st Century Cures Act information blocking prohibition, which prohibits covered actors from engaging in certain practices that are likely to interfere with the access, exchange, or use of electronic health information; • the Physician Payments Sunshine Act and similar state laws that require reporting of certain payments and other transfers of value made by applicable manufacturers, directly or indirectly, to or on behalf of covered recipients including physicians (defined to include doctors of medicine, osteopathy, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, certified nurse midwives and teaching hospitals as well as ownership and investment interests held by physicians and their immediate family members; • state laws that limit or prohibit the provision of certain payments and other transfers of value to certain covered healthcare providers; • the prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party; • state laws that prohibit other specified practices, such as billing clinicians for testing that they order; waiving coinsurance, copayments, deductibles and other amounts owed by patients; billing a state Medicaid program at a price that is higher than what is charged to one or more other payors; • similar foreign laws and regulations that may apply to us in the countries in which we operate or may operate in the future; and • laws that relate to maintaining accurate information and control over activities that may fall within the purview of the U.S.
Disruptions and errors in these delivery service and accessioning errors and breaches, whether due to error by the delivery service, labor disruptions, bad weather, natural disaster, terrorist acts or threats, outbreaks of disease or for other reasons, could adversely affect specimen integrity, our ability to process or store samples in a timely manner and to service our customers, and ultimately our reputation and our business.
Disruptions or errors in delivery service and accessioning errors and breaches, whether due to error by the delivery service, labor disruptions, bad weather, natural disaster, terrorist acts or threats, outbreaks of disease or for other reasons, could adversely affect specimen integrity, our ability to process or store samples in a timely manner and to service our customers, and ultimately our reputation and our business.
In particular, challenging macroeconomic conditions, including cost inflation, decreases in per capita income and levels of disposable income, increased and/or prolonged unemployment or a decline in consumer confidence, as well as limited or significantly reduced points of access of our tests, could have a material adverse effect on the demand for our tests.
In particular, challenging macroeconomic conditions, including cost inflation, decreases in per capita income and levels of disposable income, tariffs, increased and/or prolonged unemployment or a decline in consumer confidence, as well as limited or significantly reduced points of access of our tests, could have a material adverse effect on the demand for our tests.
We may be unable to compete effectively against our competitors either because their products and services are superior or because they may have more expertise, experience, financial resources, or stronger business relationships. These competitors may have broader product lines and greater name recognition than we do.
We may be unable to compete effectively against our competitors either because their products and services are perceived to be superior or because they may have more expertise, experience, financial resources, or stronger business relationships. These competitors may have broader product lines and greater name recognition than we do.
We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations. We currently incorporate artificial intelligence (“AI”) solutions into our workflows and these applications may become important in our operations over time.
We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations. We currently incorporate artificial intelligence (“AI”) solutions into our workflows and these applications may become increasingly important in our operations over time.
Risks Related to Being a Public Company We incur significant costs and demands on management as a result of compliance with laws and regulations applicable to public companies, which could harm our operating results. As a public company, we incur significant legal, accounting and other expenses, including costs associated with public company reporting requirements.
Risks Related to Being a Public Company We incur significant costs and demands on management as a result of compliance with laws and regulations applicable to public companies, which could harm our operating results. As a public company, we incur significant legal, accounting and other expenses associated with public company reporting requirements.
Third parties, including our competitors, have asserted and may in the future assert that we are infringing their intellectual property rights. We may also become subject to and/or initiate future intellectual property litigation as our product portfolio and the level of competition in our industry grow.
Third parties, including our competitors, have asserted and may in the future assert that we are infringing their intellectual property rights. We may also become subject to and/or initiate future intellectual property litigation as our IP and product portfolio and the level of competition in our industry grow.
If we are not able to generate demand for our tests at sufficient volume, or if it takes significantly more time to generate this demand than we anticipate, our business, prospects, financial condition and results of operations could be materially harmed.
If we are not able to sustain demand for our tests at sufficient volume, or if it takes significantly more time to generate this demand than we anticipate, our business, prospects, financial condition and results of operations could be materially harmed.
Furthermore, pending legislative proposals, if enacted, such as the VALID Act, could create new or different regulatory and compliance burdens on us and could have a negative effect on our ability to keep products on the market or develop new products, which could have a material effect on our business.
Furthermore, legislative proposals, if enacted, such as the VALID Act, could create new or different regulatory and compliance burdens on us and could have a negative effect on our ability to keep products on the market or develop new products, which could have a material effect on our business.
However, at various points in recent years, FDA has indicated that it intends to end enforcement discretion for many tests offered as LDTs, and to require such tests to comply with certain FDA regulatory requirements.
However, at various points in recent years, the FDA has indicated that it intends to end enforcement discretion for many tests offered as LDTs, and to require such tests to comply with certain FDA regulatory requirements.
Our operating results may fluctuate significantly, depending on a variety of factors, including the following: • our success in marketing and selling, and changes in demand for, our tests, and the level of reimbursement and collection obtained for such tests; • seasonal and environmental variations affecting healthcare provider recommendations for our tests and patient compliance with healthcare provider recommendations, including without limitation holidays, weather events, and circumstances such as the outbreak of coronavirus or influenza that may limit patient access to medical practices for diagnostic tests and preventive services; • our success in collecting payments from third-party payors, patients and collaborative partners, variation in the timing of these payments and recognition of these payments as revenues; • the pricing of our tests, including potential changes in CMS or other reimbursement rates; • circumstances affecting our ability to provide our tests, including weather events, supply shortages, or regulatory or other circumstances that adversely affect our ability to manufacture our tests or process tests in our clinical laboratories; • circumstances affecting our ability to provide health information and data science services to biopharma partners, including software or hardware failures, insufficient capacity, regulatory changes or other circumstances that adversely affect the ability of us to deliver these services; • fluctuations in the amount and timing of our selling and marketing costs and our ability to manage costs and expenses and effectively implement our business; • our research and development activities; and • our ability to collect, use, and commercialize data in a changing regulatory environment at a time when the public is growing increasingly concerned about privacy.
Our operating results may fluctuate significantly, depending on a variety of factors, including the following: • our success in marketing and selling, and changes in demand for our tests; • seasonal and environmental variations affecting healthcare provider recommendations for our tests and patient compliance with healthcare provider recommendations, including without limitation holidays, weather events, and circumstances such as the outbreak of coronavirus or influenza that may limit patient access to medical practices for diagnostic tests and preventive services; • our success in collecting payments from third-party payors, patients and collaborative partners, variation in the timing of these payments and recognition of these payments as revenues; • the pricing of our tests, including potential changes in CMS or other reimbursement rates; • circumstances affecting our ability to provide our tests, including weather events, supply shortages, or regulatory or other circumstances that adversely affect our ability to manufacture our tests or process tests in our clinical laboratories; • circumstances affecting our ability to provide health information and data science services to biopharma partners, including software or hardware failures, insufficient capacity, regulatory changes or other circumstances that adversely affect our ability to deliver these services; • fluctuations in the amount and timing of our selling and marketing costs and our ability to manage costs and expenses and effectively implement our business; • our research and development activities; and • our ability to collect, use, and commercialize data in a changing regulatory environment at a time when the public is growing increasingly concerned about privacy.
These laws and regulations currently include, among others: • HIPAA, which establishes comprehensive federal standards with respect to the privacy and security of protected health information and requirements for the use of certain standardized electronic transactions; • amendments to HIPAA under HITECH, which strengthen and expand HIPAA privacy and security compliance requirements, increase penalties for violators and expand vicarious liability, extend enforcement authority to state attorneys general, and impose requirements for breach notification; • the General Data Protection Regulation (“GDPR”) and UK Data Protection Act 2018 (“UK GDPR”), which imposes strict privacy and security requirements on controllers and processors of European and UK personal data, including enhanced protections for “special categories” of personal data, including sensitive information such as health and genetic information of data subjects; • the CCPA , and similar consumer privacy laws in Colorado, Connecticut, Utah, and Virginia, which, among other things, regulate how subject businesses may collect, use, disclose and/or sell the personal information of consumers who reside in each state, affords rights to consumers that they may exercise against businesses that collect their information, and requires implementation of reasonable security measures to safeguard personal information of consumers; • laws governing genetic counseling services, relating to, among other things, the adequacy of health care, the practice of medicine and other health professions (including the provision of remote care and cross-coverage practice), equipment, personnel, operating policies and procedures and the prerequisites for ordering laboratory tests.
These laws and regulations currently include, among others: • HIPAA, which establishes comprehensive federal standards with respect to the privacy and security of protected health information and requirements for the use of certain standardized electronic transactions; • amendments to HIPAA under HITECH, which strengthen and expand HIPAA privacy and security compliance requirements, increase penalties for violators and expand vicarious liability, extend enforcement authority to state attorneys general, and impose requirements for breach notification; • the General Data Protection Regulation (“GDPR”) and UK Data Protection Act 2018 (“UK GDPR”), which imposes strict privacy and security requirements on controllers and processors of European and UK personal data, including enhanced protections for “special categories” of personal data, including sensitive information such as health and genetic information of data subjects; • the CCPA, and similar consumer privacy laws in other states, which, among other things, regulate how subject businesses may collect, use, disclose and/or sell the personal information of consumers who reside in each state, affords rights to consumers that they may exercise against businesses that collect their information, and requires implementation of reasonable security measures to safeguard personal information of consumers; • laws governing genetic counseling services, relating to, among other things, the adequacy of health care, the practice of medicine and other health professions (including the provision of remote care and cross-coverage practice), equipment, personnel, operating policies and procedures and the prerequisites for ordering laboratory tests.
These provisions will include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board; • the requirement that directors may only be removed from the Board for cause; • the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by a majority of the board, our chairman of the board or our chief executive officer and may not be called by any other person, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; 48 Table of Co ntents • the requirement that changes or amendments to certain provisions of our Charter must be approved by holders of at least two-thirds of our Class A common stock; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
These provisions will include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board; • the requirement that directors may only be removed from the Board for cause; • the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by a majority of the board, our chairman of the board or our chief executive officer and may not be called by any other person, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement that changes or amendments to certain provisions of our Charter must be approved by holders of at least two-thirds of our Class A common stock; and 49 Table of Contents • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Our Charter and our Bylaws provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware and federal court within the State of Delaware will be exclusive forums for any: • derivative action or proceeding brought on our behalf; • action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors, officers, stockholders, employees or agents to us or our stockholders; • action asserting a claim against the us or any of our directors, officers, stockholders, employees or agents arising pursuant to any provision of the General Corporation Law, our Charter or our Bylaws or as to which the General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware: • action to interpret, apply, enforce or determine the validity of our Charter or our Bylaws; or • other action asserting a claim against us or any of our directors, officers, stockholders, employees or agents that is governed by the internal affairs doctrine.
Our Charter and our Bylaws provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware and federal court within the State of Delaware will be exclusive forums for any: • derivative action or proceeding brought on our behalf; • action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors, officers, stockholders, employees or agents to us or our stockholders; • action asserting a claim against the us or any of our directors, officers, stockholders, employees or agents arising pursuant to any provision of the General Corporation Law, our Charter or our Bylaws or as to which the General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware: • action to interpret, apply, enforce or determine the validity of our Charter or our Bylaws; or 50 Table of Contents • other action asserting a claim against us or any of our directors, officers, stockholders, employees or agents that is governed by the internal affairs doctrine.
Any finding that our patents or applications are unenforceable could harm our ability to prevent others from practicing the related technology, and a finding that others have inventorship or ownership rights to our patents and applications could require us to obtain certain rights to practice related technologies, which may not be available on favorable terms, if at all.
Any finding that our patents or applications are unenforceable or invalid would harm our ability to prevent others from practicing the related technology, and a finding that others have inventorship or ownership rights to our patents and applications could require us to obtain certain rights to practice related technologies, which may not be available on favorable terms, if at all.
Our businesses face changing technologies, shifting provider and patient needs, and frequent introductions of rival products and services. To compete successfully, we must accurately anticipate technology developments and deliver innovative, relevant and useful products, services, and technologies in a timely manner. As our businesses evolve, the competitive pressure to innovate will encompass a wider range of products and services.
Our businesses face changing technologies, shifting provider and patient needs, and frequent introductions of rival products and services. To compete successfully, we must accurately anticipate technological developments and deliver innovative, relevant and useful products, services, and technologies in a timely manner. As our businesses evolve, the competitive pressure to innovate will encompass a wider range of products and services.
We are and may be subject to the examination of our tax returns by federal, state and foreign tax authorities. If our tax strategies are ineffective or it is not in compliance with domestic and international tax laws, as applicable, our financial position, operating results and cash flows could be adversely affected.
We are and may be subject to the examination of our tax returns by federal, state and foreign tax authorities. If our tax strategies are ineffective or not in compliance with domestic and international tax laws, as applicable, our financial position, operating results and cash flows could be adversely affected.
Our business model assumes that we will be able to generate significant test volume, particularly with respect to exome sequencing and whole genome sequencing in addition to our panel testing offerings, and we may not succeed in continuing to drive adoption of our tests to achieve sufficient volumes.
Our business model assumes that we will be able to sustain significant test volume, particularly with respect to exome sequencing and whole genome sequencing in addition to our panel testing offerings, and we may not succeed in continuing to drive adoption of our tests to achieve sufficient volumes.
Failure to comply with applicable clinical laboratory licensure requirements or standards may result in a range of enforcement actions, including license suspension, limitation, or revocation, directed plan of action, onsite monitoring, civil monetary penalties, criminal sanctions, and cancellation of the laboratory’s approval to receive Medicare and Medicaid payment for our services, as well as significant adverse publicity.
Failure to comply with applicable clinical laboratory licensure requirements or standards may result in a range of enforcement actions, including license suspension, limitation, or revocation, directed plan of action, onsite monitoring, civil monetary penalties, criminal sanctions, and cancellation of the laboratory’s approval to receive Medicare and Medicaid payment for our 24 Table of Contents services, as well as significant adverse publicity.
Our estimates of the global market opportunity for our current products and services and those under development are based on a number of internal and third-party estimates, including, the market opportunity for rare disease and pediatric developmental disorders, adult disorders and newborn screening.
In addition, our estimates of the global market opportunity for our current products and services and those under development are based on a number of internal and third-party estimates, including, the market opportunity for rare disease and pediatric developmental disorders, adult disorders and newborn screening.
Moreover, any claim for reimbursement that is predicated on a violation of the Anti-Kickback Statute may constitute a “false claim” under the False Claims Act (discussed in further detail below). In 2018, Congress passed the Eliminating Kickbacks in Recovery Act (“EKRA”), as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.
Moreover, any claim for reimbursement that is predicated on a violation of the Anti-Kickback Statute may constitute a “false claim” under the False Claims Act (discussed in further detail below). 36 Table of Contents In 2018, Congress passed the Eliminating Kickbacks in Recovery Act (“EKRA”), as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.
Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious internal or external human acts and natural disasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems.
Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious internal or external human acts and natural disasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, 47 Table of Contents computer viruses and similar disruptive problems.
If we do not continue to innovate and provide products and services that are useful to customers, including providers and patients, and partners, we may not remain competitive, which could harm our business and operating results. • If third-party payors, including managed care organizations, private health insurers and government health plans, do not provide adequate reimbursement for our tests, or seek to amend or renegotiate their fee reimbursement schedules, or if we are unable to comply with their requirements for reimbursement, our commercial success could be negatively affected. • We may need to raise additional capital to fund our existing operations, develop additional products and services, commercialize new products and services or expand our operations. • If we fail to comply with federal and state laboratory licensing requirements or standards, we could lose the ability to perform our tests or experience disruptions to our business. • We rely on highly skilled personnel in a broad array of disciplines and, if we are unable to hire, retain or motivate these individuals, or maintain our corporate culture, we may not be able to maintain the quality of our services or grow effectively. • We rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers or service providers. • We rely on a limited number of product and service providers for data infrastructure and analytics capabilities, and any disruption of, or interference with, our use of data and workflow services could adversely affect our business, financial condition, and results of operations, and we may not be able to find replacements or immediately transition to alternative products or service providers. • Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding adoption of our products and services.
If we do not continue to innovate and provide products and services that are useful to customers, including providers and patients, and partners, we may not remain competitive, which could harm our business and operating results. • If third-party payors, including managed care organizations, private health insurers and government health plans, do not provide adequate reimbursement for our tests, or seek to amend or renegotiate their fee reimbursement schedules, or if we are unable to comply with their requirements for reimbursement, our commercial success could be negatively affected. • We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations. • We may need to raise additional capital to fund our existing operations, develop additional products and services, commercialize new products and services or expand our operations. • If we fail to comply with federal and state laboratory licensing requirements or standards, we could lose the ability to perform our tests or experience disruptions to our business. • We rely on highly skilled personnel in a broad array of disciplines and, if we are unable to hire, retain or motivate these individuals, or maintain our corporate culture, we may not be able to maintain the quality of our services or grow effectively. • We rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers or service providers. • We rely on a limited number of product and service providers for data infrastructure and analytics capabilities, and any disruption of, or interference with, our use of data and workflow services could adversely affect our business, financial condition, and results of operations, and we may not be able to find replacements or immediately transition to alternative products or service providers. • Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding adoption of our products and services.
There is no guarantee that the accuracy and reproducibility we have demonstrated to date will continue as our product deliveries increase and our product and service portfolio expands. Our products and services use a number of complex and sophisticated biochemical and bioinformatics processes, many of which are highly sensitive to external factors.
There is no guarantee that the accuracy and reproducibility we have demonstrated to date will continue to meet customer expectations as our product deliveries increase and our product and service portfolio expands. Our products and services use a number of complex and sophisticated biochemical and bioinformatics processes, many of which are highly sensitive to external factors.
The cost of compliance with these laws and regulations may become significant, and our failure to comply may result in substantial fines or other consequences, and either could negatively affect our operating results. Changes in FDA enforcement discretion for laboratory developed tests LDTs could subject our operations to much more significant regulatory requirements.
The cost of compliance with these laws and regulations may become significant, and our failure to comply may result in substantial fines or other consequences, and either could negatively affect our operating results. Changes in FDA oversight for laboratory developed tests LDTs could subject our operations to much more significant regulatory requirements.
Patent & Trademark Office (“USPTO”) may change the standards of patentability and validity of patents within the screening and diagnostics space, and any such changes could have a negative impact on our business. There have been several cases involving “gene patents” and diagnostic claims that have been considered by the U.S. Supreme Court.
Patent & Trademark Office (“USPTO”) may change the standards of patentability and validity of patents within the screening and diagnostics space, and any such changes could have an impact on our business. There have been several cases involving “gene patents” and diagnostic claims that have been considered by the U.S. Supreme Court.
If our competitors are more successful than us in developing compelling products and services for or in attracting and retaining customers or partners in the market for genetic testing and screening, health information and data science products and services, our operating results could be harmed. 20 Table of Co ntents If third-party payors, including managed care organizations, private health insurers and government health plans, do not provide adequate reimbursement for our tests, or seek to amend or renegotiate their fee reimbursement schedules, or if we are unable to comply with their requirements for reimbursement, our commercial success could be negatively affected .
If our competitors are more successful than us in developing compelling products and services for or in attracting and retaining customers or partners in the market for genetic testing and screening, health information and data science products and services, our operating results could be harmed. 21 Table of Contents If third-party payors, including managed care organizations, private health insurers and government health plans, do not provide adequate reimbursement for our tests, or seek to amend or renegotiate their fee reimbursement schedules, or if we are unable to comply with their requirements for reimbursement, our commercial success could be negatively affected .
Several states require the licensure of out-of-state laboratories that accept specimens from certain states. In addition to having a laboratory license in New York, our clinical reference laboratory is approved on test-specific bases for the tests it runs as laboratory-developed tests (“LDTs”), by the New York State Department of Health (“NYDOH”).
Several states require the licensure of out-of-state laboratories that accept specimens from certain states. In addition to having a laboratory license in New York, our clinical reference laboratory is approved on test-specific bases for the tests it runs as LDTs, by the New York State Department of Health (“NYDOH”).
As of December 31, 2024, our public warrants were exercisable for 457,323 shares of Class A common stock at $379.50 per share, and our private warrants were exercisable for 209,192 shares of Class A common stock at $379.50 per share.
As of December 31, 2025, our public warrants were exercisable for 457,323 shares of Class A common stock at $379.50 per share, and our private warrants were exercisable for 209,192 shares of Class A common stock at $379.50 per share.
These and other factors beyond our control could result in delays or other difficulties in the research and development, approval, production, launch, marketing or distribution of enhanced or new tests and could adversely affect our competitive position and results of operations. 28 Table of Co ntents We currently use, and in the future expect to increase our use of, information and rights from customers, strategic partners, and collaborators for several aspects of our operations, and if we cannot maintain current and enter new relationships with these parties with adequate access and authorization to such information, our business will suffer.
These and other factors beyond our control could result in delays or other difficulties in the research and development, approval, production, launch, marketing or distribution of enhanced or new tests and could adversely affect our competitive position and results of operations. 29 Table of Contents We currently use, and in the future expect to increase our use of, information and rights from customers, strategic partners, and collaborators for several aspects of our operations, and if we cannot maintain current and enter new relationships with these parties with adequate access and authorization to such information, our business will suffer.
In the event that the FDA requires marketing authorization of our LDTs in the future, the FDA may not ultimately grant any clearance, authorization or approval requested by us in a timely manner, may limit our indication in a way that is not commercially desirable, or refuse to provide such authorization at all.
In the event that the FDA requires or we voluntarily seek marketing authorization of our LDTs in the future, the FDA may not ultimately grant any clearance, authorization or approval requested by us in a timely manner, may limit our indication in a way that is not commercially desirable, or refuse to provide such authorization at all.
Any claim brought against us, with or without merit, could increase our liability insurance rates or prevent it from securing insurance coverage in the future. Errors, defects, or mistakes in our products or services, and operations could harm our reputation, decrease market acceptance of our products or services.
Any claim brought against us, with or without merit, could increase our liability insurance rates or prevent it from securing insurance coverage in the future. 40 Table of Contents Errors, defects, or mistakes in our products or services, and operations could harm our reputation, decrease market acceptance of our products or services.
Any of the foregoing could adversely affect our cash flow and financial condition. If we use hazardous materials in a manner that causes injury, we could be liable for resulting damages. Our activities currently require the use of hazardous chemicals and biological material.
Any of the foregoing could adversely affect our cash flow and financial condition. 33 Table of Contents If we use hazardous materials in a manner that causes injury, we could be liable for resulting damages. Our activities currently require the use of hazardous chemicals and biological material.
If for any reason our arrangements with our data centers or third-party providers are terminated or interrupted, such termination or interruption could adversely affect our business, financial 26 Table of Co ntents condition and results of operations. We exercise little control over these providers, which increases our vulnerability to problems with the services they provide.
If for any reason our arrangements with our data centers or third-party providers are terminated or interrupted, such termination or interruption could adversely affect our business, financial condition and results of operations. We exercise little control over these providers, which increases our vulnerability to problems with the services they provide.
The taxes imposed by new legislation, cost reduction measures and the expansion in the government’s role in the 38 Table of Co ntents U.S. healthcare industry may result in decreased profits to us, which may adversely affect our business, financial condition and results of operations. PAMA presents significant uncertainty for future CMS reimbursement rates for our tests.
The taxes imposed by new legislation, cost reduction measures and the expansion in the government’s role in the U.S. healthcare industry may result in decreased profits to us, which may adversely affect our business, financial condition and results of operations. PAMA presents significant uncertainty for future CMS reimbursement rates for our tests.
Among other things, the CCPA confers to California consumers the right to receive notice of the categories of personal information that will be collected by a business, 44 Table of Co ntents how the business will use and share the personal information, and the third parties who will receive the personal information; the CCPA also confers rights to access, delete, or transfer personal information; and the right to receive equal service and pricing from a business after exercising a consumer right granted by the CCPA.
Among other things, the CCPA confers to California consumers the right to receive notice of the categories of personal information that will be collected by a business, how the business will use and share the personal information, and the third parties who will receive the personal information; the CCPA also confers rights to access, delete, or transfer personal information; and the right to receive equal service and pricing from a business after exercising a consumer right granted by the CCPA.
While these guidelines may be subject to review and modification by the USPTO over time, we cannot assure you that our intellectual property strategy or patent portfolio will not be negatively impacted by the decisions described above, rulings in other cases or changes in guidance or procedures issued by the USPTO.
While these guidelines may be subject to review and modification by the USPTO over time, we cannot assure you that our intellectual property strategy or patent 42 Table of Contents portfolio will not be negatively impacted by the decisions described above, rulings in other cases or changes in guidance or procedures issued by the USPTO.
If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or products and services or grant licenses on terms that are not favorable to us. Our credit agreement contains operating and financial restrictions that may limit our business and financing activities.
If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or products and services or grant licenses on terms that are not favorable to us. 23 Table of Contents Our credit agreement contains operating and financial restrictions that may limit our business and financing activities.
When cleared, authorized or approved, we and our collaborators may market, sell, and distribute our products and services outside of the U.S., and our business would be subject to risks associated with doing business outside of the U.S., including an increase in 24 Table of Co ntents our expenses and diversion of our management’s attention from the development of future products and services.
When cleared, authorized or approved, we and our collaborators may market, sell, and distribute our products and services outside of the U.S., and our business would be subject to risks associated with doing business outside of the U.S., including an increase in our expenses and diversion of our management’s attention from the development of future products and services.
To varying degrees some of those services are proprietary to how each platform performs in connection with our current usage of the services. Nearly all of our data storage and analytics are conducted on, and the data and content we generate on our platforms are processed through, servers hosted by these providers, particularly Azure, AWS and OCI.
To varying degrees some of those services are proprietary to how each platform performs in connection with our current usage of the services. Nearly all of our data storage and analytics are conducted on, and the data and content we generate on our platforms are processed through, servers hosted by these providers.
Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding the adoption of our products and services. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations in any given fiscal quarter or year.
Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding the adoption of our products and services and their estimated global market opportunity. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations in any given fiscal quarter or year.
Medicare payments are subject to audit, including through the Comprehensive Error Rate Testing (“CERT”), 35 Table of Co ntents program, and payments may be recouped by CMS if it is determined that they were improperly made. Currently, a small percentage of our revenues are generated by payments from Medicare.
Medicare payments are subject to audit, including through the Comprehensive Error Rate Testing (“CERT”), program, and payments may be recouped by CMS if it is determined that they were improperly made. Currently, a small percentage of our revenues are generated by payments from Medicare.
The inability to perform our tests or the backlog that could develop if our laboratories are inoperable for even a short period of time may result in the loss of customers or harm our reputation.
The inability to perform our tests or the 20 Table of Contents backlog that could develop if our laboratories are inoperable for even a short period of time may result in the loss of customers or harm our reputation.
If an author or other third party that distributes such open-source software were to allege 42 Table of Co ntents that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations.
If an author or other third party that distributes such open-source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations.
Our management and other personnel will need to devote a substantial amount of time to these 46 Table of Co ntents compliance and disclosure obligations. If these requirements divert the attention of our management and personnel from other aspects of our business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
Our management and other personnel will need to devote a substantial amount of time to these compliance and disclosure obligations. If these requirements divert the attention of our management and personnel from other aspects of our business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
We are subject to Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), a federal law that regulates clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease. CLIA regulations establish specific standards with respect to personnel qualifications, facility administration, proficiency testing, quality control, quality assurance and inspections.
We are subject to the CLIA, a federal law that regulates clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease. CLIA regulations establish specific standards with respect to personnel qualifications, facility administration, proficiency testing, quality control, quality assurance and inspections.
This may result in decreased revenue, and we may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in revenue. This inability could cause our operating results in a given fiscal quarter or year to be higher or lower than expected.
This may result in decreased revenue, and we may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in revenue. This inability could cause our operating results in a given fiscal quarter or year to be higher or lower than 28 Table of Contents expected.
These risks include, among others, the following: • We need to scale our infrastructure in advance of demand for our products and services, and our failure to generate sufficient demand for our products and services would have a negative impact on our business and our ability to attain profitability. • We face intense competition.
These risks include, among others, the following: • We need to scale our infrastructure in advance of demand for our products and services, and our failure to sustain sufficient demand for our products and services would have a negative impact on our business and our ability to maintain profitability. • We face intense competition.
Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Class A common stock. 51 Table of Co ntents Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Class A common stock. Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
In addition, we cannot provide assurance that we would prevail in any such suits to the extent necessary to conduct our business according to our strategic plan or that the damages or other remedies, if any, awarded against us would not be substantial.
In addition, we cannot 43 Table of Contents provide assurance that we would prevail in any such suits to the extent necessary to conduct our business according to our strategic plan or that the damages or other remedies, if any, awarded against us would not be substantial.
Included on our consolidated balance sheet as of December 31, 2024, are liabilities related to our public and private warrants which are each remeasured at fair value at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations.
Included on our consolidated balance sheet as of December 31, 2025, are liabilities related to our public and private warrants which are each remeasured at fair value at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the consolidated statements of operations and comprehensive loss.
We continue to face a number of risks relative to protecting this critical information, including loss of access risk, inappropriate disclosure, inappropriate modification, and the risk 43 Table of Co ntents of our being unable to adequately monitor and modify our controls over our critical information.
We continue to face a number of risks relative to protecting this critical information, including loss of access risk, inappropriate disclosure, inappropriate modification, and the risk of our being unable to adequately monitor and modify our controls over our critical information.
In addition, the credit agreement requires us to maintain aggregate 22 Table of Co ntents unrestricted cash of not less than $5.0 million and minimum levels of quarterly core revenue through the third quarter of 2028.
In addition, the credit agreement requires us to maintain aggregate unrestricted cash of not less than $5.0 million and minimum levels of quarterly core revenue through the third quarter of 2028.
Data privacy and security concerns relating to our technology and our practices could damage our reputation, subject it to significant legal and financial exposure, and deter current and potential users or customers from using our products and services.
Data privacy and security concerns relating to our technology, including our use of AI, and our practices could damage our reputation, subject it to significant legal and financial exposure, and deter current and potential users or customers from using our products and services.
Risks Related to Our Business, Industry and Operations We need to scale our infrastructure in advance of demand for our tests, and our failure to generate sufficient demand for our tests would have a negative impact on our business and our ability to attain profitability.
Risks Related to Our Business, Industry and Operations We need to scale our infrastructure in advance of demand for our tests, and our failure to sustain sufficient demand for our tests would have a negative impact on our business and our ability to maintain profitability.
Further, we must expend resources to operationalize our existing collaborations with our health system partners, which requires 29 Table of Co ntents substantial effort in areas such as integrations for testing workflow, electronic medical record, consents, marketing, and billing.
Further, we must expend resources to operationalize our existing collaborations with our health system partners, which requires 30 Table of Contents substantial effort in areas such as integrations for testing workflow, electronic medical record, consents, marketing, and billing.
The laws of some foreign countries do not protect proprietary 40 Table of Co ntents rights to the same extent as the laws of the U.S., and we may encounter difficulties in establishing and enforcing its proprietary rights in some jurisdictions.
The laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the U.S., and we may encounter difficulties in establishing and enforcing its proprietary rights in some jurisdictions.
In addition, state and foreign requirements for laboratory certification may be costly or difficult to meet and could affect our ability to receive specimens from certain states or foreign countries.
In addition, state 37 Table of Contents and foreign requirements for laboratory certification may be costly or difficult to meet and could affect our ability to receive specimens from certain states or foreign countries.
Furthermore, on December 1, 2022, the U.S. Department of Health and Human Services, Office for Civil Rights (“OCR”) issued a Bulletin highlighting the obligations of HIPAA covered entities and business associates with respect to the use of online tracking technologies. OCR updated this Bulletin on March 18, 2024.
Department of Health and Human Services, Office for Civil Rights (“OCR”) issued a Bulletin highlighting the obligations of HIPAA covered entities and business associates with respect to the use of online tracking technologies. OCR updated this Bulletin on March 18, 2024.
We do not know if we will be able to identify any other acquisitions we deem suitable, whether we will be able to successfully complete any acquisitions on favorable terms or at all, or whether we will be able to successfully integrate any acquired products 31 Table of Co ntents or technologies.
We do not know if we will be able to identify any other acquisitions we deem suitable, whether we will be able to successfully complete any acquisitions on favorable terms or at all, or whether we will be able to successfully integrate any acquired products or technologies.
We may need to raise additional capital to fund our existing operations, develop additional products and services, commercialize new products and services or expand our operations. We have incurred net losses and negative cash flows from operations since our inception, with an accumulated deficit of $1.4 billion as of December 31, 2024.
We may need to raise additional capital to fund our existing operations, develop additional products and services, commercialize new products and services or expand our operations. We have incurred net losses since our inception, with an accumulated deficit of approximately $1.4 billion as of December 31, 2025.
Due to these factors and the evolving nature of our business, our historical revenue growth rate and historical gross operating margins may not be indicative of our future performance. 30 Table of Co ntents Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited.
Due to these factors and the evolving nature of our business, our historical revenue growth rate and historical gross operating margins may not be indicative of our future performance. 31 Table of Contents Our ability to utilize our net operating loss carry forwards and certain other tax attributes may be limited.
Failure to maintain our trademark registrations, or to obtain new trademark registrations in the future, could limit our ability to protect our trademarks and impede our marketing efforts in the countries in which we operate.
Failure to maintain our trademark registrations, or to obtain new trademark registrations in the future, could limit our ability to protect our trademarks and impede our marketing efforts, including our efforts on GeneDx Infinity TM , in the countries in which we operate.
In setting standards to protect the confidentiality, integrity and security of PHI, the regulations establish a regulatory framework that addresses a variety of subjects, including: • the circumstances under which uses and disclosures of PHI are permitted or required without a written authorization from the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; • a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI; • requirements to notify individuals if there is a breach of their PHI; • the contents of notices of privacy practices related to the use and disclosure of PHI; • administrative, technical and physical safeguards required of entities that use or receive PHI; • criteria related to the deidentification and aggregation of PHI; and • the use and protection of electronic PHI.
In setting standards to protect the confidentiality, integrity and security of PHI, the regulations establish a regulatory framework that addresses a variety of subjects, including: • the circumstances under which uses and disclosures of PHI are permitted or required without a written authorization from the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; • a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI; • requirements to notify individuals if there is a breach of their PHI; • the contents of notices of privacy practices related to the use and disclosure of PHI; • administrative, technical and physical safeguards required of entities that use or receive PHI; • criteria related to the deidentification and aggregation of PHI; and • the use and protection of electronic PHI. 35 Table of Contents We are also required to comply with applicable state privacy, security and breach notification laws and regulations, which may be more stringent than federal HIPAA requirements.
A subset of these incidents was determined to be reportable breaches requiring disclosure to 34 Table of Co ntents OCR, as well as to the affected patients.
A subset of these incidents was determined to be reportable breaches requiring disclosure to OCR, as well as to the affected patients.
There is no guarantee that the public warrants will ever be in the money, and they may expire worthless and the terms of our public warrants may be amended. The exercise price for the public warrants is $379.50 per share of Class A common stock.
There is no guarantee that the public warrants will ever be in the money, and they may expire worthless and the terms of our public warrants may be amended. The exercise price for the public warrants is $379.50 per share of Class A common stock and expire pursuant to their terms on July 22, 2026.
Any security compromise that causes an apparent privacy violation could also result in legal claims or proceedings; liability under federal, state, foreign, or multinational laws that regulate the privacy, security, or breach of personal information, such as but not limited to the HIPAA, HITECH, state data security and data breach notification laws, the EU’s GDPR, the UK Data Protection Act of 2018; and related regulatory penalties.
This risk is heightened given the sensitivity of the data we collect. 45 Table of Contents Any security compromise that causes an apparent privacy violation could also result in legal claims or proceedings; liability under federal, state, foreign, or multinational laws that regulate the privacy, security, or breach of personal information, such as but not limited to the HIPAA, HITECH, state data security and data breach notification laws, the EU’s GDPR, the UK Data Protection Act of 2018; and related regulatory penalties.
Any failure to obtain or retain the rights to necessary technologies on acceptable commercial terms could require us to re-configure our products and services, which could negatively impact their commercial sale or increase the associated costs, either of which could materially harm our business and adversely affect our future revenues and ability to achieve sustained profitability.
Any failure to obtain or retain the rights to necessary technologies on acceptable commercial terms could require us to re-configure our products and services, which could negatively impact their commercial sale or increase the associated costs, either of which could materially harm our business and adversely affect our future financial condition and results of operations.
We had 28,016,545 shares of Class A common stock outstanding as of December 31, 2024. We have filed a registration statement which registers the offer and sale from time to time by certain selling stockholders of up to 10,803,779 shares of our Class A common stock.
We had 29,245,296 shares of Class A common stock outstanding as of December 31, 2025. We have filed a registration statement which registers the offer and sale from time to time by certain selling stockholders of up to 10,803,779 shares of our Class A common stock.
As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations in any given quarter or fiscal year. • Uncertainty in the development and commercialization of our enhanced or new tests or services could materially adversely affect our business, financial condition and results of operations. • We currently use, and in the future expect to increase our use of, information and rights from customers, strategic partners, and collaborators for several aspects of our operations, and if we cannot maintain current and enter new relationships with these parties with adequate access and authorization to such information, our business will suffer. • Our operating results could be subject to significant fluctuation, which could increase the volatility of our stock and warrant prices and cause losses to our stockholders. • We may be unable to realize the level of the anticipated benefits that we expect from exiting businesses and restructuring our operations, which may adversely impact our business and results of operations. • Changes in FDA enforcement discretion for LDTs could subject our operations to much more significant regulatory requirements. • Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs. • We face uncertainty related to healthcare reform, pricing, coverage and reimbursement, which could reduce our revenue. • Our inability to effectively protect our proprietary products, processes, and technologies, including the confidentiality of our trade secrets, could harm our competitive position. 18 Table of Co ntents • Security breaches, privacy issues, loss of data and other incidents could compromise sensitive, protected, or personal information related to our business, could prevent it from accessing critical information, and could expose it to regulatory liability, which could adversely affect our business.
As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations in any given quarter or fiscal year. • Uncertainty in the development and commercialization of our enhanced or new tests or services could materially adversely affect our business, financial condition and results of operations. • We currently use, and in the future expect to increase our use of, information and rights from customers, strategic partners, and collaborators for several aspects of our operations, and if we cannot maintain current and enter new relationships with these parties with adequate access and authorization to such information, our business will suffer. • Our operating results could be subject to significant fluctuation, which could increase the volatility of our stock and warrant prices and cause losses to our stockholders. • Changes in FDA oversight for LDTs could subject our operations to much more significant regulatory requirements. • A breakthrough device designation by the FDA, even though granted, may not lead to a faster development, regulatory review or authorization, nor a designation increase the likelihood that any of our product candidates will receive regulatory authorization in the United States. • Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs. • We face uncertainty related to healthcare reform, pricing, coverage and reimbursement, which could reduce our revenue. 19 Table of Contents • Our inability to effectively protect our proprietary products, processes, and technologies, including the confidentiality of our trade secrets, could harm our competitive position. • Security breaches, privacy issues, loss of data and other incidents could compromise sensitive, protected, or personal information related to our business, could prevent it from accessing critical information, and could expose it to regulatory liability, which could adversely affect our business.
From time to time, we may consider additional opportunities to acquire other products or technologies that may enhance our product platform or technology, expand the breadth of our markets or customer base, or advance our business strategies.
From time to time, we may consider additional opportunities to acquire other products or technologies that may enhance our product platform or technology, expand the breadth of our markets or customer base, or advance our business strategies. For example, in May of 2025, we completed the acquisition of Fabric Genomics.
These stockholders may choose to dispose of some or all of the shares of our Class A common stock held by them. Any disposal of shares of Class A common stock by any of these stockholders, or the perception that these sales could occur, could cause the market price of our stock or warrants to decline.
Any disposal of shares of Class A common stock by any of these stockholders, or the perception that these sales could occur, could cause the market price of our stock or warrants to decline.
In the past, we have been required to repay certain amounts to payors as a result of such audits. For more information regarding this matter, see Note 3, “ Revenue Recognition ” to our consolidated financial statements included within this Annual Report.
In the past, we have been required to repay certain amounts to payors as a result of such audits. See Note 4, “ Revenue Recognition ” to our consolidated financial statements for more information.
In particular, on September 7, 2022, a shareholder class action lawsuit was filed in the U.S. District Court for the District of Connecticut against the Company and certain of the Company’s current and former officers. In addition, on November 28, 2023, a stockholder filed a lawsuit in the U.S.
District Court for the District of Connecticut against the Company and certain of the Company’s current and former officers. In addition, on November 28, 2023, a stockholder filed a lawsuit in the U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Threats Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected, and we believe that such risks are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
Biggest changeTo date, the Company is not aware of any cybersecurity risks—including those stemming from previous incidents—that have materially impacted, or are reasonably likely to materially impact, our business strategy, results of operations, or financial condition. For more information on our cybersecurity risks, see “Risk Factors —Risks Related to Cybersecurity, Privacy and Information Technology ”.
We actively identify prevent, detect and mitigate cybersecurity threats and are positioned to effectively respond to cybersecurity incidents. Key components of our cybersecurity program include: Governance: Our board of directors, in coordination with its audit committee, oversees the risks arising from cybersecurity threats, which are embedded in our enterprise risk management (“ERM”) approach.
We actively identify, prevent, detect and mitigate cybersecurity threats and are positioned to effectively respond to cybersecurity incidents.
Removed
The Board’s audit committee receives regular reports on cybersecurity risks from our Head of Information Security, with prompt escalation of any incident that could materially affect core company operations to the Board. Further, our Head of Information Security works collaboratively across the company to implement and enhance our cybersecurity program.
Added
Key components of our cybersecurity program include: Risk Management and Strategy We conduct regular assessments of cybersecurity risks, continuously monitor our information systems for potential vulnerabilities, and test these systems in accordance with established cybersecurity policies, processes, and practices that are integrated within our comprehensive risk management program.
Removed
Through ongoing interactions with these teams, our Head of Information 52 Table of Co ntents Security monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time.
Added
To safeguard our information systems against cyber threats, we employ an array of security tools designed to identify, escalate, investigate, resolve, and facilitate timely recovery from security incidents. Our approach involves evaluating cybersecurity risks based on both their likelihood and potential impact to critical business systems and operations.
Removed
Our Head of Information Security has served in various roles in information technology and information security for over 15 years and holds an undergraduate degree in Management Information System and a graduate degree in Human Resource Management and has attained multiple professional information security certification.
Added
High-priority cybersecurity risks are incorporated into our overall risk management framework, each accompanied by a dedicated mitigation plan. Progress on these mitigation efforts is reported to the Enterprise Risk Committee, a management committee, and monitored as part of our broader risk management initiatives, which are overseen by our Board of Directors.
Removed
Incident Response Planning: We have established protocols to detect, respond to and recover from cybersecurity incidents promptly. Technical Safeguards: We deploy commercially reasonable technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Added
We partner with third-party entities, including cybersecurity assessors, consultants, and other external experts, to evaluate the effectiveness of our prevention and response mechanisms, validate identified risks, and support the development and implementation of mitigation strategies as needed.
Removed
In addition, we maintain a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
Added
Additionally, we have established due diligence procedures for third parties with whom we engage, ensuring oversight and identification of material risks arising from cybersecurity threats associated with their services, particularly those related to cybersecurity functions.
Removed
Employee Education and Awareness: We provide regular mandatory training for employees regarding cybersecurity threats to equip them with effective tools to address cybersecurity threats and to communicate our evolving information security policies, standards, processes and practices.
Added
Governance Our Board of Directors provides oversight of our risk management processes, including those related to cybersecurity, both directly and through designated committees. The Audit Committee is responsible for supervising our risk management program, focusing on key risks across short-, intermediate-, and long-term horizons.
Removed
Continuous Monitoring : We engage in the routine, periodic assessment and testing of our standards, policies, processes and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
Added
Throughout the year, Audit Committee meetings address specific areas of risk, including those associated with cybersecurity threats. The Audit Committee routinely reviews our cybersecurity risk profile in collaboration with management, including the Enterprise Risk Committee, a management committee. We maintain a risk-based approach to cybersecurity, implementing comprehensive policies across our operations aimed at addressing and mitigating cybersecurity threats and incidents.
Removed
We regularly engage third parties to perform assessments on our cybersecurity measures, including assessments, audits and independent reviews of our information security control environment and operating effectiveness. The results of such exercises are reported to our audit committee, and we adjust our cybersecurity policies, standards, processes and practices as necessary.
Added
The Company’s Chief Information Security Officer (“CISO”) oversees the establishment and ongoing maintenance of our cybersecurity program and is responsible for assessing and managing cybersecurity risks.
Removed
Artificial Intelligence Artificial intelligence (“AI”) has the potential to transform various work sectors significantly. We continue to enhance and broaden our offerings with AI technologies, and we are exploring potential third-party partnerships to help us offer more robust solutions for providers and patients.
Added
Our current CISO brings over 25 years of experience in technology and information security, including more than 12 years in senior roles within large hospitals and healthcare organizations, and holds the requisite education, skills, experience, and industry certifications essential for this position.
Removed
For example, we currently deploy a phenotype-driven algorithm that uses machine learning and is used to help identify genes to that may cause disease. While we are dedicated to actualizing AI’s potential in our offerings, we are equally committed to ensuring the security of patient data in line with data privacy laws through the Company’s AI Guidelines.
Added
The CISO delivers periodic updates regarding our cybersecurity risk profile to the Audit Committee of the Board of Directors. Artificial Intelligence Artificial intelligence (“AI”) has the capacity to significantly advance various sectors of work.
Removed
For more information on our cybersecurity risks, see “Risk Factors —Risks Related to Cybersecurity, Privacy and Information Technology ”.
Added
We are actively enhancing and expanding our offerings through AI technologies, including through the use of Fabric Genomics’ AI-based platform for Next Generation Sequencing analysis, which provides interpretation and clinical reporting for rare disease, hereditary risk, and cancer testing. In addition, we are exploring strategic partnerships with third parties to provide more comprehensive solutions for providers and patients.
Added
Our commitment to leveraging AI’s capabilities is matched by our dedication to safeguarding patient data in compliance with relevant data privacy regulations, as outlined in the Company’s AI Guidelines.
Added
For more information on potential risks related to AI, see “Risk Factors — We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations. ” 53 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe lease agreements for these properties expire in 2030 and 2036, respectively. We believe that our current facilities are suitable and adequate to meet our current needs. See Note 9, “ Leases ” to our consolidated financial statements for more information on our future lease obligations. 53 Table of Co ntents
Biggest changeThe lease agreements for these properties expire in 2030, 2034, and 2036, respectively. During the third quarter of 2025, we entered into an agreement to sublet a portion of our headquarters in Stamford, Connecticut. We believe that our current facilities are suitable and adequate to meet our current needs.
The lease agreements for these properties expire in 2034, 2031, and 2026, respectively. As previously disclosed, we exited our reproductive health and somatic tumor testing business in 2022. We are actively marketing for sublet our two laboratories in Connecticut as well as a portion of our headquarters in Stamford, Connecticut.
The lease agreements for these properties expire in 2034, 2031, 2029, and 2026, respectively. As previously disclosed, we exited our reproductive health and somatic tumor testing business in 2022. We are actively marketing for sublet our two laboratories in Connecticut as well as a portion of our headquarters in Stamford, Connecticut.
Item 2. Properties Properties for our core operations include our corporate office and headquarters located in Stamford, Connecticut, our primary operating laboratory located in Gaithersburg, Maryland, and a satellite meeting space located in New York City; each are leased spaces with an aggregate of approximately 115,000 square feet.
Item 2. Properties Properties for our core operations include our corporate office and headquarters located in Stamford, Connecticut, our primary operating laboratory located in Gaithersburg, Maryland, corporate office space in Oakland, California, and a satellite meeting space located in New York City; each are leased spaces with an aggregate of approximately 120,000 square feet.
Added
See Note 10, “ Leases ” to our consolidated financial statements for more information on our future lease obligations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 54 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 55 Item 6. Reserved 55 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 56 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 54 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 55 Item 6. Reserved 56 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 57 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+4 added−0 removed3 unchanged
Biggest changeWe anticipate that we will retain earnings, if any, to support operations and to finance the growth and development of our business. In addition, the terms of our credit agreement with Perceptive restrict us from paying cash dividends. Therefore, we do not expect to pay cash dividends for the foreseeable future. Sale of Unregistered Securities None.
Biggest changeWe anticipate that we will retain earnings, if any, to support operations and to finance the growth and development of our business. In addition, the terms of our credit agreement with Perceptive restrict us from paying cash dividends. Therefore, we do not expect to pay cash dividends for the foreseeable future.
Holders As of February 14, 2025, there were 37 record holders of our Class A common stock and 5 record holders of our public warrants, based upon information received from our transfer agent. However, these numbers do not reflect beneficial owners whose shares were held of record by nominees or broker dealers.
Holders As of February 17, 2026, there were 33 record holders of our Class A common stock and 5 record holders of our public warrants, based upon information received from our transfer agent. However, these numbers do not reflect beneficial owners whose shares were held of record by nominees or broker dealers.
Added
Stock Performance Graph The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.
Added
The graph below compares total stockholder return on our common stock from December 31, 2020 through December 31, 2025 with the cumulative total return of the NASDAQ Composite Index and NASDAQ Biotechnology Index, assuming a $100 investment made on December 31, 2020. Each of the measures of cumulative total return assumes reinvestment of dividends, if applicable.
Added
The stock performance shown on the graph below is based on historical data and is not indicative of, or intended to forecast, possible future performance of our common stock. 55 Table of Contents (1) GeneDx Holdings Corp. was incorporated as CM Life Sciences, Inc.
Added
(NASDAQ: CMLS) in 2020 and, upon completion of a business combination in 2021, was renamed Sema4 Holdings Corp. Pursuant to a Certificate of Amendment filed with the State of Delaware on January 6, 2023, the Company changed its name to GeneDx Holdings Corp., (NASDAQ: WGS) effective January 9, 2023. Sale of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

33 edited+19 added−27 removed51 unchanged
Biggest changeWe expect these expenses to decrease as a percentage of revenue in the long term as revenue increases, although the percentage may fluctuate from period to period due to fluctuations in our compensation-related charges. 58 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table sets forth our results of operations for the periods presented (in thousands): Year Ended December 31, 2024 2023 $ Change % Change Revenue Diagnostic test revenue $ 302,157 $ 195,654 $ 106,503 54 % Other revenue 3,293 6,912 (3,619) (52) % Total revenue 305,450 202,566 102,884 51 % Cost of services 111,053 112,560 (1,507) (1) % Gross profit 194,397 90,006 104,391 116 % Research and development 45,722 58,266 (12,544) (22) % Selling and marketing 67,371 60,956 6,415 11 % General and administrative 101,110 133,755 (32,645) (24) % Impairment loss — 10,402 (10,402) (100) % Other operating expenses, net 3,407 7,223 (3,816) (53) % Loss from operations (23,213) (180,596) 157,383 (87) % Non-operating (expenses) income, net Change in fair value of warrants and contingent liabilities (13,370) 1,170 (14,540) NM Interest (expense) income, net (3,032) 1,114 (4,146) NM Other (expense) income, net (13,014) 1,619 (14,633) NM Total non-operating (expense) income, net (29,416) 3,903 (33,319) NM Loss before income taxes (52,629) (176,693) 124,064 (70) % Income tax benefit 343 926 (583) (63) % Net loss $ (52,286) $ (175,767) $ 123,481 (70) % NM – Not Meaningful Revenue Total revenue increased by $102.9 million, or 51%, to $305.5 million for the year ended December 31, 2024, from $202.6 million for the year ended December 31, 2023.
Biggest changeA discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in “ Management's Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 20, 2025. 59 Table of Contents Comparison of the Years Ended December 31, 2025 and 2024 The following table sets forth our results of operations for the periods presented (in thousands): Year Ended December 31, 2025 2024 $ Change % Change Revenue Diagnostic test revenue $ 416,668 $ 302,157 $ 114,511 38 % Other revenue 10,871 3,293 7,578 NM Total revenue 427,539 305,450 122,089 40 % Cost of services 129,366 111,053 18,313 16 % Gross profit 298,173 194,397 103,776 53 % Research and development 72,026 45,722 26,304 58 % Selling and marketing 88,405 67,371 21,034 31 % General and administrative 150,819 104,517 46,302 44 % Loss from operations (13,077) (23,213) 10,136 (44) % Non-operating expenses, net Change in fair value of financial liabilities (1,204) (13,370) 12,166 (91) % Interest expense, net (2,539) (3,032) 493 (16) % Other expense, net (4,317) (13,014) 8,697 (67) % Total non-operating expense, net (8,060) (29,416) 21,356 (73) % Loss before income taxes (21,137) (52,629) 31,492 (60) % Income tax benefit 116 343 (227) (66) % Net loss $ (21,021) $ (52,286) $ 31,265 (60) % NM – Not Meaningful Revenue Total revenue increased by $122.1 million, or 40%, to $427.5 million for the year ended December 31, 2025, from $305.5 million for the year ended December 31, 2024.
Financing Activities Net cash provided by financing activities during the year ended December 31, 2024 was $44.2 million, which included $46.5 million in proceeds from our ATM offering, net of issuance costs, partially offset by $2.7 million of finance lease payments and $0.5 million of principal payments on the DECD loan.
Net cash provided by financing activities during the year ended December 31, 2024 was $44.2 million, which included $46.5 million in proceeds from our prior ATM offering, net of issuance costs, which was partially offset by $2.7 million of finance lease payments and $0.5 million of principal payments on the DECD loan.
Net cash provided by financing activities during the year ended December 31, 2023 was $186.2 million, which was primarily driven by the $143.0 million net proceeds from the underwritten public offering and concurrent registered direct offering, net of issuance costs, and $48.5 million from the term loan facility with Perceptive (the “Perceptive Term Loan Facility”), which was offset partially by the DECD loan payment of $2.0 million and $3.6 million of finance lease payments.
Net cash provided by financing activities during the year ended December 31, 2023 was $186.2 million, which was primarily driven by the $143.0 million net proceeds from the underwritten public offering and concurrent registered direct offering, net of issuance costs, and $48.5 million from the term loan facility with Perceptive (the “Perceptive Term Loan Facility”), which was partially offset by $3.6 million of finance lease payments and $2.0 million of payments on the DECD loan.
While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See the section titled “ Item 1A. Risk Factors ” for more information. Test Volume The principal focus of our commercial operations is to offer our diagnostic tests through both our direct sales force and laboratory distribution partners.
While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See “ Item 1A. Risk Factors ” for more information. Test Volume The principal focus of our commercial operations is to offer our diagnostic tests through both our direct sales force and laboratory distribution partners.
Non-Operating (Expense) Income, Net Non-operating expense, net of $29.4 million for the year ended December 31, 2024 primarily reflected a legal settlement, net of insurance, of $12.8 million, a non-cash charge of $10.1 million associated with the exercise of the Perceptive warrant and a non-cash charge of $3.3 million to account for the increase in fair value of our warrant liabilities.
Non-operating expense, net of $29.4 million for the year ended December 31, 2024 primarily reflected a legal settlement, net of insurance, of $12.8 million, a non-cash charge of $10.1 million associated with the exercise of the Perceptive warrant and a non-cash charge of $3.3 million to account for the increase in fair value of our financial liabilities.
If we fail to expand and maintain broad adoption of, and coverage and reimbursement for, our tests, our ability to generate revenue and our future business prospects may be adversely affected. 56 Table of Contents Ability to Lower the Costs Associated with Performing our Tests Reducing the costs associated with performing our diagnostic tests is both our focus and a strategic objective.
If we fail to expand and maintain broad adoption of, and coverage and reimbursement for, our tests, our ability to generate revenue and our future business prospects may be adversely affected. 57 Table of Contents Ability to Lower the Costs Associated with Performing our Tests Reducing the costs associated with performing our diagnostic tests is both our focus and a strategic objective.
Investors are encouraged to 60 Table of Contents review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
If actual results in the future vary from our estimates, we will adjust these estimates, which could affect revenue and earnings in the period such variances become known. 64 Table of Contents Other Revenue We also recognize revenue from collaboration service agreements with biopharma companies and other third parties pursuant to which we health information and patient identification support services.
If actual results in the future vary from our estimates, we will adjust these estimates, which could affect revenue and earnings in the period such variances become known. Other Revenue We also recognize revenue from collaboration service agreements with biopharma companies and other third parties pursuant to which we provide health information and patient identification support services.
For orders received for self-pay patients, we determine a transaction price associated with services rendered in consideration of implicit price concessions that are granted to such orders.
For 64 Table of Contents orders received for self-pay patients, we determine a transaction price associated with services rendered in consideration of implicit price concessions that are granted to such orders.
Net cash used in investing activities during the year ended December 31, 2023 was $43.7 million, which included purchases of marketable securities of $47.7 million, $12.1 million in consideration held in escrow paid for the Acquisition and $5.3 million in purchases of property and equipment, which was offset partially by $17.8 million in proceeds from maturities of marketable securities and $4.0 million in proceeds from the sale of assets.
Net cash used in investing activities during the year ended December 31, 2023 was $43.7 million, which included net marketable securities activity of $29.9 million, purchases of property and equipment of $5.3 million, and $12.1 million in consideration held in escrow paid for the Acquisition, which was partially offset by $4.0 million of proceeds from the sale of assets.
During the year ended December 31, 2024, we resulted 74,547 exome and genome tests, which represented 33% of all test results, compared to the year ended December 31, 2023, in which we resulted 49,439 exome and genome tests, which represented 22% of all test results.
During the year ended December 31, 2025, we resulted 97,271 exome and genome tests, which represented 43% of all test results, compared to the years ended December 31, 2024 and 2023, in which we resulted 74,547 and 49,439 exome and genome tests, which represented 33% and 22%, respectively, of all test results.
We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
We define adjusted gross margin as our adjusted gross profit divided by our revenue. We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
Overview See Note 1, “ Organization and Description of Business ” included within this Annual Report for further information. Factors Affecting Our Operating Performance We believe several important factors have impacted, and will continue to impact, our performance and results of operations.
Overview See Note 1, “ Organization and Description of Business ” to our consolidated financial statements for further information. Factors Affecting Our Operating Performance We believe several important factors have impacted, and will continue to impact, our performance and results of operations.
As discussed in the notes to our consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle for $42.0 million claims related to coverage and billing matters allegedly resulting in overpayments by the 62 Table of Contents payor to Legacy Sema4.
As discussed in the notes to our consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle for $42.0 million claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of December 31, 2025, remaining payments due to the payor were $2.0 million.
Other limitations include that non-GAAP financial measures do not reflect: • all expenditures or future requirements for capital expenditures or contractual commitments; • changes in our working capital needs; • the costs of replacing the assets being depreciated, which will often have to be replaced in the future; • the non-cash component of employee compensation expense; and • the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations.
Other limitations include that non-GAAP financial measures do not reflect: • all expenditures or future requirements for capital expenditures or contractual commitments; • changes in our working capital needs; • the costs of replacing the assets being depreciated, which will often have to be replaced in the future; • the non-cash component of employee compensation expense; and • the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations. 61 Table of Contents Adjusted Gross Profit and Adjusted Gross Margin Adjusted gross profit is a non-GAAP financial measure that we define as revenue less cost of services, excluding depreciation and amortization expense, stock-based compensation expense and restructuring costs.
The following is a reconciliation of revenue to our adjusted gross profit and adjusted gross margin for the years ended December 31, 2024 and 2023 (in thousands) : Year Ended December 31, 2024 2023 Revenue $ 305,450 $ 202,566 Cost of services 111,053 112,560 Gross profit 194,397 90,006 Gross margin 64 % 44 % Add: Depreciation and amortization expense $ 4,047 $ 4,350 Stock-based compensation expense 431 (1,217) Restructuring expense 54 139 Adjusted gross profit $ 198,929 $ 93,278 Adjusted gross margin 65 % 46 % Adjusted Net Income (Loss) Adjusted net income (loss) is a non-GAAP financial measure that we define as net income (loss) adjusted for depreciation and amortization, stock-based compensation expenses, impairment loss, restructuring and business exit related charges, change in fair market value of financial liabilities, transaction costs and other (income) expense, net.
The following is a reconciliation of revenue to our adjusted gross profit and adjusted gross margin for the years ended December 31, 2025, 2024, and 2023 : Year Ended December 31, 2025 2024 2023 Revenue $ 427,539 $ 305,450 $ 202,566 Cost of services 129,366 111,053 112,560 Gross profit 298,173 194,397 90,006 Gross margin 69.7 % 63.6 % 44.4 % Add: Depreciation and amortization expense $ 5,369 $ 4,047 $ 4,350 Stock-based compensation expense 791 431 (1,217) Restructuring costs 5 54 139 Adjusted gross profit $ 304,338 $ 198,929 $ 93,278 Adjusted gross margin 71.2 % 65.1 % 46.0 % Adjusted Net Income (Loss) Adjusted net income (loss) is a non-GAAP financial measure that we define as net income adjusted for depreciation and amortization, stock-based compensation expenses, restructuring costs, impairment loss, change in fair value of financial liabilities, interest expense (income), net, income tax expense (benefit), net, and other (income) expense, net.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Recent Accounting Pronouncements Information on recent accounting pronouncements can be found in Note 2, “ Summary of Significant Accounting Policies ” to our consolidated financial statements. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Net interest income for the year ended December 31, 2023 was $1.1 million. See Note 4, “ Fair Value Measurement ”, Note 8, “ Long-Term Debt ” and Note 10, “ Purchase Commitments and Contingencies ” to our consolidated financial statements for further information.
Net interest expense for the year ended December 31, 2024 was $3.0 million. See Note 5, “ Fair Value Measurement ”, Note 9, “ Long-Term Debt ” and Note 11, “ Purchase Commitments and Contingencies ” to our consolidated financial statements for further information.
Net cash used in operating activities during the year ended December 31, 2023 was $180.1 million, which was primarily attributable to a net loss of $175.8 million and unfavorable working capital associated with the wind down of the Legacy Sema4 accounts payable, primarily during the second half of 2023, which was partially offset by the release of a third-party payor reserve.
Net cash used in operating activities during the year ended December 31, 2023 was $180.1 million, which was primarily attributable to a net loss of $175.8 million and unfavorable working capital associated with the wind down of the Legacy Sema4 accounts payable, primarily during the second half of 2023, which was partially offset by the release of a third-party payor reserve. 63 Table of Contents Investing Activities Net cash used in investing activities during the year ended December 31, 2025 was $61.5 million, which included $32.9 million for the acquisition of Fabric Genomics, purchases of property and equipment of $19.0 million, and net marketable securities activity of $9.6 million.
Cash Flows Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities $ (28,496) $ (180,147) Net cash used in investing activities (30,132) (43,726) Net cash provided by financing activities 44,162 186,238 Operating Activities Net cash used in operating activities during the year ended December 31, 2024 was $28.5 million, driven by lower cash expenditures in the current year as compared with the prior year, which reflected improved gross margin profitability, as well as the realization of cost savings from the exited Legacy Sema4 business and previously executed cost reduction initiatives.
Net cash used in operating activities during the year ended December 31, 2024 was $28.5 million, driven by lower cash expenditures in the current year period net loss as compared with the prior year period, which reflected improved gross margin profitability, as well as the realization of cost savings from the exited Legacy Sema4 business and other cost reduction initiatives.
Investing Activities Net cash used in investing activities during the year ended December 31, 2024 was $30.1 million which included purchases of marketable securities of $66.3 million and $5.5 million in purchases of property and equipment, partially offset by $41.7 million in proceeds from the sales and maturities of marketable securities.
Net cash used in investing activities during the year ended December 31, 2024 was $30.1 million which included net marketable securities activity of $24.6 million and purchases of property and equipment of $5.5 million.
Cost of Services The cost of services reflect the aggregate costs incurred in performing services, which include expenses for reagents and laboratory supplies, compensation expenses for employees directly involved in revenue generating activities, shipping and handling fees, costs of third-party reference lab testing and phlebotomy services, if any, and allocated genetic counseling, facility 57 Table of Contents and information technology costs associated with delivery services.
Our ability to increase this revenue will depend on our ability to expand our customer base among hospitals and genomic centers, along with increased adoption of whole genome sequencing and AI-enabled interpretation in clinical workflows. 58 Table of Contents Cost of Services The cost of services reflect the aggregate costs incurred in performing services, which include expenses for reagents and laboratory supplies, compensation expenses for employees directly involved in revenue generating activities, shipping and handling fees, costs of third-party reference lab testing and phlebotomy services, if any, and allocated genetic counseling, facility and information technology costs associated with delivery services.
Research and development costs are generally expensed as incurred and certain non-refundable advanced payments provided to our research partners are expensed as the related activities are performed. We generally expect our research and development expenses to continue to increase in absolute dollars as we innovate and expand the application of our platforms.
We generally expect our research and development expenses to continue to increase in absolute dollars as we innovate and expand the application of our platforms.
Gross Profit Gross profit increased by $104.4 million for the year ended December 31, 2024, driven by a combination of a favorable shift in volume mix to higher margin whole exome and genome tests, an improvement in exome average reimbursement rates and continued cost per test leverage. 59 Table of Contents Research and Development Research and development expenses decreased by $12.5 million, or 22%, to $45.7 million for the year ended December 31, 2024, from $58.3 million for the year ended December 31, 2023.
Gross Profit Gross profit increased by $103.8 million for the year ended December 31, 2025, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.
We anticipate fulfilling such commitments with our existing cash and cash equivalents and available-for-sale marketable securities or through additional capital raised to finance our operations. Our future minimum payments under non-cancellable operating lease and finance lease agreements were $62.3 million and $31.9 million, respectively as of December 31, 2024.
Material Cash Requirements for Known Contractual Obligations and Commitments The following is a description of commitments for known and reasonably likely cash requirements as of December 31, 2025. We anticipate fulfilling such commitments with our existing cash and cash equivalents and available-for-sale marketable securities or through additional capital raised to finance our operations.
See Note 10, “ Purchase Commitments and Contingencies ” to our consolidated financial statements for further information. For the year ended December 31, 2023, represents contract termination costs associated with the now discontinued Legacy Sema4 business. Liquidity and Capital Resources As of December 31, 2024 , our existing cash and cash equivalents and available-for-sale marketable securities were $141.2 million.
For the year ended December 31, 2023, represents a gain recognized on the sale of certain assets sold as a result of an auction, principal loan forgiveness under the amendment to the DECD loan, and contract termination costs associated with the now discontinued Legacy Sema4 business. 62 Table of Contents Liquidity and Capital Resources As of December 31, 2025 , our existing cash and cash equivalents and available-for-sale marketable securities were $171.3 million.
Selling and Marketing Selling and marketing expenses increased by $6.4 million, or 11%, to $67.4 million for the year ended December 31, 2024, from $61.0 million for the year ended December 31, 2023.
Research and Development Research and development expenses increased by $26.3 million, or 58%, to $72.0 million for the year ended December 31, 2025, from $45.7 million for the year ended December 31, 2024.
The timing of these future payments, by year, can be found in our consolidated financial statements in Note 10, “ Purchase Commitments and Contingencies ”, included within this Annual Report.
For more information regarding this matter, see Note 4, “ Revenue Recognition ” to our consolidated financial statements. Our future contractual purchase commitments were $35.7 million as of December 31, 2025. The timing of these future payments, by year, can be found in Note 11, “ Purchase Commitments and Contingencies ” to our consolidated financial statements.
We believe adjusted net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain factors that may vary from company to company for reasons unrelated to overall operating performance. 61 Table of Contents The following is a reconciliation of our net loss to adjusted net income (loss) for the years ended December 31, 2024 and 2023 (in thousands) : Year Ended December 31, 2024 2023 Net loss $ (52,286) $ (175,767) Depreciation and amortization 21,953 33,734 Stock-based compensation expense 9,138 (326) Impairment loss (1) — 10,402 Restructuring costs (2) 1,752 6,532 Change in fair value of warrants and contingent liabilities (3) 13,370 (1,170) Gain on sale of assets (4) — (1,677) Provision for excess and obsolete inventory associated with Legacy Sema4 — 3,634 Gain on debt forgiveness (5) — (2,750) Other (6) 12,789 1,131 Adjusted net income (loss) $ 6,716 $ (126,257) __________________ (1) Represents the impairment of certain capital and right-of-use asset leases.
The following is a reconciliation of our net loss to adjusted net income (loss) for the years ended December 31, 2025, 2024, and 2023 : Year Ended December 31, 2025 2024 2023 Net loss $ (21,021) $ (52,286) $ (175,767) Depreciation and amortization 25,224 21,953 — 33,734 Stock-based compensation expense 32,162 9,138 — (326) Restructuring costs 1,275 1,752 — 6,532 Impairment loss (1) — — 10,402 Change in fair value of financial liabilities 1,204 13,370 (1,170) Interest expense (income), net 2,539 3,032 (1,114) Income tax benefit (116) (343) (926) Other (2) 542 12,789 338 Adjusted net income (loss) $ 41,809 $ 9,405 $ (128,297) (1) Represents the impairment of certain capital and right-of-use asset leases.
Diagnostic test revenue increased by $106.5 million, or 54%, to $302.2 million for the year ended December 31, 2024, from $195.7 million for the year ended December 31, 2023.
Diagnostic test revenue increased by $114.5 million, or 38%, to $416.7 million for the year ended December 31, 2025, from $302.2 million for the year ended December 31, 2024. The increase was attributable to a $126.8 million increase in exome and genome sequencing revenues driven by a 30% increase in test volumes and an 18% increase in average reimbursement rates.
The timing of these future payments, by year, can be found in our consolidated financial statements in Note 9, “ Leases ”, included within this Annual Report.
Our future minimum payments under non-cancellable operating lease and finance lease agreements were $57.2 million and $29.2 million, respectively as of December 31, 2025. The timing of these future payments, by year, can be found in Note 10, “ Leases ” to our consolidated financial statements.
Further, we have entered into a sales agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) pursuant to which we may, but are not obligated to, offer and sell, from time to time, shares of our Class A common stock with an aggregate offering price up to $75.0 million through TD Cowen, as sales agent, subject to the terms and conditions described in the Sales Agreement and SEC rules and regulations (our “ATM offering”).
In October 2025, we filed an automatic universal shelf registration statement that provides for the sale of our Class A common stock and other securities, and up to an aggregate of $100.0 million of our Class A common stock that may be issued from time to time under a Sales Agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”).
Non-operating income, net of $3.9 million for the year ended December 31, 2023, primarily reflected non-cash benefits of $1.2 million to account for the decrease in fair value of our warrants and contingent liabilities and $2.8 million for a principal loan forgiveness under the amendment to the Connecticut Department of Economic and Community Development (“DECD”) loan, partially offset by $1.0 million in contract termination costs associated with the now discontinued Legacy Sema4 business.
Non-Operating Expense, Net Non-operating expense, net of $8.1 million for the year ended December 31, 2025 primarily reflected a legal settlement of $4.8 million and a non-cash charge of $1.2 million to account for the increase in fair value of our financial liabilities. Net interest expense for the year ended December 31, 2025 was $2.5 million.
Removed
Our ability to increase our revenue will depend on our ability to enter into contracts with third-party partners.
Added
Our ability to increase our revenue will depend on our ability to enter into contracts with third-party partners. In addition, with the acquisition of Fabric Genomics, we generate revenues through software and interpretation services related to rare disease, hereditary risk, and cancer testing. Our customers include clinical laboratories, hospitals, and research institutions.
Removed
The increase was attributable to a $109.2 million increase in exome and genome test revenue and an increase in other panel revenue of $5.0 million, which was partially offset by a $2.7 million decrease in hereditary cancer test revenue and a $5.0 million decrease in legacy Sema4 revenues.
Added
We expect these expenses to decrease as a percentage of revenue in the long term as revenue increases, although the percentage may fluctuate from period to period due to fluctuations in our compensation-related charges.
Removed
The increase in exome and genome revenue was driven by a 51% increase in test volume coupled with higher reimbursement rates resulting from lower denial rates and improved collections. Full year and fourth quarter 2024 revenues includes $6.8 million of discrete benefit in connection with a multi-year appeal recovery from a single third-party payor.
Added
Results of Operations A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
Removed
The fourth quarter benefit is composed of $5.8 million to exome genome revenues and $1.0 million to other test lines. Other revenue, representing revenue from biopharma and/or data partnership, decreased by $3.6 million, or 52%, to $3.3 million for the year ended December 31, 2024, from $6.9 million for the year ended December 31, 2023.
Added
This increase was partially offset by lower revenue from non‑core hereditary cancer tests, which were phased out by the end of 2025. Other revenue increased by $7.6 million, to $10.9 million for the year ended December 31, 2025, from $3.3 million for the year ended December 31, 2024.
Removed
The decrease reflected lower revenue from a partnership program which ended in 2024.
Added
The increase reflects $3.4 million of non-testing revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs.
Removed
The decrease was primarily attributable to costs incurred in the prior year from the now discontinued Legacy Sema4 business, which included restructuring costs associated with headcount reduction actions and accelerated amortization for capitalized software no longer in use.
Added
The increase was primarily attributable to compensation related costs of $24.3 million, which reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics. 60 Table of Contents Selling and Marketing Selling and marketing expenses increased by $21.0 million, or 31%, to $88.4 million for the year ended December 31, 2025, from $67.4 million for the year ended December 31, 2024.
Removed
The increase reflects our investment to support growth in our commercial team as well as incremental variable billing and selling cost General and Administrative General and administrative expenses decreased by $32.6 million, or 24%, to $101.1 million for the year ended December 31, 2024, from $133.8 million for the year ended December 31, 2023 .
Added
The increase was primarily attributable to higher compensation related costs of $16.5 million, which reflects our investment to support growth in our commercial team, as well as the inclusion of selling and marketing costs of Fabric Genomics.
Removed
The decrease was attributable to lower current period expenses related to professional services, software and information technology related costs, insurance costs, fixed asset depreciation and personnel-related costs from the now discontinued Legacy Sema4 business. Impairment Loss The non-cash charge of $10.4 million for the year ended December 31, 2023 reflected the impairment of certain capital and right-of-use asset leases.
Added
General and Administrative General and administrative expenses increased by $46.3 million, or 44%, to $150.8 million for the year ended December 31, 2025, from $104.5 million for the year ended December 31, 2024 .
Removed
See Note 5, “ Property and Equipment, net ” to our consolidated financial statements for further information. Other Operating Expenses, Net Other operating expenses, net were $3.4 million for the year ended December 31, 2024, reflecting related party expenses.
Added
The increase was primarily attributable to increased compensation related costs of $33.0 million, higher legal, compliance and consultant related costs of $9.5 million, higher IT software and infrastructure costs of $6.1 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting. These increases were partially offset by a one-time sales-and-use tax refund of $8.4 million.
Removed
Other operating expenses, net were $7.2 million for the year ended December 31, 2023 and included related party expenses of $5.3 million and a non-cash charge of $3.6 million to reserve for obsolete Legacy Sema4 inventory, partially offset by a gain of $1.7 million to recognize the sale of certain assets of Legacy Sema4.
Added
We believe adjusted net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain factors that may vary from company to company for reasons unrelated to overall operating performance.
Removed
Net interest expense for the year ended December 31, 2024 was $3.0 million.
Added
(2) For the year ended December 31, 2025, represents transaction costs associated with the Merger Agreement, a reserve for a certain litigation matter and a sales-and-use tax refund. For the year ended December 31, 2024, represents reserves net of insurance for a certain litigation matter.
Removed
Adjusted Gross Profit and Adjusted Gross Margin Adjusted gross profit is a non-GAAP financial measure that we define as revenue less cost of services, excluding depreciation and amortization expense, stock-based compensation expense and restructuring costs. We define adjusted gross margin as our adjusted gross profit divided by our revenue.
Added
The Sales Agreement was implemented following the use in full of a prior sales agreement for up to $75.0 million of Class A common stock with TD Cowen. As of December 31, 2025, approximately $78.2 million of capacity remained available under this Sales Agreement.
Removed
(2) Represents costs incurred for restructuring activities, which include severance, and in the prior period, third-party consulting costs. (3) Represents the change in fair market value of the liabilities associated with our public warrants, private placement warrants, Perceptive warrants and the earn-out shares.
Added
Cash Flows Year Ended December 31, 2025 2024 2023 Net cash provided by (used in) operating activities $ 33,279 $ (28,496) $ (180,147) Net cash used in investing activities (61,517) (30,132) (43,726) Net cash provided by financing activities 48,025 44,162 186,238 Operating Activities Net cash provided by operating activities during the year ended December 31, 2025 was $33.3 million, driven by improved gross margin profitability in the current year and favorable net working capital attributable to the timing of collections and payments associated with operating assets and liabilities.
Removed
(4) Represents a prior year gain recognized on the sale of certain assets sold as a result of an auction. (5) Represents principal loan forgiveness under the amendment to the DECD loan. (6) For the year ended December 31, 2024, represents a legal settlement for a certain litigation matter.
Added
Financing Activities Net cash provided by financing activities during the year ended December 31, 2025 was $48.0 million, which primarily reflected proceeds from our prior at-the-market offering (“prior ATM offering”) of $46.7 million, net of issuance costs.
Removed
We have an effective shelf registration statement that we filed with the SEC in August of 2022, registering $300 million of shares of our Class A common stock and other securities. As of December 31, 2024, approximately $102 million of securities remained available under this registration statement.
Added
For Fabric Genomics, Other Revenue consists of clinical services billed directly to institutions, including virtual care, AI-enabled patient engagement, and genomic analysis services. Revenue is recognized when performance obligations are satisfied and collection is reasonably assured. Business Combinations We account for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations.
Removed
As of December 31, 2024, approximately $26.8 million of capacity remained available under this ATM offering. Material Cash Requirements for Known Contractual Obligations and Commitments The following is a description of commitments for known and reasonably likely cash requirements as of December 31, 2024 and December 31, 2023.
Added
The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill.
Removed
As of December 31, 2024, remaining payments due to the payor were $12.0 million. For more information regarding this matter, see Note 3, “ Revenue Recognition ” included within this Annual Report. Our future contractual purchase commitments were $37.6 million as of December 31, 2024.
Added
The estimated fair value of identifiable intangible assets acquired in a business combination is based on third-party valuations that use information and assumptions provided by the Company’s management, which consider estimates of inputs and assumptions that a market participant would use.
Removed
Recent Accounting Pronouncements Information on recent accounting pronouncements can be found in Note 2, “ Summary of Significant Accounting Policies ”.
Added
Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill.
Removed
Filer Status Loss of Smaller Reporting Company Status As the market value of our shares of Class A common stock held by non-affiliates was between $250.0 million and $700.0 million as of June 28, 2024 (the last business day of our most recently completed second fiscal quarter) and our revenue for the year ended December 31, 2023 was more than $100.0 million, we continue to be deemed an accelerated filer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2024.
Added
The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rate, estimated cost savings, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods.
Removed
However, we are no longer a “smaller 63 Table of Contents reporting company” and will no longer be eligible to rely on the scaled disclosure exemptions available to smaller reporting companies starting with our first Quarterly Report on Form 10-Q in 2025.
Removed
JOBS Act Accounting Election We are an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act (the “JOBS Act”). The JOBS Act allows an emerging growth company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
Removed
We have elected to use this extended transition period and, as a result, our financial statements may not be comparable to companies that comply with public company effective dates. We also intend to rely on other exemptions provided by the JOBS Act, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
Removed
We will remain an emerging growth company until the earliest of (1) September 1, 2025, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Class A common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Removed
Certain of these contracts provide non-refundable upfront payments, which we record as contract liabilities, and variable payments based upon the achievement of certain milestones during the contract term.
Removed
Milestone payments are a form of variable consideration that are included in the transaction price only when it is probable that doing so will not result in a significant reversal of cumulative revenue recognized when the uncertainty associated with the milestone is subsequently resolved.
Removed
For certain service or collaboration contracts that require us to transfer control of the service over time, we recognize revenue over time using an input measure based on costs incurred on the basis that this measure best reflects the pattern of transfer of control of the services to the customer.
Removed
The measure of progress is developed using our best estimate of the performance period and the anticipated costs to be incurred to perform such services, including any subcontracted service costs.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed3 unchanged
Biggest changeSee Note 8, “ Long-Term Debt ” to our consolidated financial statements for further information.
Biggest changeA 100-basis point change in interest rates would not have a material effect on the total future interest payments. See Note 9, “ Long-Term Debt ” to our consolidated financial statements for further information.
Our cash, cash equivalents, available-for-sale marketable securities and restricted cash consists of bank deposits and money market funds, which totaled $142.2 million and $131.1 million at December 31, 2024 and 2023, respectively. Such interest-bearing instruments carry a degree of risk.
Our cash, cash equivalents, available-for-sale marketable securities and restricted cash consists of bank deposits and money market funds, which totaled $172.3 million and $142.2 million at December 31, 2025 and 2024, respectively. Such interest-bearing instruments carry a degree of risk.

Other WGS 10-K year-over-year comparisons