2024Q10001124140false--12-31http://fasb.org/us-gaap/2024#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrent1xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:pureexas:positionexas:segment00011241402024-01-012024-03-3100011241402024-05-0700011241402024-03-3100011241402023-12-3100011241402023-01-012023-03-310001124140us-gaap:CommonStockMember2023-12-310001124140us-gaap:AdditionalPaidInCapitalMember2023-12-310001124140us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001124140us-gaap:RetainedEarningsMember2023-12-310001124140us-gaap:CommonStockMember2024-01-012024-03-310001124140us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001124140us-gaap:RetainedEarningsMember2024-01-012024-03-310001124140us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001124140us-gaap:CommonStockMember2024-03-310001124140us-gaap:AdditionalPaidInCapitalMember2024-03-310001124140us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001124140us-gaap:RetainedEarningsMember2024-03-3100011241402023-03-310001124140us-gaap:CommonStockMember2022-12-310001124140us-gaap:AdditionalPaidInCapitalMember2022-12-310001124140us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001124140us-gaap:RetainedEarningsMember2022-12-3100011241402022-12-310001124140us-gaap:CommonStockMember2023-01-012023-03-310001124140us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001124140us-gaap:RetainedEarningsMember2023-01-012023-03-310001124140us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001124140us-gaap:CommonStockMember2023-03-310001124140us-gaap:AdditionalPaidInCapitalMember2023-03-310001124140us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001124140us-gaap:RetainedEarningsMember2023-03-310001124140us-gaap:ConvertibleNotesPayableMember2024-01-012024-03-310001124140us-gaap:ConvertibleNotesPayableMember2023-01-012023-03-310001124140us-gaap:RestrictedStockMember2024-01-012024-03-310001124140us-gaap:RestrictedStockMember2023-01-012023-03-310001124140us-gaap:PerformanceSharesMember2024-01-012024-03-310001124140us-gaap:PerformanceSharesMember2023-01-012023-03-310001124140exas:EmployeeAndNonEmployeesStockOptionMember2024-01-012024-03-310001124140exas:EmployeeAndNonEmployeesStockOptionMember2023-01-012023-03-310001124140exas:ScreeningMemberus-gaap:ProductMember2024-01-012024-03-310001124140exas:ScreeningMemberus-gaap:ProductMember2023-01-012023-03-310001124140us-gaap:ServiceMemberexas:ScreeningMember2024-01-012024-03-310001124140us-gaap:ServiceMemberexas:ScreeningMember2023-01-012023-03-310001124140us-gaap:ProductAndServiceOtherMemberexas:ScreeningMember2024-01-012024-03-310001124140us-gaap:ProductAndServiceOtherMemberexas:ScreeningMember2023-01-012023-03-310001124140exas:ScreeningMember2024-01-012024-03-310001124140exas:ScreeningMember2023-01-012023-03-310001124140exas:PrecisionOncologyMemberus-gaap:ProductMember2024-01-012024-03-310001124140exas:PrecisionOncologyMemberus-gaap:ProductMember2023-01-012023-03-310001124140us-gaap:ServiceMemberexas:PrecisionOncologyMember2024-01-012024-03-310001124140us-gaap:ServiceMemberexas:PrecisionOncologyMember2023-01-012023-03-310001124140exas:PrecisionOncologyMemberexas:InternationalSalesMember2024-01-012024-03-310001124140exas:PrecisionOncologyMemberexas:InternationalSalesMember2023-01-012023-03-310001124140us-gaap:ProductAndServiceOtherMemberexas:PrecisionOncologyMember2024-01-012024-03-310001124140us-gaap:ProductAndServiceOtherMemberexas:PrecisionOncologyMember2023-01-012023-03-310001124140exas:PrecisionOncologyMember2024-01-012024-03-310001124140exas:PrecisionOncologyMember2023-01-012023-03-310001124140exas:COVID19TestingMember2024-01-012024-03-310001124140exas:COVID19TestingMember2023-01-012023-03-310001124140exas:VariablePriceContractMember2024-01-012024-03-310001124140exas:VariablePriceContractMember2023-01-012023-03-310001124140us-gaap:ShortTermInvestmentsMember2024-03-310001124140us-gaap:ShortTermInvestmentsMember2023-12-310001124140us-gaap:CashEquivalentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:CashEquivalentsMember2024-03-310001124140us-gaap:CorporateBondSecuritiesMemberus-gaap:ShortTermInvestmentsMember2024-03-310001124140us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:ShortTermInvestmentsMember2024-03-310001124140us-gaap:AssetBackedSecuritiesMemberus-gaap:ShortTermInvestmentsMember2024-03-310001124140us-gaap:CommercialPaperMemberus-gaap:ShortTermInvestmentsMember2024-03-310001124140us-gaap:CashEquivalentsMemberus-gaap:CommercialPaperMember2023-12-310001124140us-gaap:CashEquivalentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:CashEquivalentsMember2023-12-310001124140us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:ShortTermInvestmentsMember2023-12-310001124140us-gaap:CorporateBondSecuritiesMemberus-gaap:ShortTermInvestmentsMember2023-12-310001124140us-gaap:AssetBackedSecuritiesMemberus-gaap:ShortTermInvestmentsMember2023-12-310001124140us-gaap:CommercialPaperMemberus-gaap:ShortTermInvestmentsMember2023-12-310001124140us-gaap:CashAndCashEquivalentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:CashAndCashEquivalentsMember2024-03-310001124140us-gaap:LandMember2024-03-310001124140us-gaap:LandMember2023-12-310001124140exas:BuildingsAndLeaseholdImprovementsMember2024-03-310001124140exas:BuildingsAndLeaseholdImprovementsMember2023-12-310001124140us-gaap:LandImprovementsMember2024-03-310001124140us-gaap:LandImprovementsMember2023-12-310001124140srt:MinimumMemberus-gaap:BuildingMember2024-03-310001124140us-gaap:BuildingMembersrt:MaximumMember2024-03-310001124140us-gaap:BuildingMember2024-03-310001124140us-gaap:BuildingMember2023-12-310001124140exas:OfficeEquipmentAndComputerSoftwareMember2024-03-310001124140exas:OfficeEquipmentAndComputerSoftwareMember2023-12-310001124140srt:MinimumMemberus-gaap:EquipmentMember2024-03-310001124140us-gaap:EquipmentMembersrt:MaximumMember2024-03-310001124140us-gaap:EquipmentMember2024-03-310001124140us-gaap:EquipmentMember2023-12-310001124140srt:MinimumMemberus-gaap:FurnitureAndFixturesMember2024-03-310001124140us-gaap:FurnitureAndFixturesMembersrt:MaximumMember2024-03-310001124140us-gaap:FurnitureAndFixturesMember2024-03-310001124140us-gaap:FurnitureAndFixturesMember2023-12-310001124140us-gaap:AssetUnderConstructionMember2024-03-310001124140us-gaap:AssetUnderConstructionMember2023-12-310001124140us-gaap:ComputerSoftwareIntangibleAssetMember2024-03-310001124140us-gaap:TradeNamesMember2024-03-310001124140us-gaap:CustomerRelationshipsMember2024-03-310001124140us-gaap:PatentsMember2024-03-310001124140us-gaap:DevelopedTechnologyRightsMember2024-03-310001124140us-gaap:TradeNamesMember2023-12-310001124140us-gaap:CustomerRelationshipsMember2023-12-310001124140us-gaap:PatentsMember2023-12-310001124140us-gaap:DevelopedTechnologyRightsMember2023-12-310001124140exas:ResolutionBioscienceMember2023-01-012023-12-3100011241402023-01-012023-12-310001124140exas:ResolutionBioscienceMember2024-01-012024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001124140us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001124140us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001124140exas:ThriveAshionAndOmicEraMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-03-310001124140exas:ThriveAshionAndOmicEraMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-310001124140exas:ProductDevelopmentAndOtherMilestoneBasedPaymentsMemberexas:MeasurementInputProbabilityOfSuccessMembersrt:WeightedAverageMember2024-03-310001124140exas:ProductDevelopmentAndOtherMilestoneBasedPaymentsMemberexas:MeasurementInputProbabilityOfSuccessMembersrt:WeightedAverageMember2023-12-310001124140exas:ProductDevelopmentAndOtherMilestoneBasedPaymentsMembersrt:WeightedAverageMemberexas:MeasurementInputPresentValueFactorMember2024-03-310001124140exas:ProductDevelopmentAndOtherMilestoneBasedPaymentsMembersrt:WeightedAverageMemberexas:MeasurementInputPresentValueFactorMember2023-12-310001124140us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2023-12-310001124140exas:VentureCapitalInvestmentFundMember2024-01-012024-03-310001124140exas:VentureCapitalInvestmentFundMember2024-03-310001124140exas:VentureCapitalInvestmentFundMember2023-12-310001124140us-gaap:ForeignExchangeForwardMember2024-03-310001124140us-gaap:ForeignExchangeForwardMember2023-12-310001124140us-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001124140us-gaap:ForeignExchangeForwardMember2023-01-012023-03-310001124140exas:SecuritizedReceivablesMember2022-06-290001124140srt:MinimumMemberexas:SecuritizedReceivablesMember2022-06-290001124140exas:SecuritizedReceivablesMember2024-03-310001124140us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberexas:RevolvingLoanAgreementMember2021-11-300001124140us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberexas:RevolvingLoanAgreementMember2021-11-012021-11-300001124140us-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMemberexas:RevolvingLoanAgreementMember2021-12-012021-12-310001124140us-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMemberexas:RevolvingLoanAgreementMember2023-01-012023-01-310001124140us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberexas:RevolvingLoanAgreementMember2024-03-310001124140us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberexas:RevolvingLoanAgreementMember2023-12-310001124140exas:ConvertibleNotesPayable2030Member2024-03-310001124140exas:ConvertibleNotesPayable2030Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140exas:ConvertibleNotesPayable2028Member2024-03-310001124140us-gaap:EstimateOfFairValueFairValueDisclosureMemberexas:ConvertibleNotesPayable2028Memberus-gaap:FairValueInputsLevel2Member2024-03-310001124140exas:ConvertibleNotesPayable2027Member2024-03-310001124140exas:ConvertibleNotesPayable2027Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140exas:ConvertibleNotesPayable2025Member2024-03-310001124140exas:ConvertibleNotesPayable2025Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2024-03-310001124140exas:ConvertibleNotesPayable2030Member2023-12-310001124140exas:ConvertibleNotesPayable2030Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140exas:ConvertibleNotesPayable2028Member2023-12-310001124140us-gaap:EstimateOfFairValueFairValueDisclosureMemberexas:ConvertibleNotesPayable2028Memberus-gaap:FairValueInputsLevel2Member2023-12-310001124140exas:ConvertibleNotesPayable2027Member2023-12-310001124140exas:ConvertibleNotesPayable2027Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140exas:ConvertibleNotesPayable2025Member2023-12-310001124140exas:ConvertibleNotesPayable2025Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-12-310001124140exas:ConvertibleNotesPayable2030Member2023-03-010001124140exas:ConvertibleNotesPayable2027Member2023-03-012023-03-310001124140exas:ConvertibleNotesPayable2028Member2023-03-012023-03-310001124140exas:ConvertibleNotesPayable2030Member2023-03-012023-03-3100011241402023-03-012023-03-310001124140exas:ConvertibleNotesPayable2030Memberexas:ConvertibleNotesPayable2025Member2023-03-060001124140exas:ConvertibleNotesPayable2025Member2023-03-012023-03-310001124140exas:ConvertibleNotesPayable2025Member2023-03-012023-03-310001124140exas:ConvertibleNotesPayable2025Member2024-01-012024-03-310001124140exas:ConvertibleNotesPayable2027Member2024-01-012024-03-310001124140exas:ConvertibleNotesPayable2028Member2024-01-012024-03-310001124140exas:ConvertibleNotesPayable2030Member2024-01-012024-03-310001124140exas:ConvertibleNotesPayable2030Member2023-01-012023-03-310001124140exas:ConvertibleNotesPayable2028Member2023-01-012023-03-310001124140exas:ConvertibleNotesPayable2027Member2023-01-012023-03-310001124140exas:ConvertibleNotesPayable2025Member2023-01-012023-03-310001124140us-gaap:LicensingAgreementsMemberexas:MAYOFoundationMember2017-10-310001124140us-gaap:LicensingAgreementsMemberexas:MAYOFoundationMember2024-01-012024-03-310001124140us-gaap:LicensingAgreementsMemberexas:ThriveEarlierDetectionCorporationMember2021-01-050001124140exas:TARDISTechnologyMember2021-01-110001124140us-gaap:LicensingAgreementsMemberexas:ProductDevelopmentAndOtherMilestoneBasedPaymentsMemberexas:TheBroadInstituteLLCMember2023-06-300001124140us-gaap:LicensingAgreementsMemberexas:SalesMilestoneRangeOneMemberexas:TheBroadInstituteLLCMember2023-06-302023-06-300001124140us-gaap:LicensingAgreementsMemberexas:WatchmakerGenomicsIncMember2023-07-310001124140us-gaap:AccumulatedTranslationAdjustmentMember2023-12-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-12-310001124140us-gaap:AccumulatedTranslationAdjustmentMember2024-01-012024-03-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-01-012024-03-310001124140us-gaap:AccumulatedTranslationAdjustmentMember2024-03-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-03-310001124140us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310001124140us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-03-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-03-310001124140us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-03-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001124140us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001124140us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001124140us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001124140exas:StockBasedCompensationPlansMember2024-03-310001124140exas:StockBasedCompensationPlansMember2024-01-012024-03-310001124140exas:StockBasedCompensationPlansMember2023-12-310001124140exas:StockBasedCompensationPlansMember2023-12-312023-12-310001124140exas:StockBasedCompensationPlansMember2023-01-012023-03-310001124140exas:RestrictedStockAwardsAndRestrictedStockUnitsRSUMember2023-12-310001124140exas:RestrictedStockAwardsAndRestrictedStockUnitsRSUMember2024-01-012024-03-310001124140exas:RestrictedStockAwardsAndRestrictedStockUnitsRSUMember2024-03-310001124140us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001124140exas:RestrictedStockAwardsAndRestrictedStockUnitsRSUMember2023-01-012023-03-310001124140us-gaap:PerformanceSharesMember2023-12-310001124140us-gaap:PerformanceSharesMember2024-01-012024-03-310001124140us-gaap:PerformanceSharesMember2024-03-310001124140us-gaap:PerformanceSharesMember2023-01-012023-03-310001124140exas:AmendedWisconsinEconomicDevelopmentTaxCreditAgreementMember2021-12-310001124140exas:AmendedWisconsinEconomicDevelopmentTaxCreditAgreementMember2021-12-012021-12-310001124140exas:AmendedWisconsinEconomicDevelopmentTaxCreditAgreementMember2024-03-310001124140exas:AmendedWisconsinEconomicDevelopmentTaxCreditAgreementMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2024-03-310001124140exas:AmendedWisconsinEconomicDevelopmentTaxCreditAgreementMemberus-gaap:OtherNoncurrentAssetsMember2024-03-310001124140country:US2024-01-012024-03-310001124140country:US2023-01-012023-03-310001124140us-gaap:NonUsMember2024-01-012024-03-310001124140us-gaap:NonUsMember2023-01-012023-03-310001124140us-gaap:SubsequentEventMemberexas:ConvertibleNotesPayable2031Member2024-04-170001124140us-gaap:SubsequentEventMemberexas:ConvertibleNotesPayable2028Member2024-04-012024-04-300001124140us-gaap:SubsequentEventMemberexas:ConvertibleNotesPayable2031Member2024-04-012024-04-300001124140us-gaap:SubsequentEventMember2024-05-01

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Exact name of registrant as specified in its charter)

(608) 535-8815 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

EXAS

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒			Accelerated filer			☐
Non-accelerated filer			☐			Smaller reporting company			☐
Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2024, the registrant had 184,529,721 shares of common stock outstanding.

Part I — Financial Information

Exact Sciences Corporation (together with its subsidiaries, “Exact,” or the “Company”) was incorporated in February 1995. A leading provider of cancer screening and diagnostic tests, Exact Sciences 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, Exact Sciences is investing in its pipeline to develop innovative solutions for use before, during, and after a cancer diagnosis.

The accompanying condensed consolidated financial statements, which include the accounts of the Company and those of its wholly owned subsidiaries and variable interest entities, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K (the “2023 Form 10-K”). All intercompany transactions and balances have been eliminated upon consolidation. These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States of America (“U.S.”) and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair statement of its financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2023 has been derived from audited financial statements, but does not contain all of the footnote disclosures from the 2023 Form 10-K. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited financial statements and related notes included in the 2023 Form 10-K.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that affect the Company’s financial statements materially and involve difficult, subjective or complex judgments by management, and actual results could differ from those estimates. These estimates include revenue recognition, valuation of intangible assets and goodwill, contingent consideration, and accounting for income taxes. The Company’s critical accounting policies and estimates are explained further in the notes to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q and the 2023 Form 10-K.

During the three months ended March 31, 2024, there were no changes to the Company’s significant accounting policies as described in the Company’s 2023 Form 10-K, except as described in the Recently Adopted Accounting Pronouncements sections below.

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-02: Codification Improvement – Amendments to Remove References to the Concepts Statements. This update amends the Accounting Standards Codification (“ASC”) to remove references to various FASB Concepts Statements. The Company early adopted and prospectively applied the amendments in this update during the first quarter of fiscal year 2024. There was no significant impact to the Company’s condensed consolidated financial statements.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This update modifies the disclosure or presentation requirements of a variety of topics in the ASC to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification. The amendments in this update should be applied prospectively, and the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or S-K becomes effective. However, if the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update improves reportable segment disclosure requirements, primarily through enhanced disclosures of significant segment expenses. The amendments in this update should be applied retrospectively to all prior periods presented in the consolidated financial statements and are effective for fiscal years beginning after December 31, 2023 and interim periods within fiscal years beginning after December 31, 2024. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. This update improves income tax disclosure requirements, primarily through enhanced transparency and decision usefulness of disclosures. The amendments in this update should be applied prospectively with the option to apply retrospectively and are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.

Basic net loss per common share (“EPS”) was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share is the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive as a result of the Company’s losses.

The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect:

The Company’s revenue is primarily generated by its laboratory testing services utilizing its Cologuard and Oncotype® tests. The services are considered completed upon release of a patient’s test result to the ordering healthcare provider.

The following table presents the Company’s revenues disaggregated by revenue source:

Screening revenue primarily includes laboratory service revenue from Cologuard and Prevention Genetics, LLC (“PreventionGenetics”) tests while Precision Oncology revenue primarily includes laboratory service revenue from global Oncotype DX and therapy selection tests.

At each reporting period end, the Company conducts an analysis of the estimates used to calculate the transaction price to determine whether any new information available impacts those estimates made in prior reporting periods. Adjustments to revenue recognized during the period relating to prior period estimates were less than 1% and 2% of revenue recorded in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2024 and 2023, respectively.

The Company’s deferred revenue, which is reported in other current liabilities in the Company’s condensed consolidated balance sheets, was not significant as of March 31, 2024 and December 31, 2023.

Revenue recognized for the three months ended March 31, 2024 and 2023 that was included in the deferred revenue balance at the beginning of the period was not significant.

The following table sets forth the Company’s cash, cash equivalents, and marketable securities at March 31, 2024 and December 31, 2023:

Available-for-sale debt securities, including the classification within the condensed consolidated balance sheet at March 31, 2024, consisted of the following:

______________

(1)There was no tax impact from the gains and losses in accumulated other comprehensive income (loss) (“AOCI”).

Available-for-sale debt securities, including the classification within the condensed consolidated balance sheet at December 31, 2023, consisted of the following:

______________

(1)There was no tax impact from the gains and losses in AOCI.

The following table summarizes contractual underlying maturities of the Company’s available-for-sale debt securities at March 31, 2024:

The following table summarizes the gross unrealized losses and fair values of available-for-sale debt securities in an unrealized loss position as of March 31, 2024 aggregated by investment category and length of time those individual securities have been in a continuous unrealized loss position:

The Company evaluates investments that are in an unrealized loss position for impairment as a result of credit loss. It was determined that no credit losses exist as of March 31, 2024 and December 31, 2023 because the change in market value for those securities in an unrealized loss position resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers.

The gains and losses recorded on available-for-sale debt securities and equity securities are included in investment income, net in the Company’s condensed consolidated statements of operations. The gains and losses recorded were not material for the three months ended March 31, 2024 and 2023.

Inventory consisted of the following:

The carrying value and estimated useful lives of property, plant and equipment are as follows:

______________

(1)Lesser of remaining lease term, building life, or estimated useful life.

Depreciation expense for the three months ended March 31, 2024 and 2023 was $30.6 million and $26.8 million, respectively.

At March 31, 2024, the Company had $109.9 million of assets under construction, which consisted of $56.0 million in machinery and equipment, $40.5 million in capitalized costs related to software projects, $8.1 million in leasehold and building improvements, $5.2 million related to buildings, and minimal furniture and fixtures. Depreciation will begin on these assets once they are placed into service upon completion.

The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of March 31, 2024:

The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of December 31, 2023:

______________

(1)The gross carrying amount includes an insignificant foreign currency translation adjustment related to the intangible asset acquired as a result of the acquisition of OmicEra Diagnostics GmbH (“OmicEra”).

As of March 31, 2024 the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows:

The Company’s acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives.

There were no impairment losses recorded on finite-lived intangible assets during the three months ended March 31, 2024 and 2023.

The change in the carrying amount of goodwill for the periods ended March 31, 2024 and December 31, 2023 is as follows:

______________

(1)Represents the impact of foreign currency translation related to the goodwill acquired as a result of the acquisition of OmicEra.

There were no impairment losses for the three months ended March 31, 2024 and 2023.

The three levels of the fair value hierarchy established are as follows:

Level 1    Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2    Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3    Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.

The following table presents the Company’s fair value measurements as of March 31, 2024 along with the level within the fair value hierarchy in which the fair value measurements, in their entirety, fall.

The following table presents the Company’s fair value measurements as of December 31, 2023 along with the level within the fair value hierarchy in which the fair value measurements, in their entirety, fall.

(In thousands)						Fair Value at December 31, 2023						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash, cash equivalents and restricted cash
Cash and money market						$	530,100					$	530,100					$	—					$	—
Commercial paper						72,243						—						72,243						—
Restricted cash (1)						4,297						4,297						—						—
U.S. government agency securities						3,035						—						3,035						—
Marketable securities
U.S. government agency securities						$	56,716					$	—					$	56,716					$	—
Corporate bonds						55,828						—						55,828						—
Asset backed securities						34,897						—						34,897						—
Commercial paper						20,984						—						20,984						—
Equity securities						3,841						3,841						—						—
Non-marketable securities						$	7,650					$	—					$	—					$	7,650
Liabilities
Contingent consideration						$	(288,657)					$	—					$	—					$	(288,657)
Total						$	500,934					$	538,238					$	243,703					$	(281,007)

_________________________________

(1)Restricted cash primarily represents cash held by a third-party financial institution as part of a cash collateral agreement related to the Company’s credit card program. The restrictions will lapse upon the termination of the agreements or the removal of the cash collateral requirement by the third-parties.

There have been no changes in valuation techniques or transfers between fair value measurement levels during the three months ended March 31, 2024. The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities are valued using a third-party pricing agency where the valuation is based on observable inputs including pricing for similar assets and other observable market factors.

The Company has elected the fair value option under the income approach to measure certain Level 3 non-marketable securities. Gains and losses recorded on non-marketable securities are included in investment income, net in the condensed consolidated statement of operations. The following table provides a reconciliation of the beginning and ending balances of non-marketable securities valued using the fair value option:

The fair value of the contingent consideration liabilities was $294.3 million and $288.7 million as of March 31, 2024 and December 31, 2023, respectively, of which $21.7 million was included in other current liabilities and $272.6 million was included in other long-term liabilities in the condensed consolidated balance sheet as of March 31, 2024. The contingent consideration liabilities were included in other long-term liabilities as of December 31, 2023.

The following table provides a reconciliation of the beginning and ending balances of contingent consideration:

______________

(1)The change in fair value of the contingent consideration liability was a reduction of $8.9 million for the three months ended March 31, 2023, which is included in general and administrative expenses in the condensed consolidated statement of operations.

This fair value measurement of contingent consideration is categorized as a Level 3 liability, as the measurement amount is based primarily on significant inputs not observable in the market.

The fair value of the contingent consideration liabilities recorded from the Company’s acquisitions of Thrive Earlier Detection Corporation (“Thrive”), Ashion Analytics, LLC (“Ashion”), and OmicEra related to regulatory and product development milestones was $294.3 million and $288.7 million as of March 31, 2024 and December 31, 2023, respectively. The Company evaluates the fair value of the expected contingent consideration and the corresponding liabilities related to the regulatory and product development milestones using the probability-weighted scenario based discounted cash flow model, which is consistent with the initial measurement of the expected contingent consideration liabilities. Probabilities of success are applied to each potential scenario and the resulting values are discounted using a present-value factor. The passage of time in addition to changes in projected milestone achievement timing, present-value factor, the degree of achievement, if applicable, and probabilities of success may result in adjustments to the fair value measurement. The fair value of the contingent consideration liability recorded related to regulatory and product development milestones was determined using a weighted average probability of success of 90% and 89% as of March 31, 2024 and December 31, 2023, respectively, and a weighted average present-value factor of 6.0% and 5.8% as of March 31, 2024 and December 31, 2023, respectively. The projected fiscal year of payment range is from 2024 to 2030. Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.

The revenue milestone associated with the Ashion acquisition is not expected to be achieved and therefore no liability has been recorded for this milestone.

Non-marketable equity securities without readily determinable fair values, which are classified as a component of other long-term assets, net, had the following cumulative upward and downward adjustments and aggregate carrying amounts:

(In thousands)						March 31, 2024						March 31, 2023
Cumulative upward adjustments (1)						$	5,100					$	800
Cumulative downward adjustments and impairments (2)						15,100						11,234
Aggregate carrying value (3)						45,968						39,428

_________________________________

(1)    There were no upward adjustments recorded on non-marketable equity securities held for the three months ended March 31, 2024 and 2023, respectively.

(2)    There were no downward adjustments and impairments recorded on non-marketable equity securities held for the three months ended March 31, 2024. Downward adjustments and impairments recorded on non-marketable equity securities held were $0.4 million for the three months ended March 31, 2023.

(3)    The aggregate carrying value of non-marketable equity securities was $46.0 million as of December 31, 2023.

There were no realized gains or losses recorded during the three and months ended March 31, 2024 and 2023.

The Company has committed capital to venture capital investment funds (the “Funds”) of $18.0 million, of which $12.4 million remained callable through 2033 as of March 31, 2024. The aggregate carrying amount of the Funds, which are classified as a component of other long-term assets, net in the Company’s condensed consolidated balance sheets, were $5.4 million and $5.2 million as of March 31, 2024 and December 31, 2023, respectively.

The Company enters into foreign currency forward contracts on the last day of each month to mitigate the impact of adverse movements in foreign exchange rates related to the remeasurement of monetary assets and liabilities and hedge the Company’s foreign currency exchange rate exposure. As of March 31, 2024 and December 31, 2023 the Company had open foreign currency forward contracts with notional amounts of $46.2 million and $39.5 million, respectively. The Company's foreign exchange derivative instruments are classified as Level 2 within the fair value hierarchy as they are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. The fair value of the open foreign currency forward contracts was zero at March 31, 2024 and December 31, 2023 and there were no gains or losses recorded to adjust the fair value of the open foreign currency contract held as of March 31, 2024. The contracts are closed subsequent to each month-end, and the gains and losses recorded from the contracts were not significant for the three months ended March 31, 2024 and 2023.

On June 29, 2022, the Company, through a wholly-owned special purpose entity, Exact Receivables LLC (“Exact Receivables”) entered into an accounts receivable securitization program (the “Securitization Facility”) with PNC Bank, National Association (“PNC”), with a scheduled maturity date of June 29, 2024. The Securitization Facility provides Exact Receivables with a revolving line-of-credit of up to $150.0 million of borrowing capacity, subject to certain borrowing base requirements, by collateralizing a security interest in the domestic customer accounts receivable of certain wholly-owned subsidiaries of the Company. The amount available under the Securitization Facility fluctuates over time based on the total amount of eligible customer accounts receivable generated by the Company during the normal course of operations. The Securitization Facility requires the Company to maintain minimum borrowings under the facility of $50.0 million. The debt issuance costs incurred related to the Securitization Facility were not significant and are being amortized over the life of the Securitization Facility through interest expense within the condensed consolidated statements of operations.

In connection with the Securitization Facility, the Company also entered into two Receivables Purchase Agreements (“Receivable Purchase Agreements”) on June 29, 2022. The Receivable Purchase Agreements are among the Company and certain wholly-owned subsidiaries of the Company, and between the Company and Exact Receivables. Under the agreements, the wholly-owned subsidiaries sell all of their right, title and interest in their accounts receivables to Exact Receivables. The receivables are used to collateralize borrowings made under the Securitization Facility. The Company retains the responsibility of servicing the accounts receivable balances pledged as collateral under the Securitization Facility and provides a performance guaranty.

As of March 31, 2024, the eligible borrowing base under the Securitization Facility was $123.7 million of which the Company elected to collateralize $50.0 million. As of March 31, 2024 and December 31, 2023, the Company had an outstanding balance of $50.0 million, which is included in debt, current portion on the Company’s condensed consolidated balance sheets. The outstanding balance accrues interest at a rate equal to a daily secured overnight financing rate (“SOFR”) rate plus a SOFR adjustment and an applicable margin. The interest rate was 6.87% at March 31, 2024.

During November 2021, the Company entered into a revolving loan agreement (the “Revolving Loan Agreement”) with PNC. The Revolving Loan Agreement provides the Company with a revolving line of credit of up to $150.0 million (the “Revolver”). The Revolver is collateralized by the Company’s marketable securities held by PNC, which must continue to maintain a minimum market value of $150.0 million. The Revolver is available for general working capital purposes and all other lawful corporate purposes. In addition, the Company may request, in lieu of cash advances, letters of credit with an aggregate stated amount outstanding not to exceed $20.0 million. The availability of advances under the line of credit will be reduced by the stated amount of each letter of credit issued and outstanding.

Borrowings under the Revolving Loan Agreement accrue interest at an annual rate equal to the sum of the daily Bloomberg Short-Term Bank Yield Index Rate plus the applicable margin of 0.60%. Loans under the Revolving Loan Agreement may be prepaid at any time without penalty. In October 2022, the Revolving Loan Agreement was amended to extend the maturity date from November 5, 2023 to November 5, 2025. There were no other amendments to the Revolver.

The Company has agreed to various financial covenants under the Revolving Loan Agreement, and as of March 31, 2024, the Company is in compliance with all covenants.

In December 2021 and January 2023, PNC issued a letters of credit of $2.9 million and $1.5 million, respectively, which reduced the amount available for cash advances under the line of credit to $145.6 million as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company has not drawn funds from, nor are any amounts outstanding under, the Revolving Loan Agreement.

Convertible note obligations included in the condensed consolidated balance sheet consisted of the following as of March 31, 2024:

Convertible note obligations included in the condensed consolidated balance sheet consisted of the following as of December 31, 2023:

______________

(1)The fair values are based on observable market prices for this debt, which is traded in less active markets and therefore is classified as a Level 2 fair value measurement.

(2)The Company’s convertible notes due in 2025 (the “2025 Notes”) mature on January 15, 2025 and are included in convertible notes, net, current portion on the condensed consolidated balance sheet as of March 31, 2024. The 2025 Notes were included in convertible notes, net, less current portion as of December 31, 2023.

In February 2023, the Company entered into a privately negotiated exchange and purchase agreement with a single holder of certain of the Company’s convertible notes due in 2027 (the “2027 Notes”) and 2028 (the “2028 Notes”). The Company issued the holder $500.0 million aggregate principal amount of 2.0% Convertible Notes due in 2030 (the “2030 Notes” and, collectively with the 2025 Notes, 2027 Notes, and 2028 Notes, the “Notes”) in exchange for $183.7 million of aggregate principal of 2027 Notes, $201.0 million of aggregate principal of 2028 Notes, and $138.0 million of cash. The extinguishment resulted in a gain on settlement of convertible notes of $17.7 million, which is included in interest income (expense), net in the condensed consolidated statement of operations for the three months ended March 31, 2023. The gain represents the difference between (i) the fair value of the consideration transferred and (ii) the carrying value of the debt at the time of exchange.

In March 2023, the Company entered into a privately negotiated exchange agreement with two holders of certain of the 2025 Notes. The Company issued the holder $73.0 million aggregate principal amount of 2030 Notes in exchange for $65.8 million of aggregate principal of 2025 Notes. The extinguishment resulted in a loss on settlement of convertible notes of $7.4 million, which is included in interest income (expense), net in the condensed consolidated statement of operations for the three months ended March 31, 2023. The loss represents the difference between (i) the fair value of the consideration transferred and (ii) the carrying value of the debt at the time of exchange.

The net proceeds from the issuance of the 2030 Notes were approximately $133.0 million, after deducting commissions and offering expenses payable by the Company.

The 2030 Notes will mature on March 1, 2030 and bear interest at a rate of 2.0% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2023.

Until the six-months immediately preceding the maturity date of the applicable series of the Company’s convertible notes (the “Notes”), each series of Notes is convertible only upon the occurrence of certain events and during certain periods, as set forth in the Indentures filed at the time of the original offerings. On or after the date that is six-months immediately preceding the maturity date of the applicable series of Notes until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert such Notes at any time. The Notes will be convertible into cash, shares of the Company’s common stock (plus, if applicable, cash in lieu of any fractional share), or a combination of cash and shares of the Company’s common stock, at the Company’s election.

It is the Company’s intent and policy to settle all conversions through combination settlement. The initial conversion rate is 13.26, 8.96, 8.21, and 12.37 shares of common stock per $1,000 principal amount for the 2025 Notes, 2027 Notes, 2028 Notes, and 2030 Notes, respectively, which is equivalent to an initial conversion price of approximately $75.43, $111.66, $121.84, and $80.83 per share of the Company’s common stock for the 2025 Notes, 2027 Notes, 2028 Notes, and 2030 Notes, respectively. The 2025 Notes, 2027 Notes, 2028 Notes, and 2030 Notes are potentially convertible into up to 3.3 million, 5.0 million, 7.8 million, and 7.1 million shares, respectively. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the Indentures filed at the time of the original offerings but will not be adjusted for accrued and unpaid interest. In addition, holders of the Notes who convert their Notes in connection with a “make-whole fundamental change” (as defined in the Indentures), will, under certain circumstances, be entitled to an increase in the conversion rate.

If the Company undergoes a “fundamental change” (as defined in the Indentures), holders of the Notes may require the Company to repurchase for cash all or part of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest.

Based on the closing price of the Company’s common stock of $69.06 on March 31, 2024, the if-converted values on the Notes do not exceed the principal amount.

The Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness, or the issuance or repurchase of securities by the Company.

The Notes are the Company’s senior unsecured obligations and (i) rank senior in right of payment to all of its future indebtedness that is expressly subordinated in right of payment to the Notes; (ii) rank equal in right of payment to each outstanding series thereof and to all of the Company’s future liabilities that are not so subordinated, unsecured indebtedness; (iii) are effectively junior to all of the Company’s existing and future secured indebtedness and other secured obligations, to the extent of the value of the assets securing that indebtedness and other secured obligations; and (iv) are structurally subordinated to all indebtedness and other liabilities of the Company’s subsidiaries.

Issuance costs are amortized to interest expense over the term of the Notes. The following table summarizes the original issuance costs at the time of issuance for each set of Notes:

Interest expense on the Notes includes the following:

The following table summarizes the effective interest rates of the Notes:

The remaining period over which the unamortized debt discount will be recognized as non-cash interest expense is 0.79, 2.96, 3.92, and 5.92 years for the 2025 Notes, 2027 Notes, 2028 Notes, and 2030 Notes, respectively.

The Company licenses certain technologies that are, or may be, incorporated into its technology under several license agreements, as well as the rights to commercialize certain diagnostic tests through collaboration agreements. Generally, the license agreements require the Company to pay single-digit royalties based on net revenues received using the technologies and may require minimum royalty amounts, milestone payments, or maintenance fees.

In June 2009, the Company entered into an exclusive, worldwide license agreement with the Mayo Foundation for Medical Education and Research (“Mayo”), under which Mayo granted the Company 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. The scope of the license covers any screening, surveillance or diagnostic test or tool for use in connection with any type of cancer, pre-cancer, disease or condition. The Company’s license agreement with Mayo was most recently amended and restated in September 2020.

The licensed Mayo patents and patent applications contain both method and composition claims that relate to sample processing, analytical testing and data analysis associated with nucleic acid screening for cancers and other diseases. The jurisdictions covered by these patents and patent applications include the U.S., Australia, Canada, the European Union, China, Japan and Korea. Under the license agreement, the Company assumed the obligation and expense of prosecuting and maintaining the licensed Mayo patents and is obligated to make commercially reasonable efforts to bring to market products using the licensed Mayo intellectual property.

Pursuant to the Company’s agreement with Mayo, the Company is required to pay Mayo a low-single-digit royalty on the Company’s net sales of current and future products using the licensed Mayo intellectual property each year during the term of the Mayo agreement.

The Company is also required to pay Mayo up to $3.0 million in sales-based milestone payments upon cumulative net sales of each product using the licensed Mayo intellectual property reaching specified levels.

The license agreement will remain in effect, unless earlier terminated by the parties in accordance with the agreement, until the last of the licensed patents expires in 2039 (or later, if certain licensed patent applications are issued). However, if the Company is still using the licensed Mayo know-how or certain Mayo-provided biological specimens or their derivatives on such expiration date, the term shall continue until the earlier of the date the Company stops using such know-how and materials and the date that is five years after the last licensed patent expires. The license agreement contains customary termination provisions and permits Mayo to terminate the license agreement if the Company sues Mayo or its affiliates, other than any such suit claiming an uncured material breach by Mayo of the license agreement.

In addition to granting the Company a license to the covered Mayo intellectual property, Mayo provides the Company with product development and 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 connection with this collaboration, the Company has incurred insignificant charges for the three months ended March 31, 2024 and 2023, respectively. The charges incurred in connection with this collaboration are recorded in research and development expenses in the Company’s condensed consolidated statements of operations.

Through the acquisition of Thrive, the Company acquired a worldwide exclusive license agreement with Johns Hopkins University (“JHU”) for use of several JHU patents and licensed know-how. The license is designed to enable the Company to leverage JHU proprietary data in the development and commercialization of a blood-based, multi-cancer screening test. The agreement terms would require the Company to pay single-digit sales-based royalties and up to $45.0 million in sales-based milestone payments if net sales of a licensed product using JHU proprietary data reach specified levels. The Company will record the sales-based royalties and sales-based milestones once achievement is deemed probable. The Company has not incurred charges related to the achievement of any sales-based royalties or sales-based milestones as of March 31, 2024.

In January 2021, the Company entered into an exclusive, worldwide license to the proprietary TARDIS technology from The Translational Genomics Research Institute (“TGen”). Under the agreement, the Company acquired a royalty-free, worldwide exclusive license to proprietary TARDIS patents and know-how. Under the agreement, the Company is obligated to make milestone payments to TGen of up to $45.0 million in sales-based milestone payments upon cumulative net sales related to molecular residual disease (“MRD”) detection and/or treatment reaching specified levels. These payments are contingent upon achievement of these cumulative revenues on or before December 31, 2030. The Company will record the sales milestones once achievement is deemed probable. The Company has not incurred charges related to the achievement of sales milestones as of March 31, 2024.

In June 2023, the Company entered into an exclusive license agreement with Broad Institute, Inc. (“Broad Institute”) to utilize the Minor Allele Enriched Sequencing Through Recognition Oligonucleotides (“MAESTRO”) technology in the Company’s MRD testing. Under the license agreement, the Company is obligated to make development milestone payments to Broad Institute of up to $6.5 million upon achievement of certain development milestones related to prospective MRD tests that use the MAESTRO technology. In addition, the Company is obligated to make sales-based milestone payments to Broad Institute that equate up to a mid-single-digit royalty upon the achievement of certain cumulative net sales targets of licensed products using the MAESTRO technology beginning at $500.0 million. The Company will record the development milestones once achieved and the sales milestones once achievement is deemed probable. The Company has not incurred charges related to the achievement of development milestones or sales milestones as of March 31, 2024.

In July 2023, the Company entered into a co-exclusive development and license agreement with Watchmaker Genomics, Inc. (“Watchmaker”) under which the Company granted Watchmaker a co-exclusive license to the non-bisulfite technology for the detection of methylated DNA and other epigenetic modifications (“TAPS”). TAPS is based on patents obtained by the Company through an exclusive license agreement with the Ludwig Institute for Cancer Research. Under the agreement, both parties have the right to use and develop TAPS for commercial purposes. The Company has the potential to receive up to $82.0 million in sales-based milestone payments and mid-single digit royalties based on future Watchmaker net sales of licensed products including TAPS. Additionally, Watchmaker has the right to sublicense TAPS, and the Company has the potential to receive royalties based on future Watchmaker sublicense receipts.

The amounts recognized in AOCI for the three months ended March 31, 2024 were as follows:

______________

(1)There was no tax impact from the amounts recognized in AOCI for the three months ended March 31, 2024.

The amounts recognized in AOCI for the three months ended March 31, 2023 were as follows:

(In thousands)						Cumulative Translation Adjustment						Unrealized Gain (Loss) on Securities (1)						AOCI
Balance at December 31, 2022						$	53					$	(5,289)					$	(5,236)
Other comprehensive loss before reclassifications						550						2,289						2,839
Amounts reclassified from accumulated other comprehensive income (loss)						—						678						678
Net current period change in accumulated other comprehensive income (loss)						550						2,967						3,517
Balance at March 31, 2023						$	603					$	(2,322)					$	(1,719)

______________

(1)There was no tax impact from the amounts recognized in AOCI for the three months ended March 31, 2023.

Amounts reclassified from AOCI for the three months ended March 31, 2024 and 2023 were as follows:

The Company maintains the following plans for which awards were granted from or had awards outstanding in 2023: the 2010 Omnibus Long-Term Incentive Plan (as Amended and Restated effective July 27, 2017), the 2019 Omnibus Long-Term Incentive Plan, and the 2010 Employee Stock Purchase Plan. These plans are collectively referred to as the “Stock Plans” and are administered in conjunction with the Company’s Equity Award Death, Disability and Retirement Policy, which was adopted in February 2023. Refer to the Company’s 2023 Form 10-K for further information regarding this policy.

The Company records stock-based compensation expense in connection with the amortization of restricted stock and restricted stock unit awards (“RSUs”), performance share units (“PSUs”), stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors. The Company recorded $60.4 million and $49.1 million in stock-based compensation expense during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there was approximately $520.8 million of expected total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under all equity compensation plans. The Company expects to recognize that cost over a weighted average period of 2.8 years.

A summary of stock option activity under the Stock Plans is as follows:

______________

(1)The total intrinsic value of options exercised, net of shares withheld for taxes, during the three months ended March 31, 2024 and 2023 was $2.9 million and $4.8 million, respectively, determined as of the date of exercise.

The fair value of restricted stock and RSUs is determined on the date of grant using the closing stock price on that day.

A summary of restricted stock and RSU activity during the three months ended March 31, 2024 is as follows:

______________

(1)The weighted average grant date fair value of the RSUs granted during the three months ended March 31, 2023 was $60.25.

(2)The fair value of RSUs vested and converted to shares of the Company’s common stock was $140.2 million and $121.2 million during the three months ended March 31, 2024 and 2023, respectively.

The Company has issued performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones.

A summary of PSU activity during the three months ended March 31, 2024 is as follows:

______________

(1)The PSUs listed above assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding PSUs as of March 31, 2024 was 1,097,448.

(2)The weighted average grant date fair value of the PSUs granted during the three months ended March 31, 2023 was $79.17.

(3)The fair value of PSUs vested and converted to shares of the Company’s common stock was $8.9 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively.

There were no shares issued under the 2010 Employee Stock Purchase Plan during the three months ended March 31, 2024 and 2023.

Supplemental disclosure of cash flow information related to the Company’s cash and non-cash activities with its leases are as follows:

						Three Months Ended March 31,
(In thousands)						2024						2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	9,771					$	9,135
Operating cash flows from finance leases						263						170
Finance cash flows from finance leases						1,336						745
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities (1)						$	9,019					$	(3,833)
Right-of-use assets obtained in exchange for new finance lease liabilities						9,006						318
Weighted-average remaining lease term - operating leases (in years)						7.10						7.18
Weighted-average remaining lease term - finance leases (in years)						3.17						3.07
Weighted-average discount rate - operating leases						6.58		%				6.42		%
Weighted-average discount rate - finance leases						6.87		%				6.67		%

______________

(1)For the three months ended March 31, 2023, this includes reductions of $6.2 million on the carrying value of the right-of-use assets held due to a reduction of the expected lease term.

As of March 31, 2024 and December 31, 2023, the Company’s right-of-use assets from operating leases are $142.0 million and $143.7 million, respectively, which are reported in operating lease right-of-use assets in the Company’s condensed consolidated balance sheets. As of March 31, 2024, the Company has outstanding operating lease obligations of $189.6 million, of which $27.2 million is reported in operating lease liabilities, current portion and $162.4 million is reported in operating lease liabilities, less current portion in the Company’s condensed consolidated balance sheets. As of December 31, 2023, the Company had outstanding operating lease obligations of $190.4 million, of which $29.4 million is reported in operating lease liabilities, current portion and $161.1 million is reported in operating lease liabilities, less current portion in the Company’s condensed consolidated balance sheets.

As of March 31, 2024 and December 31, 2023, the Company’s right-of-use assets from finance leases are $18.6 million and $11.3 million, respectively, which are reported in other long-term assets, net in the Company’s condensed consolidated balance sheets. As of March 31, 2024, the Company has outstanding finance lease obligations of $19.5 million, of which $6.4 million is reported in other current liabilities and $13.1 million is reported in other long-term liabilities in the Company’s condensed consolidated balance sheets. As of December 31, 2023, the Company had outstanding finance lease obligations of $11.9 million, of which $4.4 million is reported in other current liabilities and $7.5 million is reported in other long-term liabilities in the Company’s condensed consolidated balance sheets.

The Company accrues costs for certain legal proceedings and regulatory matters to the extent that it determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. While such accrued costs reflect the Company’s best estimate of the probable loss for such matters, the recorded amounts may differ materially from the actual amount of any such losses. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings, which may be exacerbated by various factors, including but not limited to, that they may involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; involve a large number of parties, claimants or regulatory bodies; are in the early stages of the proceedings; involve a number of separate proceedings and/or a wide range of potential outcomes; or result in a change of business practices.