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What changed in EXACT SCIENCES CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of EXACT SCIENCES 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.

+415 added−353 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-19)

Top changes in EXACT SCIENCES CORP's 2025 10-K

415 paragraphs added · 353 removed · 272 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

88 edited+38 added−30 removed94 unchanged
Biggest changeDuring 2024, we achieved many milestones, including: • delivering more than 4.6 million results to patients with our portfolio of cancer tests, • being recognized as a Great Place to Work for the sixth consecutive year, • growing revenue 10% while controllable operating expenses grew just 3%, • generating cash provided by operating activities of $210.5 million for the year ended December 31, 2024, an improvement of $54.4 million, respectively, compared to the year ended December 31, 2023, • securing United States (“U.S.”) Food and Drug Administration (“FDA”) approval and Medicare pricing for Cologuard Plus TM , our next-generation colon cancer screening test, • completing two studies for Oncodetect TM , our molecular residual disease test (“MRD”), and • generating evidence for our liquid biopsy colon cancer screening test as well as our multi-cancer screening test (“MCED”), Cancerguard TM .
Biggest changeDuring 2025, we achieved many milestones, including: • delivering more than 5.5 million results to patients with our portfolio of cancer tests, • being recognized as a Great Place to Work for the seventh consecutive year, • growing revenue 18% while decreasing operating expenses as a percentage of revenue, • generating cash provided by operating activities of $491.4 million for the year ended December 31, 2025, an improvement of $280.9 million, respectively, compared to the year ended December 31, 2024, • launching Cologuard Plus TM , our next-generation Cologuard test, Oncodetect ® , our molecular residual disease (“MRD”) test, and Cancerguard ® , the first commercially available multi-cancer early detection (“MCED”) blood test analyzing multiple biomarker classes, • obtaining Medicare reimbursement for our Oncodetect test, through the Molecular Diagnostics Services Program (“MolDX”) effective April 2025 for serial use in patients with stage II, III, and resectable stage IV colorectal cancer in the adjuvant and recurrence monitoring settings over a five-year period, • entered into an exclusive license agreement with Freenome Holdings, Inc.
In addition to the evidence supporting Oncodetect in colorectal cancer, we plan to validate our Oncodetect test in breast cancer and, subsequently, in multiple other solid tumor types.
In addition to the evidence supporting our Oncodetect test in colorectal cancer, we plan to validate our Oncodetect test in breast cancer and, subsequently, in multiple other solid tumor types.
We do not offer our Cologuard test, Cancerguard test, or Oncodetect test outside of the U.S. We are exploring opportunities to make these tests and other future products available outside of the U.S. Inclusion of our products in guidelines and quality measures will be critical to our international success.
We do not offer our Cologuard tests, Cancerguard test, or Oncodetect test outside of the U.S. We are exploring opportunities to make these tests and other future products available outside of the U.S. Inclusion of our products in guidelines and quality measures will be critical to our international success.
Through our collaboration with Mayo, we have successfully performed feasibility studies involving multiple types of cancer using tissue, blood, and other sample types. Our research and development programs are also powered by technologies we have exclusively licensed from JHU, Broad Institute, Inc. (“Broad Institute”), Oxford University, the Ludwig Institute for Cancer Research, and TwinStrand Biosciences, Inc. (“TwinStrand”).
Through our collaboration with Mayo, we have successfully performed feasibility studies involving multiple types of cancer using tissue, blood, and other sample types. Our research and development programs are also powered by technologies we have exclusively licensed from JHU, Broad Institute, Inc. (“Broad Institute”), Oxford University, the Ludwig Institute for Cancer Research, TwinStrand Biosciences, Inc. (“TwinStrand”), and Freenome.
Our total lab capacity at both facilities is approximately seven million Cologuard tests per year, with the opportunity to add additional capacity, if needed. We currently manufacture our Cologuard and Cologuard Plus tests at our facilities in Madison, Wisconsin. We are committed to manufacturing and providing medical devices and related products that meet customer expectations and applicable regulatory requirements.
Our total lab capacity at both facilities is approximately seven million Cologuard tests per year, with the opportunity to add additional capacity, if needed. We currently manufacture our Cologuard, Cologuard Plus, and Cancerguard tests at our facilities in Madison, Wisconsin. We are committed to manufacturing and providing medical devices and related products that meet customer expectations and applicable regulatory requirements.
The Sunshine Act requires manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS any payments or other transfers of value made to healthcare providers and teaching hospitals, unless an exception applies. Manufacturers must also disclose to CMS any healthcare provider ownership or investment interests.
The Sunshine Act requires manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS any payments or other transfers of value made to certain healthcare providers and teaching hospitals, unless an exception applies. Manufacturers must also disclose to CMS any healthcare provider ownership or investment interests.
Our sales team actively engages with healthcare providers and payers to emphasize the need for colorectal cancer screening, educate them on the value of our Cologuard test, and facilitate their ability to order the test. We focus on specific healthcare providers and payers based on a combination of Cologuard order history and ordering potential data.
Our sales team actively engages with healthcare providers and payers to emphasize the need for colorectal cancer screening, educate them on the value of our Cologuard tests, and facilitate their ability to order the test. We focus on specific healthcare providers and payers based on a combination of order history and ordering potential data.
To obtain coverage under the MolDX program, developers of molecular diagnostic tests must submit a detailed dossier of analytical and clinical data to substantiate that a test meets Medicare’s requirements for coverage. We have received positive coverage decisions under the MolDX program for our breast, colon, Riskguard, and OncoExTra tests.
To obtain coverage under the MolDX program, developers of molecular diagnostic tests must submit a detailed dossier of analytical and clinical data to substantiate that a test meets Medicare’s requirements for coverage. We have received positive coverage decisions under the MolDX program for our breast, colon, Oncodetect, Riskguard, and OncoExTra tests.
We adhere to manufacturing and safety standards required by federal, state, and local laws and regulations and operate our manufacturing facilities under a quality management system. We purchase certain components for our Cologuard and Cologuard Plus tests from third-party suppliers and manufacturers.
We adhere to manufacturing and safety standards required by federal, state, and local laws and regulations and operate our manufacturing facilities under a quality management system. We purchase certain components for our Cologuard, Cologuard Plus, and Cancerguard tests from third-party suppliers and manufacturers.
The ACS recommends colorectal cancer screening beginning at age 45 for people at average risk of colorectal cancer. • The National Comprehensive Cancer Network (“NCCN”) includes sDNA screening at a once-every-three-years interval in its Colorectal Cancer Screening Guidelines. • The National Committee for Quality Assurance (“NCQA”) includes sDNA testing on a three-year interval as one of the methods permitted for colorectal cancer screening in its most recent Healthcare Effectiveness Data and Information Set (“HEDIS”) quality measures. • The Centers for Medicare & Medicaid Services (“CMS”) includes our Cologuard test in its most recent Medicare Advantage Star Ratings program.
The ACS recommends colorectal cancer screening beginning at age 45 for people at average risk of colorectal cancer. • The National Comprehensive Cancer Network (“NCCN”) includes sDNA screening at a once-every-three-years interval in its Colorectal Cancer Screening Guidelines. • The National Committee for Quality Assurance (“NCQA”) includes sDNA testing on a three-year interval as one of the methods permitted for colorectal cancer screening in its most recent Healthcare Effectiveness Data and Information Set (“HEDIS”) quality measures. • The Centers for Medicare & Medicaid Services (“CMS”) includes our Cologuard and Cologuard Plus tests in its most recent Medicare Advantage Star Ratings program.
Our clinical laboratory facilities are subject to oversight by CMS pursuant to CLIA, as well as agencies in various states, including New York. We are subject to many other federal, state, and foreign laws, including anti-fraud and abuse, anti-kickback, and patient privacy.
Our clinical laboratory facilities are subject to oversight by CMS pursuant to CLIA, as well as agencies in various states, including New York. We are subject to many other federal, state, and foreign laws, including those related to anti-fraud and abuse, anti-kickback, and patient privacy.
With an extensive panel of approximately 20,000 genes and 169 introns, the OncoExTra test is one of the most comprehensive genomic (DNA) and transcriptomic (RNA) panels available today. Riskguard ® Test Riskguard, our hereditary cancer test, helps people understand their inherited risk of cancer, arming them with critical information to make more informed treatment decisions.
With an extensive panel of approximately 20,000 genes and 169 introns, the OncoExTra test is one of the most comprehensive genomic (DNA) and transcriptomic (RNA) panels available today. 7 Table of Contents Riskguard ® Test Riskguard, our hereditary cancer test, helps people understand their inherited risk of cancer, arming them with critical information to make more informed treatment decisions.
In the future, we plan to begin recruiting patients for the FDA registrational Study of All comeRs (“SOAR”) trial, which we expect to be one of the largest prospective, interventional multi-cancer screening trial ever conducted in the U.S. 7 Table of Contents Research and development, which includes our clinical study programs, accounts for a material portion of our operating expenses.
In the future, we plan to begin recruiting patients for the FDA registrational Study of All comeRs (“SOAR”) trial, which we expect to be one of the largest prospective, interventional multi-cancer screening trial ever conducted in the U.S. Research and development, which includes our clinical study programs, accounts for a material portion of our operating expenses.
Reimbursement of our precision oncology tests by third-party payers is essential to our commercial success. Where there is a payer policy, contract or agreement in place, we bill the third-party payer, the hospital or referring laboratory and/or the patient (for deductibles and coinsurance or co-payments, where applicable) in accordance with established policy, contract or 9 Table of Contents agreement terms.
Reimbursement of our precision oncology tests by third-party payers is essential to our commercial success. Where there is a payer policy, contract or agreement in place, we bill the third-party payer, the hospital or referring laboratory and/or the patient (for deductibles and coinsurance or co-payments, where applicable) in accordance with established policy, contract or agreement terms.
Our Oncotype DX breast cancer test is reimbursed for certain patients in the public health systems in more than ten countries. 8 Table of Contents We are exploring opportunities to establish local laboratories in certain locations outside of the U.S. and established local testing capacity in Germany beginning in late 2021.
Our Oncotype DX breast cancer test is reimbursed for certain patients in the public health systems in more than ten countries. We are exploring opportunities to establish local laboratories in certain locations outside of the U.S. and established local testing capacity in Germany beginning in late 2021.
Thanks, in part, to our compelling mission, competitive benefits and the positive results of our diversity and inclusion program, women make up approximately 53% of total employees (full-time and part-time), and 47% of management positions. Our ten-member Board of Directors includes four female members to support diversity of opinion and perspective at the board level.
Thanks, in part, to our compelling mission, competitive benefits and the positive results of our employee inclusion program, women make up approximately 53% of total employees (full-time and part-time), and 47% of management positions. Our nine-member Board of Directors includes four female members to support diversity of opinion and perspective at the board level.
Many state laws are not preempted by HIPAA because they are more stringent or are broader in scope than HIPAA, including the California Consumer 13 Table of Contents Privacy Act of 2018 (“CCPA”), including expansions and amendments to CCPA pursuant to the California Privacy Rights Act which became operative on January 1, 2023.
Many state laws are not preempted by HIPAA because they are more stringent or are broader in scope than HIPAA, including the California Consumer Privacy Act of 2018 (“CCPA”), including expansions and amendments to CCPA pursuant to the California Privacy Rights Act which became operative on January 1, 2023.
Oncotype DX Breast Recurrence Score ® Test Our Oncotype DX Breast Recurrence Score test has been demonstrated to identify patients who are most likely to benefit from chemotherapy as well as those who may receive no clinical benefit from chemotherapy. Among women, breast cancer is the most commonly diagnosed cancer and the leading cause of cancer death.
Oncotype DX Breast Recurrence Score ® Test Our Oncotype DX Breast Recurrence Score test has been demonstrated to identify patients who are most likely to benefit from chemotherapy as well as those who may receive no clinical benefit from chemotherapy. 6 Table of Contents Among women, breast cancer is the most commonly diagnosed cancer and the leading cause of cancer death.
We believe that we currently have sufficient capacity to process all of our tests for at least the next 12 months. We are in the process of expanding our existing facilities to prepare for the expected future growth in our operations. 10 Table of Contents Competition We operate in a rapidly evolving and highly competitive industry.
We believe that we currently have sufficient capacity to process all of our tests for at least the next 12 months. We are in the process of expanding our existing facilities to prepare for the expected future growth in our operations. Competition We operate in a rapidly evolving and highly competitive industry.
Some states have similar transparency laws. International When marketing our tests outside of the U.S., we are subject to other countries' regulatory requirements governing human clinical testing, export of tissue, marketing approval for our products, and performance and reporting of tests in each market.
Some states have similar transparency laws. 15 Table of Contents International When marketing our tests outside of the U.S., we are subject to other countries' regulatory requirements governing human clinical testing, export of tissue, marketing approval for our products, and performance and reporting of tests in each market.
Our Cologuard and Cologuard Plus tests face competition from procedure-based detection technologies such as colonoscopy, flexible sigmoidoscopy, “virtual” colonoscopy—a radiological imaging approach that visualizes the inside of the bowel by CT scan (spiral computerized axial tomography)—as well as other stool-based colorectal cancer tests (including the fecal occult blood test, the fecal immunochemical test (“FIT”)), capsule endoscopy, and liquid biopsy tests.
Our Cologuard and Cologuard Plus tests face competition from procedure-based detection technologies such as colonoscopy, flexible sigmoidoscopy, “virtual” colonoscopy—a radiological imaging approach that visualizes the inside of the bowel by CT scan (spiral computerized axial tomography)—as well as other stool-based colorectal cancer tests (including the fecal occult blood test, the fecal immunochemical test (“FIT”)), and capsule endoscopy. Geneoscopy, Inc.
We perform activities that may implicate HIPAA, such as providing clinical laboratory testing services and entering into specific kinds of relationships with Covered Entities and business associates of Covered Entities. Penalties for violations of HIPAA include civil money and criminal penalties.
We perform activities that implicate HIPAA, such as providing clinical laboratory testing services as a Covered Entity and entering into specific kinds of relationships with Covered Entities and business associates of Covered Entities. Penalties for violations of HIPAA include civil money and criminal penalties.
Additional Part B cost sharing for procedures performed in addition to follow-on colonoscopy (e.g. polyp removal or pathology) will be phased out by 2030. • We believe that most states' laws mandate coverage of our Cologuard test by certain health insurance plans.
Additional Part B cost sharing for procedures performed in addition to follow-on colonoscopy (e.g. polyp removal or pathology) will be phased out by 2030. • We believe that most states' laws mandate coverage of our Cologuard and Cologuard Plus tests by certain health insurance plans.
In addition, it is illegal for a company that reports to the Securities and 15 Table of Contents Exchange Commission (“SEC”) to have false or inaccurate books or records or to fail to maintain a system of internal accounting controls.
In addition, it is illegal for a company that reports to the Securities and Exchange Commission (“SEC”) to have false or inaccurate books or records or to fail to maintain a system of internal accounting controls.
Our issued U.S. patents expire at various times between 2025 and 2044. In addition, we have pending patent applications in the U.S. and in other countries, including provisional and non-provisional filings. Some of these U.S. patent applications also have corresponding pending or granted applications under the Patent Cooperation Treaty in Canada, Europe, Japan, Australia, and other jurisdictions.
Our issued U.S. patents expire at various times between 2026 and 2045. In addition, we have pending patent applications in the U.S. and in other countries, including provisional and non-provisional filings. Some of these U.S. patent applications also have corresponding pending or granted applications under the Patent Cooperation Treaty in Canada, Europe, Japan, Australia, and other jurisdictions.
Our Clinical Laboratory and Manufacturing Facilities We process our Cologuard test at two state-of-the-art, high-throughput clinical laboratories in Madison, Wisconsin that are certified pursuant to federal Clinical Laboratory Improvement Amendments (“CLIA”) and accredited by College of American Pathologist (“CAP”).
Our Clinical Laboratory and Manufacturing Facilities We process our Cologuard, Cologuard Plus, and Cancerguard tests at two state-of-the-art, high-throughput clinical laboratories in Madison, Wisconsin that are certified pursuant to federal Clinical Laboratory Improvement Amendments (“CLIA”) and accredited by College of American Pathologist (“CAP”).
Cologuard Test Commercial Operations We promote our Cologuard test through a national and market-based model comprised of our health systems, payers, primary care, market development, and inside sales team members.
Screening Test Commercial Operations We promote our Cologuard and Cologuard Plus tests through a national and market-based model comprised of our health systems, payers, primary care, market development, and inside sales team members.
To enable our eligible employees to take the time they need to re-energize and focus on what matters most, we offer a parental leave program and ample time away benefits (vacation, sick, holidays, volunteer time, voting time, other leaves).
To enable our eligible employees to take the time they 18 Table of Contents need to re-energize and focus on what matters most, we offer a parental leave program and ample time away benefits (vacation, sick, holidays, volunteer time, voting time, other leaves).
Building on decades of research with Mayo Foundation for Medical Education and Research (“Mayo”) and The Johns Hopkins University (“JHU”), the Cancerguard test combines multiple biomarker classes for earlier cancer detection, provides high specificity to help minimize false positives, and utilizes a streamlined imaging-based diagnostic pathway to reduce follow-up procedures.
Building on decades of research with Mayo and The Johns Hopkins University, the Cancerguard test combines multiple biomarker classes for earlier cancer detection, provides high specificity to help minimize false positives, and utilizes a streamlined imaging-based diagnostic pathway to reduce follow-up procedures.
Reimbursement for our Tests Reimbursement for our Cologuard Test Our Cologuard test has broad reimbursement coverage from Medicare and commercial payers. Updated USPSTF colorectal cancer screening guidelines mandate coverage of our Cologuard test beginning at age 45 for ACA covered health plans.
Reimbursement for our Tests Reimbursement for our Cologuard Tests Our Cologuard tests have broad reimbursement coverage from Medicare and commercial payers. Updated USPSTF colorectal cancer screening guidelines mandate coverage of our Cologuard and Cologuard Plus tests beginning at age 45 for ACA covered health plans.
Collectively, these tests could represent significant competition for our current tests, our own in-development blood-based colorectal cancer screening test, and other tests we may develop in the future. Our competitors may also be developing additional methods of detecting colorectal cancer and pre-cancer that have not yet been announced. We are also entering the MCED market with our Cancerguard test.
Collectively, these tests could represent significant competition for our current tests, our own in-development blood-based colorectal cancer screening test, and other tests we may develop in the future. Our competitors may also be developing additional methods of detecting colorectal cancer and pre-cancer that have not yet been announced.
Our Products and Services With a leading portfolio of products for earlier cancer detection and treatment guidance, we provide patients with earlier, smarter answers. Our current products and services focus on screening and precision oncology tests.
(“Freenome”) for blood-based colorectal cancer screening. Our Products and Services With a leading portfolio of products for earlier cancer detection and treatment guidance, we provide patients with earlier, smarter answers. Our current products and services focus on screening and precision oncology tests.
We also focus on healthcare provider groups and larger regional and national health systems through large, organized screening programs. A critical part of the value proposition of our Cologuard test is its adherence program, which involves active engagement with patients and providers by our adherence team.
We also focus on healthcare provider groups and larger regional and national health systems through large, organized screening programs. 8 Table of Contents A critical part of the value proposition of our Cologuard and Cologuard Plus tests is its adherence program, which involves active engagement with patients and providers by our adherence team.
State Medicaid agencies generally assign a reimbursement rate for our Cologuard test equal to or less than the prevailing Medicare rate, often determined by state law as a percentage of the Medicare reimbursement rate.
State Medicaid agencies generally assign a reimbursement rate for our Cologuard and Cologuard Plus tests equal to or less than the prevailing Medicare rate, often determined by state law as a percentage of the Medicare reimbursement rate.
During fiscal year 2024, our voluntary turnover rate was approximately 8%, below the healthcare industry benchmark, which is comprised of certain of our key competitors (Aon, 2024 Salary Increase and Turnover Study — Second Edition, June 2024). 17 Table of Contents Diversity and Inclusion We believe diversity in thought, experience, perspective, and background within our team is necessary to support our core value of innovation.
During fiscal year 2025, our voluntary turnover rate was approximately 9%, below the healthcare industry benchmark, which is comprised of certain of our key competitors (Aon, 2025 Salary Increase and Turnover Study — Second Edition). Diversity and Inclusion We believe diversity in thought, experience, perspective, and background within our team is necessary to support our core value of innovation.
This process may involve, among other things, successfully completing clinical trials and submitting a premarket clearance notice or filing a premarket approval application with the FDA. 12 Table of Contents Laboratory Developed Tests Our Oncotype ® tests, OncoExTra test, and certain other tests we offer are regulated as LDTs, and we may seek to commercialize certain of our products in development as LDTs.
This process may involve, among other things, successfully completing clinical trials and submitting a premarket clearance notice or filing a premarket approval application with the FDA. Laboratory Developed Tests Our Oncotype DX, Oncodetect, Cancerguard, and OncoExTra tests, and certain other tests we offer are LDTs, and we may seek to commercialize certain of our products in development as LDTs.
Our Screening Tests Cologuard Test Our flagship screening product, the Cologuard test, is a patient-friendly, non-invasive, stool-based DNA (“sDNA”) screening test that utilizes a multi-target approach to detect DNA and hemoglobin biomarkers associated with colorectal cancer and pre-cancer. Eleven biomarkers are targeted that have been shown to be strongly associated with colorectal cancer and pre-cancer.
Our Screening Tests Cologuard and Cologuard Plus Tests Our flagship screening products, the Cologuard and Cologuard Plus tests, are patient-friendly, non-invasive, stool-based DNA (“sDNA”) screening tests that utilize a multi-target approach to detect DNA and hemoglobin biomarkers associated with colorectal cancer and pre-cancer. Biomarkers are targeted that have been shown to be strongly associated with colorectal cancer and pre-cancer.
As of December 31, 2024, we had 257 issued patents in the U.S. and 930 issued patents outside of the U.S., which includes validated patents issued by the European Patent Office in key E.U. countries, covering genes and methods that are components of the Cologuard test, Oncoguard ® Liver test, Oncotype DX tests, pipeline technologies or research methods, and platform technologies.
As of December 31, 2025, we had 274 issued patents in the U.S. and 965 issued patents outside of the U.S., which includes validated patents issued by the European Patent Office in key E.U. countries, covering biomarkers and methods that are components of the Cologuard and Cologuard Plus tests, Oncoguard ® Liver test, Oncotype DX tests, Oncodetect test, pipeline technologies or research methods, and platform technologies.
The following laws and regulations establish coverage requirements relevant to our Cologuard test. • Section 2713 of the Patient Protection and Affordable Care Act (“ACA”) mandates that certain health insurers cover, without imposing any patient cost-sharing, evidence-based items or services that have in effect a rating of “A” or “B” in the current recommendations of USPSTF (“ACA Mandate”), which includes follow-up colonoscopy after a positive non-invasive stool-based screening test be covered without cost sharing. • Federal regulations require that Medicare Advantage plans cover “A” or “B” rated preventive services without patient cost-sharing, and CMS has issued a notice affirming that Medicare Advantage plans must include coverage of our Cologuard test every three years without patient cost-sharing including coverage of a follow-up colonoscopy after a positive non-invasive stool-based screening test effective January 1, 2023.
Medicare Part B covers our Cologuard and Cologuard Plus tests once every three years for beneficiaries who are age 45 to 85, asymptomatic and at average risk for developing colorectal cancer. 9 Table of Contents The following laws and regulations establish coverage requirements relevant to our Cologuard and Cologuard Plus tests. • Section 2713 of the Patient Protection and Affordable Care Act (“ACA”) mandates that certain health insurers cover, without imposing any patient cost-sharing, evidence-based items or services that have in effect a rating of “A” or “B” in the current recommendations of USPSTF (“ACA Mandate”), which includes follow-up colonoscopy after a positive non-invasive stool-based screening test be covered without cost sharing. • Federal regulations require that Medicare Advantage plans cover “A” or “B” rated preventive services without patient cost-sharing, and CMS has issued a notice affirming that Medicare Advantage plans must include coverage of our Cologuard and Cologuard Plus tests every three years without patient cost-sharing including coverage of a follow-up colonoscopy after a positive non-invasive stool-based screening test effective January 1, 2023.
In the past year, Geneoscopy, Inc. (“Geneoscopy”) received FDA approval for its ColoSense stool-based test which will compete directly with our Cologuard tests in the United States. We are aware of at least two other companies (Mainz Biomed and Prescient Metabiomics) who are developing stool-based colorectal cancer screening tests. We are also aware of many companies including Guardant Health, Inc.
(“Geneoscopy”) received FDA approval for its ColoSense stool-based test which competes directly with our Cologuard tests in the United States. We are aware of at least two other companies (Mainz Biomed and Prescient Metabiomics) who are developing stool-based colorectal cancer screening tests.
We also expect to enhance our MRD test by leveraging the Broad Institute’s Minor Allele Enriched Sequencing Through Recognition Oligonucleotides (“MAESTRO”) diagnostic testing technology, which we secured exclusive rights to in June 2023 through a sponsored research and license agreement. We are currently developing the MAESTRO platform and expect to analytically validate this technology in 2025. • MCED Test Development.
We also expect to enhance our MRD test by leveraging the Broad Institute’s Minor Allele Enriched Sequencing Through Recognition Oligonucleotides (“MAESTRO”) diagnostic testing technology, which we secured exclusive rights to in June 2023 through a sponsored research and license agreement. In 2026, we expect to introduce a next-generation version of this test leveraging the MAESTRO technology. • MCED Test Development.
Our commercial infrastructure, including our sales force, managed care group, and patient support network, is critical to the success of our precision oncology products. In our domestic sales, marketing, and reimbursement efforts, we interact directly with medical, radiation, and surgical oncologists, pathologists, and payers. We employ a direct sales approach that targets oncologists and cancer surgeons.
Precision Oncology Commercial Operations We promote our precision oncology tests through our precision oncology sales force. Our commercial infrastructure, including our sales force, managed care group, and patient support network, is critical to the success of our precision oncology products. In our domestic sales, marketing, and reimbursement efforts, we interact directly with medical, radiation, and surgical oncologists, pathologists, and payers.
We expect to launch the test as an LDT in the second half of 2025. Pipeline Research and Development We are continuing to advance our pipeline of future screening and diagnostic products, including risk assessment, screening and prevention, early disease diagnosis, adjuvant and/or neoadjuvant disease treatment, metastatic disease treatment selection, and recurrence monitoring.
Pipeline Research and Development We are continuing to advance our pipeline of future screening and diagnostic products, including risk assessment, screening and prevention, early disease diagnosis, adjuvant and/or neoadjuvant disease treatment, metastatic disease treatment selection, and recurrence monitoring.
We face competition from a variety of sources, including Ambry Genetics (now owned by Tempus AI); Myriad Genetics, Inc.; Natera; Color Health, Inc.; GeneDx; Illumina; Variantyx; 3billion; a few large, established general testing companies such as Laboratory Corporation of America Holdings (LabCorp) and Quest Diagnostics Incorporated; and clinical laboratories in an academic or healthcare provider setting that perform clinical genetic testing on behalf of their affiliated institutions. 11 Table of Contents Precision Oncology Competition Our precision oncology products compete against a number of companies that are developing or commercializing products to profile genes and gene expression in breast and colon cancer.
We face competition from a variety of sources, including Ambry Genetics (owned by Tempus AI); Myriad Genetics, Inc.; Natera; Color Health, Inc.; GeneDx; Illumina; Variantyx; 3billion; a few large, established general testing companies such as Laboratory Corporation of America Holdings (LabCorp) and Quest Diagnostics Incorporated; and clinical laboratories in an academic or healthcare provider setting that perform clinical genetic testing on behalf of their affiliated institutions.
Johns Hopkins University Through the acquisition of Thrive Earlier Detection Corporation (“Thrive”), we acquired a worldwide exclusive license agreement with The Johns Hopkins University for use of several JHU patents and licensed know-how. We are seeking to utilize the JHU licensed technology to develop and commercialize a blood-based MCED test.
Johns Hopkins University Through the acquisition of Thrive Earlier Detection Corporation (“Thrive”), we acquired a worldwide exclusive license agreement with The Johns Hopkins University for use of several JHU patents and licensed know-how.
The FDA historically has taken the position that it has the authority to regulate such tests as medical devices under the FDCA and until recently has for the most part exercised enforcement discretion and not required clearance or approval of LDTs prior to marketing.
LDTs are clinical laboratory tests that are developed and validated by a laboratory for its own use. The FDA historically took the position that it has the authority to regulate such tests as medical devices under the FDCA and for the most part exercised enforcement discretion and not required clearance or approval of LDTs prior to marketing.
Methylation, mutation, and hemoglobin results are combined in the laboratory analysis through a proprietary algorithm to provide a single positive or negative reportable result. We believe the large, underserved population of unscreened and inadequately screened patients represents a significant opportunity for our Cologuard test. It is widely accepted that colorectal cancer is among the most preventable, yet least prevented cancers.
Methylation, mutation, and hemoglobin results are combined in the laboratory analysis through a proprietary algorithm to provide a single positive or negative reportable result. We believe the large, underserved population of unscreened and inadequately screened patients represents a significant opportunity for our Cologuard and Cologuard Plus tests.
The updated guidelines include our Cologuard test (referred to in their statement as sDNA-FIT) as a recommended screening method for all average-risk patients in the 45-75 age group. • The ACS has specifically included our Cologuard test as a recommended colorectal cancer screening test in average-risk, asymptomatic individuals.
The updated guidelines include our Cologuard and Cologuard Plus tests (referred to in their statement as sDNA-FIT) as recommended screening methods for all average-risk patients in the 45-75 age group. • The ACS recommends mt-sDNA as a front-line option colorectal cancer screening test, including our Cologuard and Cologuard Plus tests, in average-risk, asymptomatic individuals.
These amendments could subject our procedures for identifying and processing payments to greater scrutiny. Overpayments may occur from time to time in the healthcare industry without any fraudulent intent. For example, overpayments may result from mistakes in reimbursement claim forms or from improper processing by governmental payers. We maintain protocols intended to identify any overpayments.
Overpayments may occur from time to time in the healthcare industry without any fraudulent intent. For example, overpayments may result from mistakes in reimbursement claim forms or from improper processing by governmental payers. We maintain protocols intended to identify any overpayments. From time to time we have identified overpayments and made refunds to government payers.
Based on our experience to date, we expect some seasonal variations in our financial results due to a variety of factors, such as the year-end holiday period and other major holidays, vacation patterns of both patients and healthcare providers, climate and weather conditions in our markets, seasonal conditions that may affect medical practices and patient, payer, and provider activity, including influenza outbreaks that may reduce the percentage of patients that can be seen or decrease patient’s willingness to visit medical practices, and other factors relating to the timing of patient deductibles and co-insurance limits.
Based on our experience to date, we expect some seasonal variations in our financial results due to a variety of factors, such as the year-end holiday period and other major holidays, vacation patterns of both patients and healthcare providers, climate and weather conditions in our markets, seasonal conditions that may affect medical practices and patient, payer, and provider activity, including influenza outbreaks that may reduce the percentage of patients that can be seen or decrease patient’s willingness to visit medical practices, and other factors relating to the timing of patient deductibles and co-insurance limits. 12 Table of Contents Regulation Certain of our activities are subject to regulatory oversight by the FDA under provisions of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and regulations thereunder, including regulations governing the development, marketing, labeling, promotion, manufacturing, distribution, and export of medical devices.
We also plan to continue to utilize data from our clinical studies published in peer-reviewed journals to demonstrate the clinical value of our precision oncology products.
We employ a direct sales approach that targets oncologists and cancer surgeons. We also plan to continue to utilize data from our clinical studies published in peer-reviewed journals to demonstrate the clinical value of our precision oncology products.
From time to time we have identified overpayments and made refunds to government payers. To avoid liability, we must carefully and accurately code claims for reimbursement, proactively monitor the accuracy and appropriateness of Medicare claims and payments received, diligently investigate any credible information indicating that we may have received an overpayment, and promptly return any overpayments.
To avoid liability, we must carefully and accurately code claims for reimbursement, proactively monitor the accuracy and appropriateness of Medicare claims and payments received, diligently investigate any credible information indicating that we may have received an overpayment, and promptly return any overpayments. Federal and State “Anti-Kickback” and “Self-Referral” Restrictions Anti-Kickback Statute.
The test is supported by multiple rigorous clinical validation studies, including the landmark TAILORx and RxPONDER studies, confirming the test’s ability to predict the likelihood of chemotherapy benefit as well as the chance of cancer recurrence in the most common sub-type of early-stage breast cancer. 5 Table of Contents As the only test proven to predict both the likelihood of chemotherapy benefit and cancer recurrence, the Oncotype DX Breast Recurrence Score test is recognized globally as standard of care and is included in all major breast cancer treatment guidelines.
The test is supported by multiple rigorous clinical validation studies, including the landmark TAILORx and RxPONDER studies, confirming the test’s ability to predict the likelihood of chemotherapy benefit as well as the chance of cancer recurrence in the most common sub-type of early-stage breast cancer.
To facilitate talent attraction and retention, we strive to make Exact Sciences a diverse and inclusive workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits, and health and wellness programs. At December 31, 2024, we had approximately 7,000 full-time, part-time and temporary employees, 6,900 of which were full-time employees.
To facilitate talent attraction and retention, we strive to make Exact Sciences a diverse and inclusive workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits, and health and wellness programs.
In addition to granting us a license to the covered Mayo intellectual property, Mayo provides us with product development research and development assistance pursuant to the license agreement and other collaborative arrangements. In September 2020, Mayo also agreed to make available certain personnel to provide such assistance through January 2025.
In addition to granting us a license to the covered Mayo intellectual property, Mayo provides us with product development research and development assistance pursuant to the license agreement and other collaborative arrangements.
(“Guardant”), Freenome, Inc., GRAIL, Inc., and Natera Inc. (“Natera”), that have developed or are developing blood-based colorectal cancer screening tests. Guardant Health recently received FDA approval and Medicare coverage of its blood-based test (Shield).
We are also aware of many companies including Guardant Health, Inc., Freenome, who we executed an exclusive license agreement with related to their blood-based colorectal cancer screening tests, GRAIL, Inc., and Natera Inc., that have developed or are developing blood-based colorectal cancer screening tests. Guardant Health, Inc. recently received FDA approval and Medicare coverage of its blood-based test (Shield).
These companies include Agendia Inc., Veracyte, Inc., Myriad Genetics, Inc., and Hologic, Inc. There are multiple companies who have therapy selection products (either tissue-based or blood-based) which compete with the OncoExTra test and our in-development Oncoliquid TM test including Tempus AI, Caris Life Sciences, NeoGenomics, Myriad Genetics, Inc., and Delfi.
There are multiple companies who have therapy selection products (either tissue-based or blood-based) which compete with the OncoExTra test and our in-development Oncoliquid TM test including Tempus AI, Caris Life Sciences, NeoGenomics, Myriad Genetics, Inc., and Delfi. Historically, our principal competition for our precision oncology tests has also come from existing diagnostic methods used by pathologists and oncologists.
Results from our Beta-CORRECT study, which we expect to present at an upcoming scientific conference, confirm a significant association between MRD positivity and recurrence in patients with stages II through IV colorectal cancer.
Results from our Beta-CORRECT study, which we presented at the 2025 American Society of Clinical Oncology Annual Meeting, confirm a significant association between MRD positivity and recurrence in patients with stages II through IV colorectal cancer.
During 2024, we continued to deepen our investment in large, organized screening programs to further solidify our Cologuard test as a solution for patients who infrequently visit their health care provider. Precision Oncology Commercial Operations We promote our precision oncology tests through our precision oncology sales force.
During 2025, we continued to deepen our investment in large, organized screening programs and direct ordering channels via Cologuard.com to further solidify our Cologuard and Cologuard Plus tests as a solution for patients who infrequently visit their health care provider.
Medicare coverage for our precision oncology tests is currently subject to the discretion of the local Medicare Administrative Contractors (“MAC”).
Reimbursement for our Precision Oncology Tests We depend on government insurance plans, managed care organizations, and commercial insurance plans for reimbursement of our precision oncology tests. Medicare coverage for our precision oncology tests is currently subject to the discretion of the local Medicare Administrative Contractors (“MAC”).
We believe that the success of our products depends on our ability to differentiate ourselves, including through continued investment in product enhancements and new technologies, and to demonstrate that our products deliver the clinical and operational attributes that are most important to hospitals, clinics, group purchasing organizations, physicians, and patients.
We believe that the success of our products depends on our ability to differentiate ourselves, including through continued investment in product enhancements and new technologies, and to demonstrate that our products deliver the clinical and operational attributes that are most important to hospitals, clinics, group purchasing organizations, physicians, and patients. 11 Table of Contents Screening Competition The U.S. opportunity for colorectal cancer screening is large, consisting of nearly 110 million eligible individuals between the ages of 45 and 85, and has attracted numerous competitors.
Colorectal cancer can take up to 10-15 years to progress from a pre-cancerous lesion to metastatic cancer and death. Patients who are diagnosed early in the progression of the disease — with pre-cancerous lesions or early-stage cancer — are more likely to have a complete recovery and to be treated less expensively.
Patients who are diagnosed early in the progression of the disease — with pre-cancerous lesions or early-stage cancer — are more likely to have a complete recovery and to be treated less expensively. Colorectal cancer is the second leading cause of cancer deaths in the U.S. and the leading cause of cancer deaths in the U.S. among non-smokers.
Most commercial payers have issued positive coverage decisions for our Cologuard test, and we have negotiated contracts with most payers to include our Cologuard test as an in-network service. In-network agreements with payers have varying terms and conditions, including reimbursement rate, term, and termination. Other payers may perform post-payment reviews or audits, which may lead to payment recoupments.
We continue to work with these payers to negotiate amendments to our existing network agreements to add the Cologuard Plus test. In-network agreements with payers have varying terms and conditions, including reimbursement rate, term, and termination. Other payers may perform post-payment reviews or audits, which may lead to payment recoupments.
Internal studies have shown that approximately 40% of surveyed Cologuard users were previously unscreened for colorectal cancer. Our Cologuard test is included in key guidelines and quality measures that many healthcare providers rely on when making screening recommendations. • In its updated guidelines released in May 2021, the U.S.
Our Cologuard and Cologuard Plus tests are included in key guidelines and quality measures that many healthcare providers rely on when making screening recommendations. • In its updated guidelines released in May 2021, the U.S.
Many states have also adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs, and do not contain identical safe harbors. 14 Table of Contents In addition, the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”) imposes criminal penalties for knowing or willful payment or offer, or solicitation or receipt, of any remuneration, whether directly or indirectly, overtly or covertly, in cash or in kind, in exchange for the referral or inducement of laboratory testing (among other healthcare services) unless a specific exception applies.
In addition, the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”) imposes criminal penalties for knowing or willful payment or offer, or solicitation or receipt, of any remuneration, whether directly or indirectly, overtly or covertly, in cash or in kind, in exchange for the referral or inducement of laboratory testing (among other healthcare services) unless a specific exception applies.
Beginning in 2022, Oncotype DX breast cancer tests for German patients have been processed in our newly constructed facility in Trier, Germany, a portion of which is operated by a third-party partner. Our OncoExTra tests, along with tests completed under certain of our reference lab agreements, are processed in our CLIA-certified and CAP-accredited clinical reference laboratory facilities in Phoenix, Arizona.
Beginning in 2022, Oncotype DX Breast Recurrence Score tests for German patients have been processed in our newly constructed facility in Trier, Germany, a portion of which is operated by a third-party partner.
Generally, the license agreements require us to pay single-digit royalties based on net revenues received using the technologies and may require minimum royalty amounts, milestone payments, or maintenance fees. 16 Table of Contents Mayo Foundation for Medical Education and Research In June 2009, we entered into an exclusive, worldwide license agreement with Mayo Foundation for Medical Education and Research, under which Mayo granted us an exclusive, worldwide license to certain Mayo patents and patent applications, as well as a non-exclusive, worldwide license with regard to certain Mayo know-how.
Mayo Foundation for Medical Education and Research In June 2009, we entered into an exclusive, worldwide license agreement with Mayo Foundation for Medical Education and Research, under which Mayo granted us an exclusive, worldwide license to certain Mayo patents and patent applications, as well as a non-exclusive, worldwide license with regard to certain Mayo know-how.
We are aware of other companies with MCED products either commercially available or in development that will compete directly with our Cancerguard test. These companies include GRAIL, Inc., Guardant Health, Inc., and Freenome, Inc. The genetic testing market is highly competitive, and we expect this competition to intensify in the future as our competitors consolidate and new competitors emerge.
We also entered the MCED market with our Cancerguard test, which was launched in September 2025. We are aware of other companies with MCED products either commercially available or in development that will compete directly with our Cancerguard test. These companies include GRAIL, Inc., Guardant Health, Inc., Caris Life Sciences, and Freenome.
There are nearly 110 million Americans between the ages of 45 and 85 who are at average risk for colorectal cancer. At a three-year screening interval and an average revenue per test of approximately $500, this represents a potential $18 billion market for our Cologuard test.
At a three-year screening interval and an average revenue per test of approximately $592 for Cologuard Plus, this represents a potential $22 billion annual market for our Cologuard tests. 5 Table of Contents More than 40% of Americans between the ages of 45 and 85 who are at average risk for colorectal cancer are not up-to-date with screening according to the American Cancer Society’s (“ACS”) colorectal cancer screening guidelines.
We expect that our international sales will be heavily dependent on the availability of reimbursement, and broadening coverage and reimbursement for our precision oncology tests and other tests outside of the United States will take years.
We have obtained coverage or other public financing for our Oncotype DX breast cancer test outside of the U.S., including coverage for certain patients in more than ten countries. 10 Table of Contents We expect that our international sales will be heavily dependent on the availability of reimbursement, and broadening coverage and reimbursement for our precision oncology tests and other tests outside of the United States will take years.
In May 2024, the FDA issued a final rule (the “LDT Rule”) that amended the FDA's regulations to make explicit that LDTs are devices under the FD&C Act.
In May 2024, the FDA issued a final rule (the “LDT Rule”), which amended the FDA's regulations to make explicit that LDTs are devices under the FDCA and set forth a process for enhanced regulation of LDTs. On March 31, 2025, the U.S.
This test is expected to help patients and oncologists understand the success of initial treatment, guide further treatment, and monitor for cancer recurrence.
Oncodetect Test Our tumor-informed Oncodetect MRD test is designed to detect small amounts of tumor DNA that may remain in patients’ blood after they have undergone initial treatment. This test is expected to help patients and oncologists understand the success of initial treatment, guide further treatment, and monitor for cancer recurrence.
Our peer-reviewed study, “Multitarget Stool DNA Testing for Colorectal-Cancer Screening,” published in the New England Journal of Medicine in April 2014, highlighted the performance of the Cologuard test in its 10,000 patient Deep-C clinical trial: • Cancer Sensitivity: 92% • Stage I and II Cancer Sensitivity: 94% 4 Table of Contents • High-Grade Dysplasia Sensitivity: 69% • Specificity: 87% We believe the competitive advantages of sDNA screening provide a significant market opportunity.
Our Cologuard and Cologuard Plus tests are indicated for average risk adults 45 years of age and older. Our peer-reviewed study, “Multitarget Stool DNA Testing for Colorectal-Cancer Screening,” published in the New England Journal of Medicine in April 2014, highlighted the performance of the Cologuard test in its 10,000 patient DeeP-C clinical trial.
With respect to our MRD test in development, each of Natera, Tempus AI, Guardant, NeoGenomics, Myriad Genetics, Inc., Quest Diagnostics, and Personalis have commercially available competitive MRD tests or have such tests in development. Historically, our principal competition for our precision oncology tests has also come from existing diagnostic methods used by pathologists and oncologists.
Each of Natera, Tempus AI, Guardant, NeoGenomics, Myriad Genetics, Inc., Quest Diagnostics, and Personalis have commercially available competitive MRD tests or have such tests in development, which currently or may in the future compete directly with our Oncodetect MRD test.
In addition, amendments to the False Claims Act impose severe penalties for the knowing and improper retention of overpayments collected from governmental payers. Within 60 days of identifying and quantifying an overpayment, a provider is required to notify CMS or the Medicare contractor of the overpayment and the reason for it and return the overpayment.
Within 60 days of identifying and quantifying an overpayment, a provider is required to notify CMS or the Medicare contractor of the overpayment and the reason for it and return the overpayment. These amendments could subject our procedures for identifying and processing payments to greater scrutiny.
We have intellectual property rights to a wide variety of technologies including sample preparation, sample preservation, biomarkers, gene expression and sequencing technology, and related methods and formulations. Our success depends upon our ability to protect our technologies through patent coverage and, where necessary, defend and enforce our patents in administrative proceedings and litigation.
Our success depends upon our ability to protect our technologies through patent coverage and, where necessary, defend and enforce our patents in administrative proceedings and litigation.
In addition, we have been awarded with a Great Place to Work Certification ® , Gallup Exceptional Workplace Award, and Wisconsin State Journal Top Workplaces in 2024. Compensation and Benefits Attracting the best talent starts with offering industry-leading compensation and benefits.
We have been recertified as Great Place to Work ® in the U.S. for the seventh consecutive year and for the first time in Canada, France, Germany, Italy, Japan, Poland, and United Kingdom. In addition, we have been awarded Gallup Exceptional Workplace Award in 2025. Compensation and Benefits Attracting the best talent starts with offering industry-leading compensation and benefits.
Numerous federal and state agencies enforce the anti-fraud and abuse laws. In addition, private insurers may also bring private actions. In some circumstances, private whistleblowers are authorized to bring fraud suits on behalf of the government against providers and are entitled to receive a portion of any final recovery.
Numerous federal and state agencies enforce the anti-fraud and abuse laws. In addition, private insurers may also bring private actions.
More than 95% of our employees are located in the United States and none of our employees are represented by a labor union.
At December 31, 2025, we had approximately 7,200 full-time, part-time and temporary employees, 7,100 of which were full-time employees. 95% of our employees are located in the United States and none of our employees are represented by a labor union.
Intellectual Property We rely on a combination of patents, patent applications, copyrights, and trademarks, as well as contracts, such as confidentiality, material data transfer, and license and invention assignment agreements to protect our intellectual property rights. We also rely upon trade secret laws to protect unpatented know-how and continuing technological innovation.
There were no material capital expenditures for environmental control facilities in the year ended December 31, 2025 and there are no material expenditures planned for such purposes for the year ended December 31, 2026. 16 Table of Contents Intellectual Property We rely on a combination of patents, patent applications, copyrights, and trademarks, as well as contracts, such as confidentiality, material data transfer, and license and invention assignment agreements to protect our intellectual property rights.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Relating to Governmental Regulation and Reimbursement • We face uncertainty related to healthcare reform, pricing, coverage, and reimbursement. • If payers, including managed care organizations, do not approve and maintain reimbursement for our tests at adequate reimbursement rates, our commercial success could be compromised. • If we are unable to obtain or maintain reimbursement at adequate reimbursement rates for our Oncotype DX tests outside of the U.S., our ability to expand internationally will be compromised. • Failure to comply with federal, state, and foreign laboratory licensing and related requirements could cause us to lose the ability to perform our tests, experience disruptions to our business, or become subject to administrative or judicial sanctions. • Our products could be subject to recall. • Delays in receipt of, or failure to obtain, required FDA clearances or approvals for our products in development, or improvements to or expanded indications for our current offerings, could materially delay or prevent us from commercializing or otherwise adversely impact future product commercialization. • The FDA's implementation of the LDT Rule may cause us to incur substantial costs and time delays associated with meeting requirements for pre-market clearance or approval or we could experience decreased demand for or reimbursement of our tests. 20 Table of Contents • We are subject to numerous U.S. and foreign laws and governmental regulations, and any governmental enforcement action may materially affect our financial condition and business operations. • Our business is subject to various complex laws and regulations applicable to providers of clinical diagnostics and services. • Due to billing complexities in the diagnostic and laboratory service industry, we may have difficulties receiving timely payment for the tests we perform, and may face write-offs, disputes with payers and patients, and long collection cycles. • Some of our activities may subject us to risks under federal, state, and foreign laws prohibiting “kickbacks” and false or fraudulent claims. • Some of our activities may subject us to risks under the Foreign Corrupt Practices Act and similar anti-bribery laws in non-U.S. jurisdictions. • Failure to comply with privacy, security, and consumer protection laws and regulations could result in fines, penalties, and damage to our reputation and have a material adverse effect on our business. • Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. • Changes in tax laws or regulations or exposure to tax liabilities could adversely affect our financial condition and results of operations.
Biggest changeRisks Relating to Governmental Regulation and Reimbursement • We face uncertainty related to healthcare reform, pricing, coverage, and reimbursement. • Healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare system could have an adverse effect on our business, financial condition, results of operations and prospects. • If payers, including managed care organizations, do not approve and maintain reimbursement for our tests at adequate reimbursement rates, our commercial success could be compromised. • If we are unable to obtain or maintain reimbursement at adequate reimbursement rates for our Oncotype DX tests outside of the U.S., our ability to expand internationally will be compromised. 20 Table of Contents • Failure to comply with federal, state, and foreign laboratory licensing and related requirements could cause us to lose the ability to perform our tests, experience disruptions to our business, or become subject to administrative or judicial sanctions. • Our products could be subject to recall. • Delays in receipt of, or failure to obtain, required FDA clearances or approvals for our products in development, or improvements to or expanded indications for our current offerings, could materially delay or prevent us from commercializing or otherwise adversely impact future product commercialization. • Disruptions at the FDA and other government agencies and regulatory authorities caused by government shutdowns, policy changes, funding shortages, or key personnel disruptions could prevent new products and services from being reviewed or approved in a timely manner or at all, or otherwise prevent those agencies from performing normal governmental functions on which the operation of our business may rely, which could negatively impact our business, financial condition and results of operations. • There exists substantial uncertainty regarding the future regulation of the LDTs. • We are subject to numerous U.S. and foreign laws and governmental regulations, and any governmental enforcement action may materially affect our financial condition and business operations. • Our business is subject to various complex laws and regulations applicable to providers of clinical diagnostics and services. • Due to billing complexities in the diagnostic and laboratory service industry, we may have difficulties receiving timely payment for the tests we perform, and may face write-offs, disputes with payers and patients, and long collection cycles. • Some of our activities may subject us to risks under federal, state, and foreign laws prohibiting “kickbacks” and false or fraudulent claims. • Some of our activities may subject us to risks under the Foreign Corrupt Practices Act and similar anti-bribery laws in non-U.S. jurisdictions. • Failure to comply with privacy, security, and consumer protection laws and regulations could result in fines, penalties, and damage to our reputation and have a material adverse effect on our business. • Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. • Changes in tax laws or regulations or exposure to tax liabilities could adversely affect our financial condition and results of operations.
Healthcare reforms, which may intend to reduce healthcare costs, may have the effect of discouraging third-party payers from covering certain kinds of medical products and services, particularly newly developed technologies, like those we have developed in the past or we may develop in the future.
Future healthcare reforms, which may intend to reduce healthcare costs, may have the effect of discouraging third-party payers from covering certain kinds of medical products and services, particularly newly developed technologies, like those we have developed in the past or we may develop in the future.
Although we believe our Oncodetect data demonstrates the utility of the test, successful commercialization will depend on our ability to garner acceptance in the medical community.
Although we believe our Oncodetect test data demonstrates the utility of the test, successful commercialization will depend on our ability to garner acceptance in the medical community.
The commercial success of our tests, our successful commercialization of any new products and our ability to generate revenues will depend on a variety of factors, including the following: • acceptance in the medical community; • inclusion in healthcare guidelines and recommendations; • inclusion in quality measures, including the HEDIS measures and the CMS Medicare Advantage Star Ratings; • recommendations and studies that may be published by government agencies, professional organizations, academic or medical journals or other key opinion leaders; • patient acceptance and demand; • patient compliance with orders for our tests by healthcare providers, and patient adherence to recommendations regarding periodic re-testing; • successful new screening initiatives, including gap closure programs through which we partner with health systems and payers to deliver Cologuard test kits to their patients or members who are due for colorectal cancer screening under applicable guidelines; • effective marketing and educational programs, including successful direct-to-patient marketing such as television advertising and social media; • sufficient coverage and reimbursement by payers; • the existence of federal or state laws that mandate coverage for colorectal cancer and other types of screening, the extent to which those laws mandate coverage of our tests and the enforcement of those laws; • the amount and nature of competition from other products and procedures; • maintaining regulatory approvals to legally market our products and services; and • the ease of use of our ordering process for healthcare providers. 22 Table of Contents If we are unable to continue growing sales of our screening and precision oncology tests, we are delayed or limited in doing so, or we are unable to successfully commercialize our tests in development or other new products, our business prospects, financial condition, and results of operations would be adversely affected.
The commercial success of our tests, our successful commercialization of any new products and our ability to generate revenues will depend on a variety of factors, including the following: • acceptance in the medical community; • inclusion in healthcare guidelines and recommendations; • inclusion in quality measures, including the HEDIS measures and the CMS Medicare Advantage Star Ratings; • recommendations and studies that may be published by government agencies, professional organizations, academic or medical journals or other key opinion leaders; • patient acceptance and demand; • patient compliance with orders for our tests by healthcare providers, and patient adherence to recommendations regarding periodic re-testing; • successful new screening initiatives, including gap closure programs through which we partner with health systems and payers to deliver Cologuard test kits to their patients or members who are due for colorectal cancer screening under applicable guidelines; • effective marketing and educational programs, including successful direct-to-patient marketing such as television advertising and social media; • sufficient coverage and reimbursement by payers; • the existence of federal or state laws that mandate coverage for colorectal cancer and other types of screening, the extent to which those laws mandate coverage of our tests and the enforcement of those laws; • the amount and nature of competition from other products and procedures; • maintaining regulatory approvals to legally market our products and services; and • the ease of use of our ordering process for healthcare providers. 24 Table of Contents If we are unable to continue growing sales of our screening and precision oncology tests, we are delayed or limited in doing so, or we are unable to successfully commercialize our tests in development or other new products, our business prospects, financial condition, and results of operations would be adversely affected.
The degree of market acceptance of our Cologuard test, Cologuard Plus test, our precision oncology tests, and other products and services that we offer will depend on a number of factors, including: • demonstrated performance and utility; • price; • the availability and attractiveness of alternative tests; • inclusion in healthcare guidelines and recommendations and quality measures; • effective marketing and educational programs; • recommendations and studies that may be published by government agencies, companies, professional organizations, academic or medical journals or other key opinion leaders; • the willingness of healthcare providers to prescribe our products and services; • the ease of use of our ordering process for healthcare providers; and • adequate third-party coverage or reimbursement.
The degree of market acceptance of our Cologuard test, Cologuard Plus test, Cancerguard test, our precision oncology tests, and other products and services that we offer will depend on a number of factors, including: • demonstrated performance and utility; • price; • the availability and attractiveness of alternative tests; • inclusion in healthcare guidelines and recommendations and quality measures; • effective marketing and educational programs; • recommendations and studies that may be published by government agencies, companies, professional organizations, academic or medical journals or other key opinion leaders; • the willingness of healthcare providers to prescribe our products and services; • the ease of use of our ordering process for healthcare providers; and • adequate third-party coverage or reimbursement.
To the extent patients express dissatisfaction with our billing practices to their healthcare providers, those healthcare providers may be less likely to prescribe our tests for other patients, and our business would be adversely affected. 36 Table of Contents Even if payers agree to cover our tests, our billing and collections process may be complicated by the following and other factors, which may be beyond our control: • complex and disparate reimbursement rules and requirements; • disputes among payers as to which payer is responsible for payment; • disparity in coverage among various payers or among various healthcare plans offered by a single payer; • payer medical management requirements, including prior authorization requirements; • differing information and billing requirements among payers; • failure by patients or healthcare providers to provide complete and correct billing information; and • limitations and requirement for patient billing, including those related to deductibles, co-payments, and co-insurance originating from contracts with commercial payers.
To the extent patients express dissatisfaction with our billing practices to their healthcare providers, those healthcare providers may be less likely to prescribe our tests for other patients, and our business would be adversely affected. 39 Table of Contents Even if payers agree to cover our tests, our billing and collections process may be complicated by the following and other factors, which may be beyond our control: • complex and disparate reimbursement rules and requirements; • disputes among payers as to which payer is responsible for payment; • disparity in coverage among various payers or among various healthcare plans offered by a single payer; • payer medical management requirements, including prior authorization requirements; • differing information and billing requirements among payers; • failure by patients or healthcare providers to provide complete and correct billing information; and • limitations and requirement for patient billing, including those related to deductibles, co-payments, and co-insurance originating from contracts with commercial payers.
We depend on information technology (“IT”) systems for significant elements of our operations, including our laboratory information management system and our ExactNexus TM technology platform. Our IT systems support a variety of functions, including laboratory operations, test validation, sample tracking, quality control, customer service support, billing and reimbursement, research and development activities, scientific and medical curation and general administrative activities.
We depend on information technology (“IT”) systems for significant elements of our operations, including our laboratory information management system and our ExactNexus ® technology platform. Our IT systems support a variety of functions, including laboratory operations, test validation, sample tracking, quality control, customer service support, billing and reimbursement, research and development activities, scientific and medical curation and general administrative activities.
For example, while we believe the ACA Mandate requires most health insurers to cover our Cologuard and Cologuard Plus tests for most patients between the ages of 45 and 75 without patient cost-sharing, some health insurers have disagreed and determined not to cover our Cologuard and Cologuard Plus tests and others may take that position in the future.
For example, while we believe the ACA requires most health insurers to cover our Cologuard and Cologuard Plus tests for most patients between the ages of 45 and 75 without patient cost-sharing, some health insurers have disagreed and determined not to cover our Cologuard and Cologuard Plus tests and others may take that position in the future.
Risks Relating to our Intellectual Property We rely on strategic collaborative and licensing arrangements with third parties to develop critical intellectual property. We may not be able to successfully establish and maintain such intellectual property. The development and commercialization of our products and services rely, directly or indirectly, upon strategic collaborations and licensing agreements with third parties.
Risks Relating to our Intellectual Property We rely on strategic collaborative and licensing arrangements with third parties to develop critical intellectual property. We may not be able to successfully establish and maintain such collaborative and license agreements. The development and commercialization of our products and services rely, directly or indirectly, upon strategic collaborations and licensing agreements with third parties.
We expect to continue investing significantly toward development and commercialization of our colorectal cancer screening technology, our precision oncology tests, our MCED and MRD tests, and other products and services. If our revenue does not continue to grow faster than our cost of sales and operating expenses, we will not become profitable.
We expect to continue investing significantly toward continued development and commercialization of our colorectal cancer screening technology, our precision oncology tests, our MCED and MRD tests, and other products and services. If our revenue does not continue to grow faster than our cost of sales and operating expenses, we will not become profitable.
We are also required to comply with FDA regulations, including with respect to our labeling and promotion activities. In addition, advertising of our tests is subject to regulation by the Federal Trade Commission, or FTC, and advertising of laboratory services is regulated by certain state laws.
We are also required to comply with FDA regulations, including with respect to our labeling and promotion activities. In addition, advertising of our tests is subject to regulation by the Federal Trade Commission ("FTC") and advertising of laboratory services is regulated by certain state laws.
We maintain a global compliance program, including a code of business conduct and ethics and processes and systems for reporting, reviewing, and remediating allegations of potential non-compliance or other misconduct, but it is not always possible to identify and deter misconduct by employees and third parties, 39 Table of Contents and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws.
We maintain a global compliance program, including a code of business conduct and ethics and processes and systems for reporting, reviewing, and remediating allegations of potential non-compliance or other misconduct, but it is not always possible to identify and deter misconduct by employees and third parties, 42 Table of Contents and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws.
In most cases, we ship Cologuard collection kits to patients, and patients ship samples to our Madison, Wisconsin laboratory facilities for analysis by air and ground express courier delivery service. Additionally, medical providers typically ship samples for Oncotype testing to our laboratory facilities via air and ground express courier delivery service.
In most cases, we ship Cologuard collection kits to patients, and patients ship samples to our Madison, Wisconsin laboratory facilities for analysis by air and ground express courier delivery service. Additionally, medical providers typically ship samples for Oncotype DX testing to our laboratory facilities via air and ground express courier delivery service.
We may need to raise significant additional capital to bring any new products or services to market, which may not be available on acceptable terms, if at all. 43 Table of Contents Interim, topline and preliminary data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
We may need to raise significant additional capital to bring any new products or services to market, which may not be available on acceptable terms, if at all. 46 Table of Contents Interim, topline and preliminary data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
If our present, or any future facilities, were to be damaged, destroyed or otherwise unable to operate, whether due to fire, floods, storms, tornadoes, earthquakes, other inclement weather events or natural disasters, employee malfeasance, terrorist acts, power outages, or otherwise, it may render it difficult or impossible for us to perform our tests for some period of time, and our 23 Table of Contents business could be severely disrupted.
If our present, or any future facilities, were to be damaged, destroyed or otherwise unable to operate, whether due to fire, floods, storms, tornadoes, earthquakes, other inclement weather events or natural disasters, employee malfeasance, terrorist acts, power outages, or otherwise, it may render it difficult or impossible for us to perform our tests for some period of time, and our 25 Table of Contents business could be severely disrupted.
Although other companies may offer viable alternative platforms, we have invested significant capital, time and expertise to procure Illumina and Hamilton machines and to optimize their use in our tests.
Although other companies may offer viable alternative platforms, we have invested significant capital, time and expertise to procure Phillips, Illumina, and Hamilton machines and to optimize their use in our tests.
If we do not update our product offerings to reflect new scientific knowledge about cancer biology, information about new cancer therapies or relevant clinical studies, our products could become obsolete and sales of our current products and any new products we may develop could decline or fail to grow as expected. 44 Table of Contents The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate.
If we do not update our product offerings to reflect new scientific knowledge about cancer biology, information about new cancer therapies or relevant clinical studies, our products could become obsolete and sales of our current products and any new products we may develop could decline or fail to grow as expected. 47 Table of Contents The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate.
Implementing new software to replace Epic would not only be costly, complex and difficult, but could negatively affect financial accounting and reporting processes, and disrupt external commercial activities such as order receipt and product delivery. 24 Table of Contents We have engaged third party vendors to provide services with respect to a variety of business processes.
Implementing new software to replace Epic would not only be costly, complex and difficult, but could negatively affect financial accounting and reporting processes, and disrupt external commercial activities such as order receipt and product delivery. 26 Table of Contents We have engaged third party vendors to provide services with respect to a variety of business processes.
While we believe the ACA Mandate requires certain health insurers to cover our Cologuard test and Cologuard Plus test for individuals between the ages of 45 and 75 without patient cost-sharing, some health insurers have disagreed. Enforcement of the ACA Mandate is difficult and depends on state, federal, or other third-party enforcement actions that we do not control.
While we believe the ACA Mandate requires certain health insurers to cover our Cologuard and Cologuard Plus tests for individuals between the ages of 45 and 75 without patient cost-sharing, some health insurers have disagreed. Enforcement of the ACA Mandate is difficult and depends on state, federal, or other third-party enforcement actions that we do not control.
In addition, the Eliminating Kickbacks in Recovery Act of 2018 37 Table of Contents imposes criminal penalties for knowing or willful payment or offer, or solicitation or receipt, of any remuneration, whether directly or indirectly, overtly or covertly, in cash or in kind, in exchange for the referral or inducement of laboratory testing (among other healthcare services) unless a specific exception applies.
In addition, the Eliminating Kickbacks in Recovery Act of 2018 40 Table of Contents imposes criminal penalties for knowing or willful payment or offer, or solicitation or receipt, of any remuneration, whether directly or indirectly, overtly or covertly, in cash or in kind, in exchange for the referral or inducement of laboratory testing (among other healthcare services) unless a specific exception applies.
Even if we maintain adequate controls and procedures, damaging and costly errors may occur. 26 Table of Contents Our inability to manage growth could harm our business. In connection with the commercialization of our tests, we have added, and expect to continue adding, personnel to certain areas of our business, including laboratory operations, quality assurance, and compliance.
Even if we maintain adequate controls and procedures, damaging and costly errors may occur. 28 Table of Contents Our inability to manage growth could harm our business. In connection with the commercialization of our tests, we have added, and expect to continue adding, personnel to certain areas of our business, including laboratory operations, quality assurance, and compliance.
We are currently engaged in patent infringement lawsuits against Geneoscopy for its infringement of multiple Company patents. Geneoscopy has in response alleged several claims against us, in addition to asking for the USPTO to reexamine the patentability of the patents in dispute. More information on these matters can be found in Note 15 of our Notes to Consolidated Financial Statements.
We are currently engaged in patent infringement lawsuits against Geneoscopy for its infringement of multiple Company patents. Geneoscopy has in response alleged several claims against us, in addition to asking for the USPTO to reexamine the patentability of the patents in dispute. More information on these matters can be found in Note 14 of our Notes to Consolidated Financial Statements.
Any update to the USPSTF recommendations that may have the effect of reducing screening, that does not include FIT-DNA in a favorable manner, or that adds new technologies could have a material adverse effect on our business. Maintaining a high USPSTF recommendation for our Cologuard test and Cologuard Plus test may have certain potentially significant implications.
Any update to the USPSTF recommendations that may have the effect of reducing screening, that does not include FIT-DNA in a favorable manner, or that adds new technologies could have a material adverse effect on our business. Maintaining a high USPSTF recommendation for our Cologuard and Cologuard Plus tests may have certain potentially significant implications.
We may not be able to successfully establish and maintain such intellectual property. • We may be subject to substantial costs and liability, or be prevented from using technologies incorporated in our screening or diagnostic tests as a result of litigation or other proceedings relating to patent or other intellectual property rights. • If we are unable to protect or enforce our intellectual property effectively, we may be unable to prevent third parties from using our intellectual property, which would impair any competitive advantage we may otherwise have. • If patent regulations or standards are modified, such changes could have a negative impact on our business.
We may not be able to successfully establish and maintain such collaborative and license agreements. • We may be subject to substantial costs and liability, or be prevented from using technologies incorporated in our screening or diagnostic tests as a result of litigation or other proceedings relating to patent or other intellectual property rights. • If we are unable to protect or enforce our intellectual property effectively, we may be unable to prevent third parties from using our intellectual property, which would impair any competitive advantage we may otherwise have. • If patent regulations or standards are modified, such changes could have a negative impact on our business.
GDPR, and the California Consumer Privacy Act, among others. 38 Table of Contents HIPAA extensively regulates the use and disclosure of individually identifiable health information, known as “protected health information,” and require covered entities, including health plans and most health care providers, to implement administrative, physical and technical safeguards to protect the security of such information.
GDPR, and the California Consumer Privacy Act, among others. 41 Table of Contents HIPAA extensively regulates the use and disclosure of individually identifiable health information, known as “protected health information,” and require covered entities, including health plans and most health care providers, to implement administrative, physical and technical safeguards to protect the security of such information.
Our dependence on distributors for sales in many countries outside of the U.S. could limit or prevent us from selling our tests in those countries and impact our revenue. As of December 31, 2024, we have entered into exclusive distribution agreements for the sale of our Oncotype tests with distributors covering dozens of countries.
Our dependence on distributors for sales in many countries outside of the U.S. could limit or prevent us from selling our tests in those countries and impact our revenue. As of December 31, 2025, we have entered into exclusive distribution agreements for the sale of our Oncotype tests with distributors covering dozens of countries.
Any such actions or litigation in the future could result in adverse penalties or outcomes that could materially and adversely affect our business, financial condition, and results of operations. 35 Table of Contents Our business is subject to various complex laws and regulations applicable to providers of clinical diagnostic products and services.
Any such actions or litigation in the future could result in adverse penalties or outcomes that could materially and adversely affect our business, financial condition, and results of operations. 38 Table of Contents Our business is subject to various complex laws and regulations applicable to providers of clinical diagnostic products and services.
For example, any tests that we may enhance or 40 Table of Contents develop may not prove to be clinically effective in clinical trials or commercially, or may not ultimately meet our desired target product profile, be offered at acceptable cost and with the sensitivity, specificity, and other test performance metrics necessary to address the relevant clinical need or commercial opportunity; our test performance in commercial experience may be inconsistent with our validation or other clinical data; we may not be successful in achieving market awareness and demand, whether through our own sales and marketing operations or through collaborative arrangements; healthcare providers may not order or use, or third-party payers may not reimburse for, any tests that we may enhance or develop; or we may otherwise have to abandon a test or service in which we have invested substantial resources.
For example, any tests that we may enhance or develop may not prove to be clinically effective in clinical trials or commercially, or may not ultimately meet our desired target product profile, be offered at acceptable cost and with the sensitivity, specificity, and other test performance metrics necessary to address the relevant clinical need or commercial opportunity; our test performance in commercial experience may be inconsistent with our validation or other clinical data; we may not be successful in achieving market awareness and demand, whether through our own sales and marketing operations or through collaborative arrangements; healthcare providers may not order or use, or third-party payers may not reimburse for, any tests that we may enhance or develop; or we may otherwise have to abandon a test or service in which we have invested substantial resources.
For example, as described in Note 15 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, in September 2023, Genomic Health, entered into a settlement agreement with the United States, acting through the U.S.
For example, as described in Note 14 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, in September 2023, Genomic Health, entered into a settlement agreement with the United States, acting through the U.S.
The Sarbanes-Oxley Act also requires that our management report on internal control over financial reporting be attested to by our independent registered public accounting firm. Although we determined that our internal control over financial reporting was effective as of December 31, 2024, we must continue to monitor and assess our internal control over financial reporting.
The Sarbanes-Oxley Act also requires that our management report on internal control over financial reporting be attested to by our independent registered public accounting firm. Although we determined that our internal control over financial reporting was effective as of December 31, 2025, we must continue to monitor and assess our internal control over financial reporting.
There can be no assurance that our process of improving existing systems, developing new systems to support our expanding operations, protecting confidential patient 25 Table of Contents information, and improving service levels will not be delayed or will not give rise to additional systems issues in the future.
There can be no assurance that our process of improving existing systems, developing new systems to support our expanding operations, protecting confidential patient 27 Table of Contents information, and improving service levels will not be delayed or will not give rise to additional systems issues in the future.
As described further in Note 15 of the Notes to Consolidated Financial Statements, in September 2023, we entered into settlement agreements with the United States, acting through the U.S. DOJ, with respect to (1) a civil investigative demand initiated by the U.S.
As described further in Note 14 of the Notes to Consolidated Financial Statements, in September 2023, we entered into settlement agreements with the United States, acting through the U.S. DOJ, with respect to (1) a civil investigative demand initiated by the U.S.
After its initial launch, our Oncodetect test may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payers, such as Medicare and Medicaid programs and managed care organizations, and others in the medical community.
After its initial launch in April 2025, our Oncodetect test may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payers, such as Medicare and Medicaid programs and managed care organizations, and others in the medical community.
Attorney’s Offices have increased their scrutiny over the healthcare industry in recent years. The U.S. Congress, U.S.
Attorney’s Offices have increased their scrutiny over the healthcare industry in recent years. The U.S.
This loss of intellectual property protection may permit third parties to use certain intellectual property assets previously exclusively reserved for our use. We cannot assure you that any of our currently pending or future patent applications will result in issued patents, and we cannot predict how long it will take for any such patents to be issued.
This loss of intellectual property protection may permit third parties to use certain intellectual property assets previously exclusively reserved for our use. 49 Table of Contents We cannot assure you that any of our currently pending or future patent applications will result in issued patents, and we cannot predict how long it will take for any such patents to be issued.
Department of Justice (“DOJ”), Office of Inspector General of the Department of Health and Human Services, and Department of Defense have all issued subpoenas and other requests for information to conduct investigations of, and commenced, civil and criminal litigation against healthcare companies related to financial arrangements with healthcare providers, regulatory compliance, product promotional practices, and documentation, coding, and billing practices.
Congress, Department of Justice ("DOJ"), Office of Inspector General of the Department of Health and Human Services, and Department of Defense have all issued subpoenas and other requests for information to conduct investigations of, and commenced, civil and criminal litigation against healthcare companies related to financial arrangements with healthcare providers, regulatory compliance, product promotional practices, and documentation, coding, and billing practices.
The loss of a critical business partner, or a failure to perform by a critical business partner, could have a disruptive effect on our business and could adversely affect our results of operations. 28 Table of Contents Public health crises, such as the COVID-19 pandemic, have had, and could in the future have, adverse effects on our business and financial results.
The loss of a critical business partner, or a failure to perform by a critical business partner, could have a disruptive effect on our business and could adversely affect our results of operations. Public health crises, such as the COVID-19 pandemic, have had, and could in the future have, adverse effects on our business and financial results.
If these delivery services are disrupted or become significantly more expensive, customer satisfaction and our business could be negatively impacted. • The success of our business substantially depends on the efforts of our senior management team and qualified personnel. • Our business and reputation will suffer if we are unable to establish and comply with stringent quality standards to assure that the highest level of quality is observed in the performance of our tests. • Our inability to manage growth could harm our business. • We may engage in acquisitions or divestitures that are not successful and which could disrupt our business and reduce our financial resources and shareholder value. • International expansion of our business exposes us to business, regulatory, labor, political, operational, financial, liability, compliance, payment collection, and economic risks associated with doing business outside of the U.S. • Our business may be adversely affected by global macroeconomic conditions and volatility in the capital markets. • Public health crises, such as the COVID-19 pandemic, have had, and could in the future have, adverse effects on our business and financial results. • Ethical, legal, and social concerns related to the use of genetic information could reduce demand for our genetic tests. • Climate change, or legal or regulatory measures to address climate change or other corporate social responsibility and sustainability matters, could adversely affect our business, financial condition, and results of operations. • The use of Artificial Intelligence presents new risks and challenges to our business. • We may be a party to litigation in the normal course of business or otherwise, which could affect our business and financial position.
If these delivery services are disrupted or become significantly more expensive, customer satisfaction and our business could be negatively impacted. • The success of our business substantially depends on the efforts of our senior management team and our qualified personnel. • Our business and reputation will suffer if we are unable to establish and comply with stringent quality standards to assure that the highest level of quality is observed in the performance of our tests. • Our inability to manage growth could harm our business. • We may engage in acquisitions or divestitures that are not successful and which could disrupt our business and reduce our financial resources and shareholder value. • We may not be successful in achieving expected operating efficiencies and sustaining or improving operating margins and may experience business disruptions associated with restructuring and transformation activities. • International expansion of our business exposes us to business, regulatory, labor, political, operational, financial, liability, compliance, payment collection, and economic risks associated with doing business outside of the U.S. • Our business may be adversely affected by global macroeconomic conditions and volatility in the capital markets. • Public health crises, such as the COVID-19 pandemic, have had, and could in the future have, adverse effects on our business and financial results. • Ethical, legal, and social concerns related to the use of genetic information could reduce demand for our genetic tests. • Climate change, or legal or regulatory measures to address climate change or other corporate social responsibility and sustainability matters, could adversely affect our business, financial condition, and results of operations. • The use of Artificial Intelligence presents new risks and challenges to our business. • We may be a party to litigation in the normal course of business or otherwise, which could affect our business and financial position.
Any of the above-listed factors could have an adverse effect on our business, financial condition, and results of operations and our ability to meet our payment obligations under our indebtedness. 48 Table of Contents Our ability to meet our payment and other obligations under our indebtedness depends on our ability to generate significant cash flow in the future.
Any of the above-listed factors could have an adverse effect on our business, financial condition, and results of operations and our ability to meet our payment obligations under our indebtedness. Our ability to meet our payment and other obligations under our indebtedness depends on our ability to generate significant cash flow in the future.
We may be unsuccessful in our efforts to enter into, or maintain, a network contract with a given payer, and we expect that our network status with a given payer may change from time to time for a variety of reasons, many of which may be outside our control.
We may be unsuccessful in our efforts to enter into, or maintain, a network contract with a given payer, and we expect that our network status with a given payer may change from time to time for a 34 Table of Contents variety of reasons, many of which may be outside our control.
Our Oncotype tests, OncoExTra test, and certain other tests we offer are marketed as LDTs and we may seek to commercialize certain of our products in development as LDTs. LDTs are clinical laboratory tests that are developed and validated by a laboratory for its own use.
Our Oncotype, OncoExTra, Cancerguard, and Oncodetect tests and certain other tests we offer are marketed as LDTs, and we may seek to commercialize certain of our products in development as LDTs. LDTs are clinical laboratory tests that are developed and validated by a laboratory for its own use.
Litigation, whether offensive or defensive, is subject to significant uncertainty and may be expensive, time-consuming, and disruptive to our operations. Although we will vigorously defend and advocate for ourselves in such legal proceedings, their ultimate resolution and potential financial and other impacts on us are uncertain.
Litigation, whether offensive or defensive, is subject to significant uncertainty and may be expensive, time-consuming, and disruptive to our operations. 32 Table of Contents Although we will vigorously defend and advocate for ourselves in such legal proceedings, their ultimate resolution and potential financial and other impacts on us are uncertain.
Our number of full-time employees has increased from 4,800 as of December 31, 2020 to 7,000 as of December 31, 2024. As we continue to build our commercialization, marketing, and sales efforts and expand research and development activities for current and new products and services, the scope and complexity of our operations is increasing significantly.
Our number of full-time employees has increased from 4,800 as of December 31, 2020 to 7,200 as of December 31, 2025. As we continue to build our commercialization, marketing, and sales efforts and expand research and development activities for current and new products and services, the scope and complexity of our operations is increasing significantly.
Natural disasters, extreme weather, and other conditions caused by or related to climate change could adversely impact our supply chain, the courier delivery services we use, the availability and cost of raw materials and components, energy supply, water, transportation, or other inputs necessary for the operation of our business.
The effects of global climate change present risks to our business. Natural disasters, extreme weather, and other conditions caused by or related to climate change could adversely impact our supply chain, the courier delivery services we use, the availability and cost of raw materials and components, energy supply, water, transportation, or other inputs necessary for the operation of our business.
Additionally, if our Cologuard test was removed from or not 42 Table of Contents included in HEDIS, the Star Ratings, or other quality metrics, healthcare providers may not earn quality credit for prescribing our Cologuard test and therefore may be less inclined to do so.
Additionally, if our Cologuard test was removed from or not included in HEDIS, the Star Ratings, or other quality metrics, healthcare providers may not earn quality credit for prescribing our Cologuard test and therefore may be less inclined to do so.
The knowledge and experience we gained commercializing our Cologuard and precision oncology tests may not translate into successful commercialization efforts with respect these or other new products. 41 Table of Contents Although our Cologuard Plus test has demonstrated superior performance to our Cologuard test, it will nevertheless require significant effort on our part and take time to transition physicians to ordering the new test.
The knowledge and experience we gained commercializing our Cologuard and precision oncology tests may not translate into successful commercialization efforts with respect these or other new products. Although our Cologuard Plus test has demonstrated superior performance to our Cologuard test, it will nevertheless require significant effort on our part and take time to transition.
Our balance sheet includes goodwill and intangible assets that represent 57% of our total assets at December 31, 2024, which are primarily associated with our acquisitions. These assets are not amortized but reviewed for impairment at least annually, or when events or changes in the business environment indicate the carrying value not be recoverable.
Our balance sheet includes goodwill and intangible assets that represent 56% of our total assets at December 31, 2025, which are primarily associated with our acquisitions. These assets are reviewed for impairment at least annually, or when events or changes in the business environment indicate the carrying value not be recoverable.
Risk Factors” section as well as: • comments by securities analysts regarding our business or prospects; • our quarterly operating performance; • our issuance of common stock or other securities; • our inability to accurately forecast future performance; • our inability to meet analysts’ expectations; • announcements by us or our competitors, including strategic actions, management changes, and material transactions; and • general financial, domestic, international, economic, and market conditions, including overall fluctuations in the U.S. equity and credit markets, which may be unrelated or disproportionate to the operating performance of particular companies.
Risk Factors” section as well as: • the timing of, and our ability to consummate, the Merger, including any changes in factors that influence the timing and likelihood of the consummation of the Merger; • comments by securities analysts regarding our business or prospects; • our quarterly operating performance; • our issuance of common stock or other securities; • our inability to accurately forecast future performance; • our inability to meet analysts’ expectations; • announcements by us or our competitors, including strategic actions, management changes, and material transactions; and • general financial, domestic, international, economic, and market conditions, including overall fluctuations in the U.S. equity and credit markets, which may be unrelated or disproportionate to the operating performance of particular companies.
The FDA historically has taken the position that it has the authority to regulate such tests as medical devices under the FDC Act but until recently has for the most part exercised enforcement discretion and has not required clearance, de novo classification, or approval of LDTs prior to marketing.
The FDA historically has taken the position that it has the authority to regulate such tests as medical devices under the FDCA and has for the most part exercised enforcement discretion and has not required clearance, de novo classification, or approval of LDTs prior to marketing.
Complying with licensure requirements in new jurisdictions may be expensive, time-consuming, and subject us to significant and unanticipated delays. Our products could be subject to recall.
Complying with licensure requirements in new jurisdictions may be expensive, time-consuming, and subject us to significant and unanticipated delays. 35 Table of Contents Our products could be subject to recall.
If we identify material weaknesses in our internal control over financial reporting or if we are unable to assert that our internal control over financial reporting is effective when required in the future, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected. 47 Table of Contents Our stock price has fluctuated widely and is likely to continue to be volatile.
If we identify material weaknesses in our internal control over financial reporting or if we are unable to assert that our internal control over financial reporting is effective when required in the future, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected.
We have incurred losses since we were formed. From our date of inception on February 10, 1995 through December 31, 2024, we have accumulated a total deficit of approximately $4.50 billion. Our net loss was $1.03 billion, $204.1 million and $623.5 million for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively.
From our date of inception on February 10, 1995 through December 31, 2025, we have accumulated a total deficit of approximately $4.71 billion. Our net loss was $207.9 million, $1.03 billion and $204.1 million for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.
We may also be adversely affected to the extent third parties develop or commercialize competing products or services in countries where we did not apply for patents, where our patents have not issued, or where our intellectual property rights are not recognized or are poorly enforced. 46 Table of Contents We depend on trademarks to establish a market identity for our company and our products and services.
We may also be adversely affected to the extent third parties develop or commercialize competing products or services in countries where we did not apply for patents, where our patents have not issued, or where our intellectual property rights are not recognized or are poorly enforced.
Even if we were able to bring our laboratory back into compliance, we could incur significant expenses and potentially lose revenue in doing so. 32 Table of Contents We may also be subject to laboratory regulations in foreign jurisdictions as we seek to expand international utilization of our tests or as such jurisdictions adopt new licensure requirements, which may require review of our tests in order to offer them or may have other limitations such as restrictions on the transport of specimens necessary for us to perform our tests that may limit our ability to make our tests available outside of the U.S.
We may also be subject to laboratory regulations in foreign jurisdictions as we seek to expand international utilization of our tests or as such jurisdictions adopt new licensure requirements, which may require review of our tests in order to offer them or may have other limitations such as restrictions on the transport of specimens necessary for us to perform our tests that may limit our ability to make our tests available outside of the U.S.
As of December 31, 2024, we had total indebtedness of $2.60 billion consisting of aggregate principal and interest due under our convertible senior notes. We also had $4.4 million of letters of credit issued.
We have a significant amount of indebtedness. As of December 31, 2025, we had total indebtedness of $2.35 billion consisting of aggregate principal and interest due under our convertible senior notes. We also had $5.9 million of letters of credit issued.
Moreover, coverage determinations and reimbursement rates are subject to change, and we cannot guarantee that even if we initially achieve adequate coverage and reimbursement rates for our tests, they will continue to apply in the future or remain adequate as we face increases in operating costs, such as labor and supply costs that are subject to inflation, and government and commercial payers may cause us to accept lower prices. 31 Table of Contents Even where a third-party payer agrees to cover one of our tests, other factors may have a significant impact on the actual reimbursement we receive from that payer.
Moreover, coverage determinations and reimbursement rates are subject to change, and we cannot guarantee that even if we initially achieve adequate coverage and reimbursement rates for our tests, they will continue to apply in the future or remain adequate as we face increases in operating costs, such as labor and supply costs that are subject to inflation, and government and commercial payers may cause us to accept lower prices.
To maintain the value of our trademarks, we may have to file lawsuits against third parties to prevent them from using trademarks confusingly similar to or dilutive of our registered or unregistered trademarks.
We depend on trademarks to establish a market identity for our company and our products and services. To maintain the value of our trademarks, we may have to file lawsuits against third parties to prevent them from using trademarks confusingly similar to or dilutive of our registered or unregistered trademarks.
These and other ethical, legal, and social concerns may limit market acceptance of our genetic tests or reduce the potential markets for these tests, either of which could have an adverse effect on our business, financial condition or results of operations.
These and other ethical, legal, and social concerns may limit market acceptance of our genetic tests or reduce the potential markets for these tests, either of which could have an adverse effect on our business, financial condition or results of operations. 31 Table of Contents Climate change, or legal or regulatory measures to address climate change or other corporate social responsibility and sustainability matters, could adversely affect our business, financial condition, and results of operations.
Successful launches of these tests will involve a number of critical items including securing adequate reimbursement from both government and private payers, and developing effective marketing and sales programs.
The expenses associated with these launch activities were and any future launches are expected to be significant. Successful launches of these tests will involve a number of critical items including securing adequate reimbursement from both government and private payers, and developing effective marketing and sales programs.
Criminal Finances Act; and • complexity of compliance with local standard contractual requirements to access public customers and payers. Any of these factors could significantly harm our current international operations or future international expansion and, consequently, our financial condition and results of operations. Our business may be adversely affected by global macroeconomic conditions and volatility in the capital markets.
Any of these factors could significantly harm our current international operations or future international expansion and, consequently, our financial condition and results of operations. 30 Table of Contents Our business may be adversely affected by global macroeconomic conditions and volatility in the capital markets.
We are currently involved in various legal proceedings and claims that have not yet been fully resolved, and additional claims may arise in the future.
We are currently involved in various legal proceedings and claims that have not yet been fully resolved, and additional claims may arise in the future. Legal proceedings in which we are currently involved include those proceedings described in Note 14 of the Notes to Consolidated Financial Statements.
We may also be required to recognize impairment charges as a result of a divestiture. 27 Table of Contents International expansion of our business exposes us to business, regulatory, labor, political, operational, financial, liability, compliance, payment collection, and economic risks associated with doing business outside of the U.S.
International expansion of our business exposes us to business, regulatory, labor, political, operational, financial, liability, compliance, payment collection, and economic risks associated with doing business outside of the U.S.
If for any of these reasons the ACA Mandate ceases to require coverage of our Cologuard test, Cologuard Plus test, or future tests we may develop or we are otherwise unable to secure effective enforcement of such mandate, our business prospects may be adversely affected.
If for any of these reasons the ACA Mandate ceases to require coverage of our Cologuard test, Cologuard Plus test, or future tests we may develop or we are otherwise unable to secure effective enforcement of such mandate, our business prospects may be adversely affected. 45 Table of Contents The healthcare industry in the U.S. has experienced a trend toward cost containment and value-based purchasing of healthcare services.
Our Cologuard and Cologuard Plus tests are regulated by the FDA as medical device and we may develop new tests that are deemed medical devices and require FDA clearance or approval. Additionally, our current and future LDT products may be subject to some or all of the FDA medical device requirements under the LDT Rule.
Our Cologuard and Cologuard Plus tests are regulated by the FDA as medical device and we may develop new tests that are deemed medical devices and require FDA clearance or approval.
Moreover, we have limited experience forecasting our future financial performance from our new products in these industries that are newer to us, and our actual results may fall below our financial guidance or other projections, or the expectations of analysts or investors, which could cause the price of our common stock to decline.
Moreover, we have limited experience forecasting our future financial performance from our new products in these industries that are newer to us, and our actual results may fall below our financial guidance or other projections, or the expectations of analysts or investors, which could cause the price of our common stock to decline. 43 Table of Contents We may experience research and development, regulatory, marketing, and other difficulties that could delay or prevent our introduction of enhanced or new tests and result in increased costs and the diversion of management’s attention and resources from other business matters, such as from our existing product offerings.
Risks Related to our Business and Business Strategy • We may never become profitable or sustain profitability. • We may need additional capital to execute our strategic plan. • Our success depends heavily on our Screening and Precision Oncology tests and the successful commercialization of our tests in development. • Our operating results could be subject to significant fluctuation, which could increase the volatility of our stock price and cause losses to our shareholders. • We face intense competition from other companies and may not be able to compete successfully. • If any of our facilities or our laboratory equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, our ability to continue to operate our business could be materially harmed. • We heavily rely upon certain suppliers, including suppliers that are the sole source of certain supplies and products used in our tests and business operations.
Risks Related to our Business and Business Strategy • We may never become profitable or sustain profitability. • We may need additional capital to execute our strategic plan. • Our success depends heavily on our Screening and Precision Oncology tests and the successful commercialization of our tests in development. • Our operating results could be subject to significant fluctuation, which could increase the volatility of our stock price and cause losses to our shareholders. • We face intense competition from other companies and may not be able to compete successfully. • If any of our facilities or our laboratory equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, our ability to continue to operate our business could be materially harmed. • We heavily rely upon certain suppliers and other vendors, and any disruptions or failures with respect to our relationships with these counterparties could have a disruptive effect on our business. • Cyberattacks, security breaches, loss of data, and other disruptions in relation to our information technology systems, as well as those of our third-parties with whom we have business relationships, could compromise sensitive information related to our business, prevent us from accessing it and expose us to substantial liability, which could adversely affect our business and reputation. • We rely on courier delivery services to transport Cologuard collection kits to patients and samples for all of our tests back to laboratory facilities for analysis.
Accordingly, it is not clear what, if any, impact these substantive changes will ultimately have on the cost of prosecuting our patent applications, our ability to obtain patents based on our discoveries, and our ability to enforce or defend our issued patents, all of which could have a material adverse effect on our business.
Accordingly, it is not clear what, if any, impact these substantive changes will ultimately have on the cost of prosecuting our patent applications, our ability to obtain patents based on our discoveries, and our ability to enforce or defend our issued patents, all of which could have a material adverse effect on our business. 50 Table of Contents Risks Relating to our Securities If we fail to maintain an effective system of internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and our stock price may be adversely impacted.
Legal proceedings can be complex and take many months, or even years, to reach resolution, with the final outcome depending on a number of variables, some of which are not within our control. From time to time, we may also be compelled to protect our business interests through the initiation of litigation against others.
Additionally, the distribution, sale, use, and results of our tests could lead to liability claims. Legal proceedings can be complex and take many months, or even years, to reach resolution, with the final outcome depending on a number of variables, some of which are not within our control.
Risks Relating to our Securities • If we fail to maintain an effective system of internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and our stock price may be adversely impacted. • Our stock price has fluctuated widely and is likely to continue to be volatile. • We have recorded significant impairment charges and could do so again in the future • Our balance sheet includes significant amounts of goodwill and intangible assets.
Risks Relating to our Securities • If we fail to maintain an effective system of internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and our stock price may be adversely impacted. • Our stock price has fluctuated widely and, despite the pendency of the Merger, may continue to be volatile. • We have recorded significant impairment charges and could do so again in the future • Our significant indebtedness could adversely affect our business, financial condition and results of operations, and our ability to meet our payment obligations under such indebtedness and limit our ability to raise additional capital to fund our operations. 21 Table of Contents Risks Related to the Merger Failure to complete, or delays in completing, the Merger could materially and adversely affect our results of operations and our stock price.
We have collaborative and licensing arrangements with Mayo Foundation for Medical Education and Research, under which Mayo provides us with certain exclusive and non-exclusive intellectual property rights and ongoing product development and research and development assistance.
We have collaborative and licensing arrangements with Mayo Foundation for Medical Education and Research, under which Mayo provides us with certain exclusive and non-exclusive intellectual property rights and ongoing product development and research and development assistance, and with Freenome Holdings, Inc., under which we acquired exclusive rights in the United States to current and future versions of Freenome’s blood-based, CRC screening tests, subject to regulatory approval (the “Freenome Agreement”).
Payers may look to quality measures such as the NCQA, HEDIS, and the CMS Medicare Advantage Star Ratings to assess quality of care. These measures are intended to provide incentives to service providers to deliver the same or better results while consuming fewer resources.
These measures are intended to provide incentives to service providers to deliver the same or better results while consuming fewer resources. Our Cologuard test has been included in NCQA's HEDIS measures since 2017 and in CMS's Medicare Advantage Star Ratings since 2018.
The healthcare industry in the U.S. has experienced a trend toward cost containment and value-based purchasing of healthcare services. Some government and private payers are adopting pay-for-performance programs that differentiate payments for healthcare services based on the achievement of documented quality metrics, cost efficiencies, or patient outcomes.
Some government and private payers are adopting pay-for-performance programs that differentiate payments for healthcare services based on the achievement of documented quality metrics, cost efficiencies, or patient outcomes. Payers may look to quality measures such as the NCQA, HEDIS, and the CMS Medicare Advantage Star Ratings to assess quality of care.
The impairment assessment required a fair value measurement, and we determined that the fair value of the IPR&D was $420.0 million resulting in a non-cash, pre-tax impairment loss of $830.0 million.
The impairment assessment required a fair value measurement, and we determined that the fair value of the IPR&D was $420.0 million resulting in a non-cash, pre-tax impairment loss of $830.0 million. 51 Table of Contents Our significant indebtedness could adversely affect our business, financial condition and results of operations, and our ability to meet our payment obligations under such indebtedness and limit our ability to raise additional capital to fund our operations.
We may become dependent on additional single- or limited-source suppliers, or become increasingly dependent on existing suppliers, as we expand and develop our product and service pipeline. For example, our OncoExTra test is currently only validated to be performed on Illumina’s sequencing platform, and the MRD and MCED tests we expect to launch in 2025 will similarly utilize this platform.
For example, Phillips-Medisize, LLC (“Phillips”) is now our sole source provider of Cologuard test kit manufacturing and our OncoExTra test is currently only validated to be performed on Illumina’s sequencing platform, and the MRD and MCED tests we launched in 2025 will similarly utilize this platform.
If we encounter development challenges or discover errors in our products late in our development cycle, we may delay the product launch date. The expenses or losses associated with unsuccessful product development or launch activities, or a lack of market acceptance of our new products, could adversely affect our business, financial condition, or results of operations.
If we encounter development challenges or discover errors in our products late in our development cycle, we may delay the product launch date.
There is no guarantee that our collaborators will continue to be successful and, as a result, we may expend considerable time and resources developing products or services that will not ultimately be commercialized. 45 Table of Contents We may be subject to substantial costs and liability or be prevented from using technologies incorporated in our screening or diagnostic tests as a result of litigation or other proceedings relating to patent or other intellectual property rights.
We may be subject to substantial costs and liability or be prevented from using technologies incorporated in our screening or diagnostic tests as a result of litigation or other proceedings relating to patent or other intellectual property rights. Third parties may assert infringement or other intellectual property claims against our licensors, our licensees, our suppliers, our strategic partners, or us.
We have submitted data from the clinical validation study for our Oncodetect MRD test to MolDX, which identifies and establishes Medicare coverage and reimbursement for molecular diagnostic tests, but there is no guarantee we will secure such coverage and reimbursement from Medicare or other payers.
We submitted data from the clinical validation study for our Oncodetect MRD test to MolDX, and obtained Medicare reimbursement effective April 2025 for serial use in patients with stage II, III, and resectable stage IV colorectal cancer in the adjuvant and recurrence monitoring settings over a five-year period, but there is no guarantee we will secure such coverage and reimbursement from other payers.
In 2025, we are preparing to launch new screening and diagnostic tests including Cologuard Plus, our Oncodetect MRD test for patients with colorectal cancer, and our Cancerguard MCED test. The expenses associated with these launch activities are expected to be significant.
The expenses or losses associated with unsuccessful product development or launch activities, or a lack of market acceptance of our new products, could adversely affect our business, financial condition, or results of operations. 44 Table of Contents In 2025, we launched new screening and diagnostic tests including Cologuard Plus test, our Oncodetect MRD test for patients with colorectal cancer, and our Cancerguard MCED test and expect to continue to launch new products in future years.
We have already employed certain AI technologies into our business to enhance our operations, products, technology, and services and expect our use of AI to increase as the technology rapidly evolves and improves. 29 Table of Contents However, AI innovation presents risks and challenges that could impact our business. AI algorithms may be flawed.
Artificial Intelligence (“AI”) is increasingly being used across the global business landscape, including in the life sciences and healthcare industries. We have already employed certain AI technologies into our business to enhance our operations, products, technology, and services and expect our use of AI to increase as the technology rapidly evolves and improves.
In May 2024, the FDA issued the LDT Rule which amended the FDA's regulations to make explicit that LDTs are devices under the FD&C Act.
In May 2024, the FDA issued the LDT Rule which amended the FDA's regulations to make explicit that LDTs are devices under the FDCA. On March 31, 2025, the U.S. District Court in the Eastern District of Texas vacated the LDT rule, holding that LDTs are "services" and not subject to FDA regulation as “devices” under the FDCA.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Artificial Intelligence Council, which includes the CISO, oversees adherence to AI ethical principles and regulatory requirements in the development and utilization of AI systems, including generative AI tools. AI governance is integrated within the broader governance framework discussed above. The CISO provides our AFC with periodic updates about our cybersecurity program and material risks.
Biggest changeThe CISO leads the cybersecurity team consisting of experts in strategy, governance, risk management, compliance, engineering and development, security operations, and incident management. Our Artificial Intelligence Council, which includes the CISO, oversees adherence to AI ethical principles and regulatory requirements in the development and utilization of AI systems, including generative AI tools.
Through the ERM process, cybersecurity risks are presented to the executive leadership team, including the CEO and CFO, as well as reported to the AFC. Currently, we are not aware of any risks from cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company.
Through the ERM process, cybersecurity risks are presented to the executive leadership team, including the CEO and CFO, as well as reported to the AFC. Currently, we are not aware of any risks from cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company. 53 Table of Contents
Processes for managing cybersecurity risks The cybersecurity team tracks risks and incidents related to cybersecurity until the risk is mitigated to an acceptable level or fully remediated. When risks are identified, the cybersecurity team oversees mitigation plans with the risk owner. The plans communicated to necessary teams and remediation steps are taken.
Processes for managing cybersecurity risks The cybersecurity team tracks risks and incidents related to cybersecurity until the risk is mitigated to an acceptable level or fully remediated. When risks are identified, the cybersecurity team oversees mitigation plans with the risk owner, including communication of the plan and tracking of remediation efforts.
The AFC reviews and evaluates the processes utilized by management to identify and assess the material internal and external risks that may affect our business. Our AFC regularly discusses the our major risk exposures with management, legal counsel, and the internal audit department.
The AFC reviews and evaluates the processes utilized by management to identify and assess the material internal and external risks that may affect our business. Our AFC regularly discusses our major risk exposures with management, legal counsel, and the internal audit department. This includes potential financial impact on the Company and the steps taken to monitor and control those risks.
This includes updates on cybersecurity practices and projects designed to strengthen internal cybersecurity and data protection. 49 Table of Contents Risk Management and Strategy Processes for identifying and assessing cybersecurity risks The CISO, with the support of the cybersecurity team and the owners of information technology across the business, monitors current events and trends related to cybersecurity and assesses impact on current systems and operations.
Risk Management and Strategy Processes for identifying and assessing cybersecurity risks The CISO, with the support of the cybersecurity team and the owners of information technology across the business, monitors current events and trends related to cybersecurity and assesses impact on current systems and operations.
Additionally, our AFC oversees the process by which our Board of Directors is informed regarding the risks facing the Company and coordinates with our legal counsel to ensure our Board of Directors receives regular risk assessment updates from management. The Chief Information Security Officer (“CISO”) is responsible for identifying, assessing, and managing our risks from cybersecurity threats.
Annual reviews with management include summaries of legal and regulatory compliance matters, risk management activities, and cybersecurity assessments. Additionally, our AFC oversees the process by which our Board of Directors is informed regarding the risks facing the Company and coordinates with our legal counsel to ensure our Board of Directors receives regular risk assessment updates from management.
The CISO has been with the Company for three years, bringing more than 30 years of technology experience, including 15 years in cybersecurity, and has held the CISO position at other companies before joining Exact Sciences. The CISO leads the cybersecurity team consisting of experts in strategy, governance, risk management, compliance, engineering and development, security operations, and incident management.
The Chief Information Security Officer (“CISO”) is responsible for identifying, assessing, and managing our risks from cybersecurity threats. The CISO has been with the Company for three years, bringing more than 30 years of technology experience, including 15 years in cybersecurity, and has held the CISO position at other companies before joining Exact Sciences.
Removed
This includes potential financial impact on the Company and the steps taken to monitor and control those risks. Annual reviews with management include a summary of legal and regulatory compliance matters, risk management activities, and including a review of our cybersecurity program.
Added
AI governance is integrated within the broader governance framework discussed above. The CISO provides our AFC with periodic updates about our cybersecurity program and material risks. This includes updates on cybersecurity practices and projects designed to strengthen internal cybersecurity and data protection.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2024 , our material facilities are as follows: Location Primary Function Total Square Feet (approx.) Leased or Owned Madison, Wisconsin Research and development, corporate, operations, and clinical laboratory 1,566,000 Leased/Owned Redwood City, California Research and development, corporate, operations, and clinical laboratory 243,000 Leased See Note 15 in the Notes to Consolidated Financial Statements for further discussion surrounding our leased facilities.
Biggest changeProperties As of December 31, 2025 , our material facilities are as follows: Location Primary Function Total Square Feet (approx.) Leased or Owned Madison, Wisconsin Research and development, corporate, operations, and clinical laboratory 1,514,017 Leased/Owned Redwood City, California Research and development, corporate, operations, and clinical laboratory 243,195 Leased See Note 14 in the Notes to Consolidated Financial Statements for further discussion surrounding our leased facilities.
The information called for by this item is incorporated by reference to the information in Note 15 of the Notes to Consolidated Financial Statements.
The information called for by this item is incorporated by reference to the information in Note 14 of the Notes to Consolidated Financial Statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is currently listed on the NASDAQ Capital Market under the symbol “EXAS.” As of February 18, 2025, there were 185,755,406 shares of our common stock outstanding held by approximately 172 holders of record.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is currently listed on the NASDAQ Capital Market under the symbol “EXAS.” As of February 12, 2026, there were 190,888,211 shares of our common stock outstanding held by approximately 151 holders of record.
We have never paid any cash dividends on our common stock and do not plan to pay any cash dividends in the foreseeable future. See Note 14 in the Notes to Consolidated Financial Statements for further information on our stock-based compensation plans.
We have never paid any cash dividends on our common stock and do not plan to pay any cash dividends in the foreseeable future. See Note 13 in the Notes to Consolidated Financial Statements for further information on our stock-based compensation plans.
The following graph compares the cumulative total return on our common stock with the cumulative total return of the NASDAQ Composite Index and the NASDAQ Biotechnology Index for the five-year period ended December 31, 2024 .
The following graph compares the cumulative total return on our common stock with the cumulative total return of the NASDAQ Composite Index and the NASDAQ Biotechnology Index for the five-year period ended December 31, 2025 .
The graph assumes that the value of the investment in our stock and in each index was $100 on December 31, 2019 and assumes that all dividends were reinvested. _________________________________ * $100 invested on December 31, 2019 in stock or index including reinvestment of dividends. Unregistered Sales of Equity Securities Not applicable. Item 6. Reserved 51 Table of Contents
The graph assumes that the value of the investment in our stock and in each index was $100 on December 31, 2020 and assumes that all dividends were reinvested. _________________________________ * $100 invested on December 31, 2020 in stock or index including reinvestment of dividends. Unregistered Sales of Equity Securities Not applicable. Item 6. Reserved 55 Table of Contents

Item 7. Management's Discussion & Analysis

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

77 edited+42 added−31 removed27 unchanged
Biggest changeThe increase in cost of sales for the year ended December 31, 2024 was primarily due to an increase in production costs, personnel expenses, and facility and support services. This was a result of an increase in completed Cologuard and Oncotype tests and the corresponding increase in headcount and facilities related costs to support the increase in tests completed.
Biggest changeCost of sales and gross margin consisted of the following: (Amounts in thousands) 2025 % of Revenue 2024 % of Revenue $ Change % Change Cost of sales $ 984,235 30.3 % $ 840,150 30.5 % $ 144,085 17.1 % Gross profit and gross margin 2,262,755 69.7 % 1,918,717 69.5 % 344,038 17.9 % The increase in cost of sales for the year ended December 31, 2025 was primarily due to an increase in production costs, which was a result of an increase in completed Cologuard and Oncotype tests.
We evaluate the fair value of long-lived assets, which include property, plant and equipment, leases, finite-lived intangible assets, and investments in non-marketable securities, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. The review of qualitative factors requires significant judgement.
We evaluate the fair value of long-lived assets, which include property, plant and equipment, leases, finite-lived intangible assets, and investments in non-marketable securities, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. The review of qualitative factors requires significant judgment.
Our current projects primarily include the build out of certain lab automation projects at our existing facilities in Madison, WI. These projects are expected to be completed in 2025 and beyond. We also have assets under construction related to laboratory equipment, leasehold and building improvements, and software projects.
Our current projects primarily include the build out of certain lab automation projects at our existing facilities in Madison, WI. These projects are expected to be completed in 2026 and beyond. We also have assets under construction related to laboratory equipment, leasehold and building improvements, and software projects.
Refer to Note 11 and Note 18 of our Notes to Consolidated Financial Statements for further information. Capital Expenditures We expect to continue to invest in capital expenditures to support the growth of our existing products and our research and development activities.
Refer to Note 11 and Note 17 of our Notes to Consolidated Financial Statements for further information. Capital Expenditures We expect to continue to invest in capital expenditures to support the growth of our existing products and our research and development activities.
The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. We have omitted discussion of certain 2022 results where it would be redundant to the discussion previously included in Item 7.
The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. We have omitted discussion of 2023 results where it would be redundant to the discussion previously included in Item 7.
We anticipate sales and marketing expenses will generally increase in future periods as we reinvest in efforts to increase adoption of current products and support the launches of new products. We expect these expenses will continue to decrease as a percentage of revenue over time, driven by the growth of Cologuard and Oncotype testing services.
We anticipate sales and marketing expenses will generally increase in future periods as we reinvest in efforts to increase adoption of current products and support the launches of new products. We expect these expenses will decrease as a percentage of revenue over time, driven by the growth of Cologuard and Oncotype testing services. General and administrative expenses.
We expect that research and development expenses will generally continue to increase in future periods as we continue to enhance our current products and invest in our pipeline.
We expect that research and development expenses will generally continue to increase in future periods as we continue to enhance our current products and invest in our pipeline. Sales and marketing expenses.
The Revolver and Revolving Credit Agreement are further described in Note 9 and Note 21, respectively, of our Notes to Consolidated Financial Statements.
The Revolver and Revolving Credit Agreement are further described in Note 9 of our Notes to Consolidated Financial Statements.
Key assumptions used to calculate the fair value of the IPR&D asset for the quantitative assessment included inputs such as projected revenues, projected gross margin, projected operating expenses, discount rate, tax rate, obsolescence factor, and probability of commercial success. Impairment of Long-Lived Assets.
Key assumptions used to calculate the fair value of the IPR&D asset for the quantitative assessment included inputs such as projected revenues, projected gross margin, projected operating expenses, discount rate, tax rate, obsolescence factor, and probability of commercial success.
Material Cash Requirements Convertible Notes As of December 31, 2024, we had outstanding aggregate principal of $2.60 billion on our convertible notes with maturity dates of January 15, 2025 (the “2025 Notes”), March 15, 2027 (the “2027 Notes”), March 1, 2028 Notes (the “2028 Notes”), March 1, 2030 (the “2030 Notes”), and April 15, 2031 (the “2031 Notes” and collectively, the “Notes”).
Material Cash Requirements Convertible Notes As of December 31, 2025, we had outstanding aggregate principal of $2.35 billion on our convertible notes with maturity dates of March 15, 2027 (the “2027 Notes”), March 1, 2028 Notes (the “2028 Notes”), March 1, 2030 (the “2030 Notes”), and April 15, 2031 (the “2031 Notes” and collectively, the “Notes”).
Interest expense recorded from our outstanding convertible notes totaled $22.3 million, which was partially offset by a gain on settlement of convertible notes of $10.3 million, for the year ended December 31, 2024.
Interest expense recorded from our outstanding convertible notes totaled $32.9 million for the year ended December 31, 2025. Interest expense recorded from our outstanding convertible notes totaled $22.3 million, which was partially offset by a net gain on settlement of convertible notes of $10.3 million, for the year ended December 31, 2024.
Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate. Acquired Intangible Assets. We acquire finite-lived intangible assets through our business combinations and asset acquisitions, which primarily consist of developed technology. As of December 31, 2024, our developed technology intangible assets have a carrying value of $474.6 million.
Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate. Acquired Intangible Assets. We acquire finite-lived intangible assets through our business combinations and asset acquisitions, which primarily consist of developed technology. As of December 31, 2025, our developed technology intangible assets have a carrying value of $391.5 million.
Our Screening revenue primarily includes laboratory service revenue from our Cologuard and PreventionGenetics LLC (“PreventionGenetics”) tests while our Precision Oncology revenue includes laboratory service revenue from global Oncotype DX and therapy selection tests.
Results of Operations Revenue. Our Screening revenue primarily includes laboratory service revenue from our Cologuard and PreventionGenetics LLC (“PreventionGenetics”) tests while our Precision Oncology revenue includes laboratory service revenue from global Oncotype DX and therapy selection tests.
In January 2025, we entered into a senior secured revolving credit agreement (the “Revolving Credit Agreement”) with JPMorgan Chase Bank, N.A., which replaces the Revolver and provides us with access to $500.0 million on a revolving basis, including a letter of credit sublimit.
Sources of Cash In January 2025, we entered into a senior secured revolving credit agreement (the “Revolving Credit Agreement”) with JPMorgan Chase Bank, N.A., which provides us with access to $500.0 million on a revolving basis, including a letter of credit sublimit.
Given the future limitations on and expiration of certain Federal and State deferred tax assets, the recording of a valuation allowance resulted in a deferred tax liability of approximately $7.2 million remaining as of December 31, 2024, which is included in other long-term liabilities on our consolidated balance sheet.
Given the future limitations on and expiration of certain Federal and State deferred tax assets, the recording of a valuation allowance resulted in a deferred tax liability of approximately $5.8 million remaining as of December 31, 2025, which is included in other long-term liabilities on our consolidated balance sheet.
Further changes in the key assumptions made in determining the fair value of the contingent consideration liability recorded related to the acquisition of Thrive could result in a change in the estimated fair value of up to the amounts shown in the following table: 61 Table of Contents Assumption Unit of Measure Change Fair Value Impact (In Thousands) Probability of success 5% $ 14,600 Projected fiscal year of payment 1 Year 15,400 Present-value factor 1% 14,800 Impairment of Indefinite-Lived Assets.
Further changes in the key assumptions made in determining the fair value of the contingent consideration liability recorded related to the acquisition of Thrive could result in a change in the estimated fair value of up to the amounts shown in the following table: Assumption Unit of Measure Change Fair Value Impact (In Thousands) Probability of success 5% $ 16,100 Projected fiscal year of payment 1 Year 15,100 Present-value factor 1% 13,800 Impairment of Indefinite-Lived Assets.
Management has determined that a valuation allowance of $708.8 million and $465.8 million at December 31, 2024 and 2023, respectively, is necessary to reduce the tax assets to the amount that is more likely than not to be realized.
Management has determined that a valuation allowance of $736.0 million and $708.8 million at December 31, 2025 and 2024, respectively, is necessary to reduce the tax assets to the amount that is more likely than not to be realized.
We have historically recognized an upward or downward adjustment to revenues from a change in transaction price representing approximately 1% of prior year revenues. A 1% change in our estimated transaction price for revenue recognized for the year ended December 31, 2024 would result in an adjustment to revenue of approximately $27.6 million in 2025.
We have historically recognized an upward or downward adjustment to revenues from a change in transaction price representing approximately 1% of prior year revenues. A 1% change in our estimated transaction price for revenue recognized for the year ended December 31, 2025 would result in an adjustment to revenue of approximately $32.5 million in 2026.
This was primarily driven by increased Cologuard adoption by patients, providers, health systems, and payers. The increase in Precision Oncology revenue was primarily due to an increase in the number of completed Oncotype DX breast cancer tests, both domestically and internationally. This was led by an increased number of ordering providers outside the U.S., particularly in Japan.
The increase in Precision Oncology revenue was primarily due to an increase in the number of completed Oncotype DX breast cancer tests, both domestically and internationally. This increase in completed Oncotype DX breast cancer tests was led by an increased number of ordering providers outside the U.S., particularly in Japan.
We utilized the income approach to measure the fair value of the acquired developed technology intangible asset, supply agreement intangible asset, and building leases and associated leasehold improvements, which required management to make estimates including revenue projections, cash flow projections, and discount rates. We believe that the estimates applied are based on reasonable assumptions, but the estimates are inherently uncertain.
We utilized the income approach to measure the fair value of the building leases and associated leasehold improvements, which required management to make estimates including cash flow projections and discount rates. We believe that the estimates applied are based on reasonable assumptions, but the estimates are inherently uncertain.
Lease Commitments We act as lessee in our lease agreements, which include operating leases for corporate offices, laboratory space, warehouse space, vehicles, and certain laboratory and office equipment, and finance leases for certain equipment and vehicles. As of December 31, 2024, we had minimum operating and finance lease payments of $235.8 million and $23.0 million, respectively.
Lease Commitments We act as lessee in our lease agreements, which include operating leases for corporate offices, laboratory space, warehouse space, vehicles, and certain laboratory and office equipment, and finance leases for certain equipment and vehicles. As of December 31, 2025, we had minimum operating and finance lease payments of $246.2 million and $13.0 million, respectively.
In the case of some of our agreements, the right to bill and collect exists prior to the receipt of a specimen and release of a test result to the ordering healthcare provider, which results in deferred revenue.
In the case of some of our agreements, the right to bill and collect exists prior to the receipt of a specimen and release of a test result to the ordering healthcare provider, which results in deferred revenue. The deferred revenue balance is generally relieved upon the release of the applicable patient’s test result to the ordering healthcare provider.
However, we may need to raise additional capital to fully fund our current business plan and meet all commitments discussed above. We continuously evaluate our liquidity and capital resources, including access to external capital, in light of current economic and market conditions and our operational performance. As of December 31, 2024, we had no off-balance sheet arrangements.
However, we may need to raise additional capital to fully fund our current business plan and meet all commitments discussed above. We continuously evaluate our liquidity and capital resources, including access to external capital, in light of current economic and market conditions and our operational performance.
Judgment is required in evaluating our tax positions and determining our annual tax provision. We have incurred significant losses since our inception and due to the uncertainty of the amount and timing of future taxable income, it may be necessary to record an allowance to reduce the tax assets we have recognized.
We have incurred significant losses since our inception and due to the uncertainty of the amount and timing of future taxable income, it may be necessary to record an allowance to reduce the tax assets we have recognized.
The impacts to revenue related to change in transaction price are a function of differences in realized collections compared to original estimates, which includes upward adjustments stemming from optimizations in our reimbursement operations and downward adjustments from things such as payer denials. We expect continuing revenue growth for our Cologuard and Oncotype tests subject to seasonal variability.
The impacts to revenue related to change in transaction price are a function of differences in realized collections compared to original estimates, which includes upward adjustments stemming from optimizations in our reimbursement operations and downward adjustments from things such as payer denials.
We believe these points in time represent our fulfillment of our obligations to the customer. The quality of our billing operations, most notably those activities that relate to obtaining the correct information in order to bill effectively for services provided, directly impacts the collectability of our receivables and revenue estimates.
We believe this point in time represents our fulfillment of our obligation to the customer. 63 Table of Contents The quality of our billing operations, most notably those activities that relate to obtaining the correct information in order to bill effectively for services provided, directly impacts the collectability of our receivables and revenue estimates.
See Note 7 of our Notes to Consolidated Financial Statements for further information. 58 Table of Contents License Agreements We license certain technologies that are, or may be, incorporated into our technology under several license agreements, as well as the rights to commercialize certain diagnostic tests through collaboration agreements.
The projected fiscal year of payment range is from 2030 to 2031. See Note 7 of our Notes to Consolidated Financial Statements for further information. License Agreements We license certain technologies that are, or may be, incorporated into our technology under several license agreements, as well as the rights to commercialize certain diagnostic tests through collaboration agreements.
We believe that our anticipated income from operations, cash and marketable securities on hand, and borrowing capacity under our Revolving Credit Agreement will be adequate to meet our commitments for at least 12 months from the issuance of this Annual Report on Form 10-K.
We believe that our anticipated income from operations, cash and marketable securities on hand, and borrowing capacity under our Revolving Credit Agreement will be adequate to meet our commitments through the expected closing date of the Merger, or, if the Merger is not completed or is delayed beyond our expectations, for at least 12 months from the issuance of this Annual Report on Form 10-K.
The impairment charges recorded during the year ended December 31, 2024 included impairments to our IPR&D asset acquired as part of our acquisition of Thrive and building leases and corresponding leasehold improvements at certain of our domestic facilities. The impairment of the IPR&D asset is further discussed in Note 6 of our Notes to Consolidated Financial Statements.
The impairment charges recorded during the year ended December 31, 2025 related to certain of our domestic facilities and corresponding leasehold improvements. The impairment charges recorded during the year ended December 31, 2024 included impairments to our IPR&D asset acquired as part of our acquisition of Thrive and building leases and corresponding leasehold improvements at certain of our domestic facilities.
This was partially offset by a payment of $50.0 million in settlement of our previously outstanding accounts receivable securitization facility upon maturity in June 2024.
The increase in cash used in financing activities was partially offset by a payment of $50.0 million in settlement of our previously outstanding accounts receivable securitization facility upon maturity in 2024.
As a result, the eventual realized value of the IPR&D project may vary from its fair value at the date of acquisition, and material IPR&D impairment charges may occur in future periods.
As a result, the eventual realized value of the IPR&D project may vary from its fair value at the date of acquisition, and material IPR&D impairment charges may occur in future periods. As a result of the acquisition of Thrive, we recorded an IPR&D asset of $1.25 billion in January 2021.
For the year ended December 31, 2024, we elected to bypass the qualitative assessment and performed a quantitative assessment for our annual IPR&D assessment. We determined that the carrying value exceeded the fair value and recorded an impairment loss of $830.0 million.
For the year ended December 31, 2024, after performing our qualitative assessment on our IPR&D impairment test, we determined that the carrying value exceeded the fair value and recorded an impairment loss of $830.0 million.
We expect that cash, cash equivalents, and marketable securities on hand at December 31, 2024, along with cash flows generated through our operations, will be sufficient to fund our current operations for at least the next twelve months based on current operating plans.
We expect that cash, cash equivalents, and marketable securities on hand at December 31, 2025, along with cash flows generated through our operations, will be sufficient to fund our current operations through the expected closing date of the Merger, or, if the Merger is not completed or is delayed beyond our expectations, for at least the next twelve months based on current operating plans.
This was partially offset by an increase in cost of sales to support the increase in revenue as discussed in the Results of Operations section above and timing of payments on our accounts payable and accrued expenses.
This was partially offset by an increase in cost of sales to support the increase in revenue as discussed in the Results of Operations section above.
With reimbursement in place, we estimate our Oncotype DX test could help more than 100 women per day understand if their cancer is likely to recur and whether chemotherapy should be used in their treatment plan. 52 Table of Contents Results of Operations Comparison of the years ended December 31, 2024 and 2023 Revenue.
With reimbursement in place, we estimate our Oncotype DX test could help more than 100 women per day understand if their cancer is likely to recur and whether chemotherapy should be used in their treatment plan.
We expect general and administrative expenses will decrease over time as we leverage efficiencies in our personnel and information technology systems.
We expect general and administrative expenses will stabilize and decrease over time as we leverage efficiencies in our personnel, information technology systems, and the expected benefits from our multi-year productivity plan.
See Note 10 of our Notes to Consolidated Financial Statements for further information. Until the six months immediately preceding the maturity date of the applicable series of Notes, each series of Notes is convertible only upon the occurrence of certain events and during certain periods.
Until the six months immediately preceding the maturity date of the applicable series of Notes, each series of Notes is convertible only upon the occurrence of certain events and during certain periods.
Income tax benefit was $7.3 million for the year ended December 31, 2024 compared to an expense of $2.4 million for the year ended December 31, 2023. Income tax benefit for the year ended December 31, 2024 was primarily related to current foreign and state tax expense offset by a U.S. deferred tax benefit.
The income tax benefit recorded during the year ended December 31, 2024 was primarily related to current foreign and state tax expense offset by a U.S. deferred tax benefit.
As a result, the eventual realized value of the impaired asset may vary from its fair value. Recent Accounting Pronouncements See Note 1 of our consolidated financial statements included in this Annual Report on Form 10-K for the discussion of Recent Accounting Pronouncements.
As a result, the eventual realized value of the impaired asset may vary from its fair value. Recent Accounting Pronouncements See Note 1 of our Notes to Consolidated Financial Statements for the discussion of Recent Accounting Pronouncements. 65 Table of Contents
As a result of the acquisition of Thrive, we recorded an IPR&D asset of $1.25 billion in January 2021. As of December 31, 2024, the carrying value of our IPR&D asset was reduced to $420.0 million as a result of the impairment charge discussed in further detail below.
As of December 31, 2024, the carrying value of our IPR&D asset was reduced to $420.0 million as a result of the impairment charge discussed in further detail below. As of December 31, 2025, the fair value of our IPR&D asset exceeded the carrying value, and accordingly no impairment charge was recorded.
For these reasons, even if we attain profitability, our ability to utilize our NOLs may be limited, potentially significantly so. 59 Table of Contents A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before we are able to realize their benefit, or that future deductibility is uncertain.
A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before we are able to realize their benefit, or that future deductibility is uncertain.
The expected amount is typically lower than, if applicable, the agreed-upon reimbursement amount due to several factors, such as the amount of any patient co-payments, out-of-network payers, the existence of secondary payers, and claim denials.
The expected amount is typically lower than, if applicable, the agreed-upon reimbursement amount due to several factors, such as the amount of any patient co-payments, out-of-network payers, the existence of secondary payers, and claim denials. A change in the estimated transaction price derived by the aforementioned inputs would ultimately impact the amount of revenue recognized during the period.
We made payments of $45.0 million for our license of intellectual property from TwinStrand during the third quarter of 2024 compared to a cash payment of $50.0 million for our acquisition of Resolution Bioscience in the third quarter of 2023.
We also made a payment of $45.0 million for our license of intellectual property from TwinStrand during the third quarter of 2024.
The 2031 Notes have an outstanding principal balance of $620.7 million. The 2025 Notes, 2027 Notes, 2028 Notes, 2030 Notes, and 2031 Notes accrue interest at a fixed rate of 1.0%, 0.375%, 0.375%, 2.0%, and 1.750% per year, respectively, which is payable in cash semi-annually in arrears each year until the maturity date.
The 2027 Notes, 2028 Notes, 2030 Notes, and 2031 Notes accrue interest at a fixed rate of 0.375%, 0.375%, 2.0%, and 1.750% per year, respectively, which is payable in cash semi-annually in arrears each year until the maturity date. See Note 10 of our Notes to Consolidated Financial Statements for further information.
The objectives of this portfolio are to provide liquidity and safety of principal while striving to achieve the highest rate of return. Our investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer.
Our investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer.
We record a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. 60 Table of Contents We compute our provision for income taxes based on the statutory tax rates and tax planning opportunities available to us in the various jurisdictions that we operate.
We record a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
More health systems and payers are recognizing the opportunity to partner with Exact Sciences to address their screening rates and related quality measures through large, organized screening programs. We aim to partner with them to implement our Cologuard test within these programs as a solution for patients who infrequently visit their health care provider.
More health systems and payers are recognizing the opportunity to partner with Exact Sciences to address their screening rates and related quality measures through large, organized screening programs including our care cap programs.
The increase in research and development expenses was primarily due to the termination of a license agreement with The Translational Genomics Research Institute, which resulted in $25.8 million expense in the second quarter of 2024.
The increase in costs incurred to support our ongoing clinical studies was partially offset by the termination of a license agreement with The Translational Genomics Research Institute, which resulted in the recognition of $25.8 million in the second quarter of 2024.
We may raise additional capital to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons.
We may raise additional capital to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons, with certain of the foregoing actions, if we were to move forward with them, requiring Abbott's approval under the Merger Agreement.
We recorded impairment charges totaling $0.6 million during the year ended December 31, 2023 related to building leases on certain of our domestic facilities.
We recorded impairment charges totaling $7.2 million, $39.5 million, and $0.6 million during the years ended December 31, 2025, 2024, and 2023, respectively, related to certain of our domestic facilities and corresponding leasehold improvements.
The 2025 Notes have an outstanding principal balance of $249.2 million, which was settled in cash upon maturity in January 2025. The 2027 Notes have an outstanding principal balance of $563.8 million. The 2028 Notes have an outstanding principal balance of $589.4 million. The 2030 Notes have an outstanding principal balance of $573.0 million.
The 2027 Notes have an outstanding principal balance of $563.8 million. The 2028 Notes have an outstanding principal balance of $589.4 million. The 2030 Notes have an outstanding principal balance of $573.0 million. The 2031 Notes have an outstanding principal balance of $620.7 million.
The income recorded for the year ended December 31, 2024 represents the remeasurement of the contingent consideration asset from the sale of the Oncotype DX Genomic Prostate Score test (“GPS test”) to MDxHealth.
The impairment of the IPR&D asset is further discussed in Note 6 of our Notes to Consolidated Financial Statements. Other operating income. The income recorded for the year ended December 31, 2024 represents the remeasurement of the contingent consideration asset from the sale of the Oncotype DX Genomic Prostate Score test ("GPS test") to MDxHealth SA ("MDxHealth").
Generally, the license agreements require us to pay single-digit royalties and sales-based milestone payments based on net revenues received using the technologies and may require minimum royalty amounts or maintenance fees. The timing and amounts of any such royalty or milestone payments is unknown due to the uncertain nature of product development and associated net revenues using these technologies.
Generally, the license agreements require us to pay single-digit royalties and sales-based milestone payments based on net revenues received using the technologies and may require minimum royalty amounts or maintenance fees. In August 2025, we entered into a Collaboration and License Agreement with Freenome.
The net operating loss and tax credit carryforwards will expire at various dates through 2041, if not utilized. The Internal Revenue Code and applicable state laws impose substantial restrictions on a corporation’s utilization of net operating loss and tax credit carryforwards if an ownership change is deemed to have occurred.
The Internal Revenue Code of 1986, as amended, and applicable state laws impose substantial restrictions on a corporation’s utilization of net operating loss and tax credit carryforwards if an ownership change is deemed to have occurred. Additionally, tax law limitations may result in our NOLs expiring before we have the ability to use them.
A liability is recorded when achievement of a milestone becomes probable for asset acquisitions.
A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date for business combinations. A liability is recorded when achievement of a milestone becomes probable for asset acquisitions.
Additionally, tax law limitations may result in our NOLs expiring before we have the ability to use them. The Tax Cuts and Jobs Act (H.R. 1) of 2017 limits the deduction for NOLs to 80% of current year taxable income and provides for an indefinite carryover period for federal NOLs.
The Tax Cuts and Jobs Act (H.R. 1) of 2017 limits the deduction for NOLs to 80% of current year taxable income and provides for an indefinite carryover period for federal NOLs. Both provisions are applicable for losses arising in tax years beginning after December 31, 2017.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. We recorded impairment charges totaling $39.5 million during the year ended December 31, 2024 related to the closure of certain of our domestic facilities.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Contingent Consideration Certain of our business combinations and asset acquisitions involve potential payment of future consideration that is contingent upon the achievement of certain regulatory and product revenue milestones. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date for business combinations.
See Note 14 of our Notes to Consolidated Financial Statements for further information. 61 Table of Contents Contingent Consideration Certain of our business combinations and asset acquisitions involve potential payment of future consideration that is contingent upon the achievement of certain regulatory and product revenue milestones.
Due to changes in macroeconomic conditions and a delay in the projected fiscal year of payment for the regulatory and product development milestones associated with our acquisition of Thrive, the weighted average present-value factor increased from 5.8% as of December 31, 2023 to 6.2% as of December 31, 2024, and the fair value of the contingent consideration liability was remeasured from $270.1 million as of December 31, 2023 to $262.5 million as of December 31, 2024.
Due to changes in macroeconomic conditions, the weighted average present-value factor decreased from 6.2% as of December 31, 2024 to 5.5% as of December 31, 2025, and the fair value of the contingent 64 Table of Contents consideration liability was remeasured from $262.5 million as of December 31, 2024 to $289.0 million as of December 31, 2025.
Breast cancer is the most common cancer among Japanese women, with about 45,000 new diagnoses of early-stage HR+, HER2- breast cancer each year.
We have an opportunity to impact even more lives by increasing adoption of Oncotype DX tests internationally, primarily through continued adoption in Japan. Breast cancer is the most common cancer among Japanese women, with about 45,000 new diagnoses of early-stage HR+, HER2- breast cancer each year.
Gross margin decreased in 2024 primarily due to higher Cologuard test volume from organized screening programs, which have lower adherence rates. We expect that cost of sales will generally continue to increase in future periods as a result of an increase in our existing laboratory testing services and as we launch our pipeline products.
We expect that cost of sales will generally continue to increase in future periods as a result of an increase in our existing laboratory testing services and as we launch our pipeline products. We also expect to see a corresponding increase in personnel and support services associated with this growth.
Interest expense recorded from our outstanding convertible notes totaled $13.2 million, which was partially offset by a net gain on settlement of convertible notes of $10.3 million, for the year ended December 31, 2023. The convertible notes are further described in Note 10 of our Notes to Consolidated Financial Statements. Income tax benefit (expense).
The convertible notes are further described in Note 10 of our Notes to Consolidated Financial Statements. Income tax benefit (expense). Income tax expense for the year ended December 31, 2025 was primarily related to current foreign and state tax expense.
Cash, Cash Equivalents, and Marketable Securities As of December 31, 2024, we had approximately $600.9 million in unrestricted cash and cash equivalents and approximately $437.1 million in marketable securities. The majority of our investments in marketable securities consist of fixed income investments, and all are deemed available-for-sale.
Cash, Cash Equivalents, and Marketable Securities As of December 31, 2025, we had approximately $956.0 million in unrestricted cash and cash equivalents and approximately $8.7 million in marketable securities. We liquidated our portfolio of fixed income investments in the fourth quarter of 2025.
Contingent Consideration Liabilities. Business combinations may include contingent consideration to be paid based on the occurrence of future events, such as the achievement of certain development, regulatory, and sales milestones. Contingent consideration is a financial liability recorded at fair value at the acquisition date. We remeasure the fair value of outstanding contingent consideration liabilities at each reporting period.
Refer to the Impairment of Indefinite-Lived Assets section below for further discussion of the IPR&D associated with the acquisition of Thrive. Contingent Consideration Liabilities. Business combinations may include contingent consideration to be paid based on the occurrence of future events, such as the achievement of certain development, regulatory, and sales milestones.
Cash Flows (Amounts In millions) 2024 2023 Net cash provided by operating activities $ 210,536 $ 156,119 Net cash provided by (used in) investing activities (442,155) 49,679 Net cash provided by financing activities 231,874 159,766 Operating activities The increase in cash provided by operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to an increase in revenue and a decrease in certain of our operating expenses as a percentage of revenue.
Cash Flows (Amounts in thousands) 2025 2024 Net cash provided by operating activities $ 491,438 $ 210,536 Net cash provided by (used in) investing activities 195,121 (442,155) Net cash provided by (used in) financing activities (338,090) 231,874 60 Table of Contents Operating activities The increase in cash provided by operating activities was primarily due to an increase in revenue, a decrease in our operating expenses as a percentage of revenue, and timing and magnitude of our cash outflows on our accounts payable and accrued liabilities including lower disbursements related to incentive-based compensation arrangements that were accrued as of December 31, 2024.
Our contingent consideration liability is primarily due to our acquisition of Thrive, which resulted in a contingent consideration liability of $352.0 million upon acquisition.
A change in the assumptions made for probability of success, projected fiscal year of payment, and present-value factor could have a material impact on the estimated fair value. Our contingent consideration liability is primarily due to our acquisition of Thrive, which resulted in a contingent consideration liability of $352.0 million upon acquisition.
The net investment income for the year ended December 31, 2024 and 2023 was primarily due to gains recorded on our marketable and non-marketable securities. Interest expense. Interest expense increased to $27.0 million for the year ended December 31, 2024 compared to $19.4 million for the year ended December 31, 2023.
The sale of the GPS test is further discussed in Note 17 of our Note to Consolidated Financial Statements. 59 Table of Contents Investment income, net. The investment income for the years ended December 31, 2025 and 2024 was primarily due to gains recorded on our marketable and non-marketable securities. Interest expense, net.
Building on the success of the Cologuard and Oncotype DX tests, we are investing in our pipeline to develop innovative solutions for use before, during, and after a cancer diagnosis. 2025 Priorities Our top priorities for 2025 are to (1) champion our customers and team, (2) elevate our product portfolio, and (3) amplify our impact.
Overview A leading provider of cancer screening and diagnostic tests, Exact Sciences Corporation gives patients and health care professionals the clarity needed to take life-changing action earlier. Building on the success of the Cologuard and Oncotype DX tests, we are investing in our pipeline to develop innovative solutions for use before, during, and after a cancer diagnosis.
This reduction was partially offset by an increase in other general and administrative expense as a result of the change in fair value of our outstanding contingent consideration liabilities. Refer to Note 7 of our Notes to Consolidated Financial Statements for further discussion of our outstanding contingent consideration liabilities.
Refer to Note 7 of our Notes to Consolidated Financial Statements for further discussion of our outstanding contingent consideration liabilities.
The decrease in general and administrative expenses was primarily due to the settlement of certain legal matters in 2023 as further described in Note 15 of our Notes to Consolidated Financial Statements and a reduction in certain incentive-based compensation arrangements due to lower than expected revenue as discussed above.
General and administrative expenses increased primarily due to restructuring and business transformation related costs incurred as discussed in Note 15 of our Notes to Consolidated Financial Statements and an increase in certain incentive-based compensation arrangements. The increase in expenses was also attributed to the change in fair value of our outstanding contingent consideration liabilities.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2023. Overview A leading provider of cancer screening and diagnostic tests, Exact Sciences Corporation gives patients and health care professionals the clarity needed to take life-changing action earlier.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission on February 19, 2025.
Net Operating Loss Carryforwards As of December 31, 2024, we had federal, state, and foreign net operating loss (“NOL”) carryforwards of approximately $374.9 million, $65.4 million, and $12.1 million, respectively. We also had federal and state research tax credit carryforwards of approximately $82.5 million and $38.2 million, respectively.
As of December 31, 2025, we had no off-balance sheet arrangements. 62 Table of Contents Net Operating Loss Carryforwards As of December 31, 2025, we had federal, state, and foreign net operating loss (“NOL”) carryforwards of approximately $418.6 million, $66.9 million, and $10.9 million, respectively.
Investing activities The increase in cash used by investing activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due to a net increase of $482.5 million in cash used for purchases, maturities, and sales of marketable securities as a result of a change in investing strategy towards more fixed income securities compared to money market funds as money market yields have decreased.
Investing activities The increase in cash provided by investing activities was due to allocating more funds to money market accounts and reducing our investments in fixed income securities, allowing us to meet our liquidity needs for financing activities for year ended December 31, 2025, as further discussed below.
Of the outstanding operating lease obligations, $37.4 million matures in 2025, and the remaining $198.4 million will mature in periods subsequent to 2025. Of the outstanding finance lease obligations, $8.9 million matures in 2025, and the remaining $14.1 million will mature in periods subsequent to 2025. See Note 15 of our Notes to Consolidated Financial Statements for further information.
Of the outstanding operating lease obligations, $43.2 million matures in 2026, and the remaining $203.0 million will mature in periods subsequent to 2026. Of the outstanding finance lease obligations, $6.3 million matures in 2026, and the remaining $6.7 million will mature in periods subsequent to 2026.
Further changes in key assumptions made in determining the fair value of the IPR&D asset could result in a change in the estimated fair value of up to the amounts shown in the following table: Assumption Unit of Measure Change Fair Value Impact (In Thousands) Discount rate 1% $ 100,000 Total after-tax discounted cash flows 5% 21,200 Refer to the Impairment of indefinite-lived assets section below for further discussion of the IPR&D associated with the acquisition of Thrive.
Further changes in key assumptions made in determining the fair value of the IPR&D asset in 2025, including the discount rate changing by 1% or the total after-tax discounted cash flows changing by 5%, would not have resulted in an impairment charge.
The estimate of fair value contains uncertainties as it involves judgement about the likelihood and timing of achieving milestones as well as the present-value factor. A change in the assumptions made for probability of success, projected fiscal year of payment, and present-value factor could have a material impact on the estimated fair value.
Contingent consideration is a financial liability recorded at fair value at the acquisition date. We remeasure the fair value of outstanding contingent consideration liabilities at each reporting period. The estimate of fair value contains uncertainties as it involves judgment about the likelihood and timing of achieving milestones as well as the present-value factor.
We discontinued COVID-19 testing in the second quarter of 2023 due to lower demand, which led to a decrease in COVID-19 testing revenue. Adjustments to revenue recognized during the years ended December 31, 2024 and 2023 from changes in transaction price were less than 1% and 2%, respectively.
Adjustments to revenue recognized during the year relating to prior year estimates were less than 1% of revenue recorded in our consolidated statement of operations for the years ended December 31, 2025 and 2024.
Removed
Champion our Customers and Team We will enhance our world-class customer experience, expand screening access to underserved populations, and ensure Exact Sciences remains a great place to work.
Added
Recent Developments and Trends Merger Agreement On November 19, 2025, we entered into the Merger Agreement with Abbott Laboratories and Merger Sub, providing for, among other things, the Merger on the terms and subject to the conditions set forth in the Merger Agreement.
Removed
Elevate our Product Portfolio We will increase adoption of current tests, launch our Cologuard Plus, Oncodetect, and Cancerguard tests, and invest in clinical trials to enhance existing products and bring new diagnostics to patients and providers. We will also focus on improving patient adherence to screen more people.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe place our cash, cash equivalents, restricted cash, and marketable securities with high-quality financial institutions, limit the amount of credit exposure to any one institution, and have established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity. 62 Table of Contents Based on a hypothetical 100 basis point decrease in market interest rates, the potential losses in future earnings, fair value of risk-sensitive financial instruments, and cash flows are immaterial, although the actual effects may differ materially from the hypothetical analysis.
Biggest changeBased on a hypothetical 100 basis point decrease in market interest rates, the potential losses in future earnings, fair value of risk-sensitive financial instruments, and cash flows are immaterial, although the actual effects may differ materially from the hypothetical analysis.
In addition, we maintain significant amounts of cash, cash equivalents, restricted cash, and marketable securities at one or more financial institutions that are in excess of federally insured limits. Given the potential instability of financial institutions, we cannot provide assurance that we will not experience losses on these deposits.
In addition, we maintain significant amounts of cash, cash equivalents, and marketable securities at one or more financial institutions that are in excess of federally insured limits. Given the potential instability of financial institutions, we cannot provide assurance that we will not experience losses on these deposits.
While we believe our cash, cash equivalents, restricted cash, and marketable securities do not contain excessive risk, we cannot provide absolute assurance that, in the future, our investments will not be subject to adverse changes in market value.
While we believe our cash, cash equivalents, and marketable securities do not contain excessive risk, we cannot provide absolute assurance that, in the future, our investments will not be subject to adverse changes in market value.
Although the impact of currency fluctuations on our financial results has been insignificant in the past, there can be no guarantee that the impact of currency fluctuations related to our international activities will not be material in the future. 63 Table of Contents
Although the impact of currency fluctuations on our financial results has been insignificant in the past, there can be no guarantee that the impact of currency fluctuations related to our international activities will not be material in the future. 66 Table of Contents
We do not utilize interest rate hedging agreements or other interest rate derivative instruments. As of December 31, 2024, we had no outstanding variable rate debt. If we were to draw down amounts under our Revolving Loan, we would be impacted by increases in prevailing market interest rates.
We do not utilize interest rate hedging agreements or other interest rate derivative instruments. As of December 31, 2025, we had no outstanding variable rate debt. If we were to draw down amounts under our Revolving Credit Agreement, we would be impacted by increases in prevailing market interest rates.
We invest our cash, cash equivalents, and marketable securities in securities of the U.S. governments and its agencies and in investment-grade, highly liquid investments consisting of commercial paper, bank certificates of deposit, and corporate bonds, which as of December 31, 2024 and December 31, 2023 were classified as available-for-sale.
Prior to the liquidation of our marketable security portfolio in the fourth quarter of 2025, we invested our cash, cash equivalents, and marketable securities in securities of the U.S. governments and its agencies and in investment-grade, highly liquid investments consisting of commercial paper, bank certificates of deposit, and corporate bonds, which were were classified as available-for-sale as of December 31, 2024.
As of December 31, 2024, we had open foreign currency forward contracts with notional amounts of $44.2 million.
As of December 31, 2025, we had open foreign currency forward contracts with notional amounts of $31.8 million.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk Our exposure to market risk is principally confined to our cash, cash equivalents and marketable securities, and our outstanding variable-rate debt.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk Our exposure to market risk is principally confined to our cash, cash equivalents and marketable securities, and our outstanding variable-rate debt. Beginning in the fourth quarter of 2025, we invest our cash in money market securities that are highly liquid in nature.
Added
We place our cash, cash equivalents, and marketable securities with high-quality financial institutions, limit the amount of credit exposure to any one institution, and have established investment guidelines relative to diversification and maturities designed to maintain safety and liquidity.

Other EXAS 10-K year-over-year comparisons