Genedx Holdings Corp.

10/28/2025 | Press release | Distributed by Public on 10/28/2025 04:52

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). This discussion contains forward-looking statements and involves numerous risks and uncertainties. Actual results may differ materially from the results described in or implied by the forward-looking statements. You should carefully read the section entitled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from these forward-looking statements.
Overview
See Note 1, "Organization and Description of Business" to our condensed consolidated financial statements included in this Quarterly Report for more information on the Company's history.
Factors Affecting Our Performance
We believe several important factors have impacted, and will continue to impact, our performance and results of operations. While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See the section titled "Item 1A. Risk Factors" in this Quarterly Report and in our 2024 Form 10-K and our Quarterly Reports for the quarterly periods ended March 31, 2025 and June 30, 2025, which are incorporated by reference in this Quarterly Report, for further information.
Test Volume
A test is resulted once the appropriate workflow is completed and details are provided to the ordered patients or healthcare professional for reviews, which corresponds to the timing of our revenue recognition. We believe the number of resulted tests in any period is important and useful to our investors because it directly correlates with long-term patient relationships and the size of our genomic database.
We believe the number of resulted exome and genome tests in any period is important and useful to investors because it directly correlates with long-term patient relationships and the size of our genomic database. During the three months ended September 30, 2025, we resulted 25,702 exome and genome tests, which represented 43% of all test results, compared to the three months ended September 30, 2024, in which we resulted approximately 19,262 exome and genome tests, which represented 33% of all test results. During the nine months ended September 30, 2025, we resulted 69,510 exome and genome tests, which represented 41% of all test results, compared to the nine months ended September 30, 2024, in which we resulted approximately 53,871 exome and genome tests, which represented 31% of all test results.
Success Obtaining and Maintaining Reimbursement
Our ability to increase the number of billable tests and our revenue therefrom will depend on our success in achieving reimbursement for our tests from third-party payors. Reimbursement by a payor may depend on several factors, including a payor's determination that a test is appropriate, medically necessary, cost-effective, and has received prior authorization. The commercial success of our current and future products, if approved, will depend on the extent to which our customers receive coverage and adequate reimbursement from third-party payors. Since each payor makes its own decision as to whether to establish a policy or enter into a contract to provide coverage for our tests, as well as the amount it will reimburse us for a test, seeking these approvals is a time-consuming and costly process.
In cases where we or our partners have established reimbursement rates with third-party payors, we face additional challenges in complying with their procedural requirements for reimbursement. These requirements often vary from payor to payor and are reassessed by third-party payors regularly. As a result, in the past we have needed additional time and resources to comply with the requirements.
Third-party payors may decide to deny payment or seek to recoup payments for tests performed by us that they contend were improperly billed, not medically necessary or against their coverage determinations, or for which they believe they have otherwise overpaid. As a result, we may be required to refund payments already received, and our revenues may be subject to retroactive adjustment as a result of these factors among others.
We expect to continue to focus our resources on increasing the adoption of, and expanding coverage and reimbursement for, our current and any future tests we may develop or acquire. If we fail to expand and maintain broad adoption of, and coverage and reimbursement for, our tests, our ability to generate revenue and our future business prospects may be adversely affected.
Ability to Lower the Costs Associated with Performing our Tests
Reducing the costs associated with performing our diagnostic tests is both our focus and a strategic objective. We source, and will continue to source, components of our diagnostic testing workflows from third parties. We also rely upon third-party service providers for data storage and workflow management.
Increasing Adoption of our Services by Existing and New Customers
Our performance depends on our ability to retain and broaden the adoption of our services with existing customers as well as our ability to attract new customers. Our success in retaining and gaining new customers is dependent on the market's confidence in our services and the willingness of customers to continue to seek more comprehensive and integrated genomic and clinical data insights.
Investment in Platform Innovation to Support Commercial Growth
We are seeking to leverage and deploy our platforms to develop a pipeline of future disease-specific research and diagnostic and therapeutic products and services. We have limited experience in the development or commercialization of clinical or research products in connection with our database and platform.
We operate in a rapidly evolving and highly competitive industry. Our business faces changing technologies, shifting provider and patient needs, and frequent introductions of rival products and services. To compete successfully, we must accurately anticipate technology developments and deliver innovative, relevant, and useful products, services, and technologies on time. As our business evolves, the competitive pressure to innovate will encompass a wider range of products and services. We must continue to invest significant resources in research and development, including investments through acquisitions and partnerships. These investments are critical to the enhancement of our current diagnostics and health information and data science technologies from which existing and new service offerings are derived.
We expect to incur significant expenses to advance these development efforts, but they may not be successful. New potential services may fail at any stage of development and, if we determine that any of our current or future services are unlikely to succeed, we may abandon them without any return on our investment. If we are unsuccessful in developing additional services, our growth potential may be impaired.
Key Components of Results of Operations
Revenue
Diagnostic Test Revenue
The majority of our revenue is derived from genetic and genomic diagnostic testing services for three groups of customers: healthcare professionals working with patients with third-party insurance coverage or without third-party insurance coverage, institutional clients such as hospitals, clinics, state governments and reference laboratories, and self-pay patients. The amount of revenue recognized for diagnostic testing services depends on a number of factors, such as resulted test volumes, contracted rates with our customers and third-party insurance providers, insurance reimbursement policies, payor mix, historical collection experience, price concessions and other business and economic conditions and trends. To date, the majority of our diagnostic test revenue has been earned from orders received for patients with third-party insurance coverage. Our ability to increase our diagnostic test revenue will depend on our ability to increase our market penetration, obtain contracted reimbursement coverage from third-party payors, enter into contracts with institutions, and increase our reimbursement rate for tests performed.
Other Revenue
We also generate revenue from collaboration service agreements with biopharma companies and other third parties, pursuant to which we provide health information and patient identification support services. Certain of these contracts provide non-refundable payments, which we record as contract liabilities, and variable payments based upon the achievement of certain milestones during the contract term.
In addition, with the acquisition of Fabric Genomics, we generate revenues through software and interpretation services as part of the arrangements related to rare disease, hereditary risk, and cancer testing. Our customers include clinical laboratories, hospitals, and research institutions. Our ability to increase this revenue will depend on our ability to expand our customer base among hospitals and genomic centers, along with increased adoption of whole genome sequencing and AI-enabled interpretation in clinical workflows.
With respect to existing collaboration and service agreements, our revenue may fluctuate period to period due to the pattern in which we may deliver our services, our ability to achieve milestones, the timing of costs incurred, changes in estimates of total anticipated costs that we expect to incur during the contract period, and other events that may not be within our control. Our ability to increase our revenue will depend on our ability to enter into contracts with third-party partners.
Cost of Services
The cost of services reflects the aggregate costs incurred in performing services, which include expenses for reagents and laboratory supplies, compensation expenses for employees directly involved in revenue generating activities, shipping and handling fees, costs of third-party reference lab testing and phlebotomy services, if any, and allocated genetic counseling, facility and information technology costs associated with delivery services. Allocated costs include depreciation of laboratory equipment, facility occupancy, and information technology costs. The cost of services is recorded as the services are performed.
We expect the cost of services to generally increase in absolute dollars with the anticipated growth in diagnostic testing volume and services we provide under our collaboration service agreements. However, we expect the cost per test to decrease over the long term due to the efficiencies we may gain from improved utilization of our laboratory capacity, automation, and other value engineering initiatives. These expected reductions may be offset by new tests which often have a higher cost per test during the introductory phases before we can gain efficiencies. The cost per test may fluctuate from period to period.
Research and Development Expenses
Research and development expenses represent costs incurred to develop our technology and future test offerings. These costs are principally associated with our efforts to develop the software we use to analyze data and process customer orders. These costs primarily consist of compensation expenses for employees performing research and development, innovation and product development activities, costs of reagents and laboratory supplies, costs of consultants and third-party services, equipment and related depreciation expenses, non-capitalizable software development costs, research funding to our research partners as part of research and development agreements and allocated facility and information technology costs associated with genomics medical research. Research and development costs are generally expensed as incurred and certain non-refundable advanced payments provided to our research partners are expensed as the related activities are performed.
We generally expect our research and development expenses to continue to increase in absolute dollars as we innovate and expand the application of our platforms. However, we expect research and development expenses to decrease as a percentage of revenue in the long term, although the percentage may fluctuate from period to period due to the timing and extent of our development and commercialization efforts and fluctuations in our compensation-related charges.
Selling and Marketing Expenses
Selling and marketing expenses primarily consist of compensation expenses for employees performing commercial sales, account management, marketing, and certain genetic counseling services. Selling and marketing costs are expensed as incurred.
We generally expect our selling and marketing expenses will continue to increase in absolute dollars as we expand our commercial sales and marketing and counseling teams and increase marketing activities. However, we expect selling and marketing expenses to decrease as a percentage of revenue in the long term, subject to fluctuations from period to period due to the timing and magnitude of these expenses.
General and Administrative Expenses
General and administrative expenses primarily consist of compensation expenses for employees in executive leadership, legal, finance and accounting, human resources, information technology, and other administrative functions. In addition, these expenses include office occupancy and information technology costs. General and administrative costs are expensed as incurred.
We generally expect our general and administrative expenses to continue to increase in absolute dollars as we increase headcount and incur costs associated with operating as a public company, including expenses related to legal, accounting, and regulatory matters, and maintaining compliance with requirements of Nasdaq and of the SEC. We expect these expenses to decrease as a percentage of revenue in the long term as revenue increases, although the percentage may fluctuate from period to period due to fluctuations in our compensation-related charges.
Comparison of the three months ended September 30, 2025 and 2024
The following table sets forth our results of operations for the periods presented:
Three months ended September 30,
2025 2024 $ Change % Change
Revenue
Diagnostic test revenue $ 113,523 $ 77,418 $ 36,105 47 %
Other revenue 3,220 (544) 3,764 NM
Total revenue 116,743 76,874 39,869 52 %
Cost of services 32,216 29,045 3,171 11 %
Gross profit 84,527 47,829 36,698 77 %
Research and development 19,829 11,665 8,164 70 %
Selling and marketing 23,510 17,025 6,485 38 %
General and administrative 44,439 26,919 17,520 65 %
Loss from operations
(3,251) (7,780) 4,529 (58) %
Non-operating (expenses) income, net
Change in fair value of financial liabilities (3,401) (880) (2,521)
NM
Interest expense, net (562) (843) 281 (33) %
Other (expense) income, net (174) 1,144 (1,318)
NM
Total non-operating expense, net (4,137) (579) (3,558)
NM
Loss before income taxes (7,388) (8,359) 971 (12) %
Income tax (expense) benefit (247) 47 (294) NM
Net loss $ (7,635) $ (8,312) $ 677 (8) %
NM - Not Meaningful
Revenue
Total revenue increased by $39.9 million, or 52%, to $116.7 million for the three months ended September 30, 2025, from $76.9 million for the three months ended September 30, 2024.
Diagnostic test revenue increased by $36.1 million, or 47%, to $113.5 million for the three months ended September 30, 2025, from $77.4 million for the three months ended September 30, 2024. The increase primarily reflected an increase of 65% in whole exome and genome sequencing revenues driven by a 33% increase in test volumes and improvements in exome and genome average reimbursement rates.
Other revenue increased by $3.8 million, to $3.2 million for the three months ended September 30, 2025. The increase primarily reflects $1.7 million of revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs. In addition, the prior year period included a negative adjustment in partnership revenues from our data business.
Gross Profit
Gross profit increased by $36.7 million or 77%, to $84.5 million for the three months ended September 30, 2025, from $47.8 million for the three months ended September 30, 2024, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.
Research and Development
Research and development expense increased by $8.2 million, or 70%, to $19.8 million for the three months ended September 30, 2025, from $11.7 million for the three months ended September 30, 2024. The increase was driven by higher overall compensation costs of $7.4 million, which primarily reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics.
Selling and Marketing
Selling and marketing expense increased by $6.5 million, or 38%, to $23.5 million for the three months ended September 30, 2025, from $17.0 million for the three months ended September 30, 2024. This increase primarily reflects our investment to support growth in our commercial team, as well as the inclusion of selling and marketing costs of Fabric Genomics.
General and Administrative
General and administrative expense increased by $17.5 million, or 65%, to $44.4 million for the three months ended September 30, 2025, from $26.9 million for the three months ended September 30, 2024. The increase was primarily attributable to increased compensation related costs of $10.1 million, higher legal and third-party consultant costs of $3.8 million and higher IT software and infrastructure costs of $2.0 million.
Non-Operating Expense, Net
Non-operating expense, net increased by $3.6 million. The current quarter results primarily reflected a loss of $2.5 million for the change in fair value of the contingent consideration related to the Fabric Genomics acquisition. The prior period included a reduction in legal reserves, net of insurance, of approximately $1.3 million.
See Note 5, "Fair Value Measurements" to our condensed consolidated financial statements for further information on the changes in fair value of our financial liabilities.
Comparison of the nine months ended September 30, 2025 and 2024
The following table sets forth our results of operations for the periods presented:
Nine months ended September 30,
2025 2024 $ Change % Change
Revenue
Diagnostic test revenue
$ 299,382 $ 207,961 $ 91,421 44 %
Other revenue
7,168 1,849 5,319 NM
Total revenue
306,550 209,810 96,740 46 %
Cost of services
92,645 81,618 11,027 14 %
Gross profit
213,905 128,192 85,713 67 %
Research and development
47,485 34,134 13,351 39 %
Selling and marketing
61,274 49,695 11,579 23 %
General and administrative
103,988 76,382 27,606 36 %
Income (loss) from operations
1,158 (32,019) 33,177
NM
Non-operating (expenses) income, net
Change in fair value of financial liabilities
(2,320) (11,390) 9,070 (80) %
Interest expense, net (2,019) (2,334) 315 (13) %
Other (expense) income, net
274 (12,300) 12,574
NM
Total non-operating expense, net
(4,065) (26,024) 21,959 (84) %
Loss before income taxes
(2,907) (58,043) 55,136 (95) %
Income tax (expense) benefit
(448) 319 (767)
NM
Net loss
$ (3,355) $ (57,724) $ 54,369 (94) %
NM - Not Meaningful
Revenue
Total revenue increased by $96.7 million, or 46%, to $306.6 million for the nine months ended September 30, 2025, from $209.8 million for the nine months ended September 30, 2024.
Diagnostic test revenue increased by $91.4 million, or 44%, to $299.4 million for the nine months ended September 30, 2025, from $208.0 million for the nine months ended September 30, 2024. The increase is attributable to increase of 66% in whole exome and genome sequencing revenues driven by a 29% increase in test volumes and a 29% increase in average reimbursement rates. This was partially offset by declines in other non-exome test revenues.
Other revenue increased by $5.3 million, to $7.2 million for the nine months ended September 30, 2025, from $1.8 million for the nine months ended September 30, 2024. The increase reflects $2.3 million of revenue from the recently acquired Fabric Genomics operating segment and the continued expansion of data and bio pharma programs.
Gross Profit
Gross profit increased by $85.7 million for the nine months ended September 30, 2025, driven by a combination of a shift in test mix to more profitable whole exome and genome tests, improvement in exome average reimbursement rates, and continued cost per test leverage.
Research and Development
Research and development expense increased by $13.4 million, or 39%, to $47.5 million for the nine months ended September 30, 2025, from $34.1 million for the nine months ended September 30, 2024. The increase was primarily attributable to compensation related costs of $14.4 million which reflects an investment to expand our product development team and the inclusion of research and development costs of Fabric Genomics. The increase was partially offset by lower costs associated with the Guardian newborn screening study of $1.5 million.
Selling and Marketing
Selling and marketing expense increased by $11.6 million, or 23%, to $61.3 million for the nine months ended September 30, 2025, from $49.7 million for the nine months ended September 30, 2024. The increase was primarily attributable to higher compensation related costs of $9.5 million which reflects our investment to support growth in our commercial team, as well as the inclusion of selling and marketing costs of Fabric Genomics.
General and Administrative
General and administrative expense increased by $27.6 million, or 36%, to $104.0 million for the nine months ended September 30, 2025, from $76.4 million for the nine months ended September 30, 2024. The increase was primarily attributable to increased compensation related costs of $21.9 million, higher IT software and infrastructure costs of $5.2 million, higher legal and audit-related costs of $6.1 million and increased amortization expense for acquired intangible assets established in connection with purchase accounting. These increases were partially offset by a one-time sales-and-use tax refund of $8.4 million.
Non-Operating Expense, Net
Non-operating expense, net, improved by $22.0 million. This was driven by prior period activities which included legal reserves, net of insurance, of approximately $12.1 million and non-cash charges of $10.1 million associated with the exercise of the Perceptive Warrants.
Reconciliation of Non-GAAP Financial Measures
In addition to our results determined in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP"), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
Non-GAAP financial measures have limitations as analytical tools and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. We may in the future incur expenses similar to the adjustments in the presentation of non-GAAP financial measures. Other limitations include that non-GAAP financial measures do not reflect:
•all expenditures or future requirements for capital expenditures or contractual commitments;
•changes in our working capital needs;
•the costs of replacing the assets being depreciated, which will often have to be replaced in the future;
•the non-cash component of employee compensation expense; and
•the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations.
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted gross profit is a non-GAAP financial measure that we define as revenue less cost of services, excluding depreciation and amortization expense, stock-based compensation expense and restructuring costs. We define adjusted gross margin as our adjusted gross profit divided by our revenue. We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
The following is a reconciliation of gross profit to our adjusted gross profit and of our gross margin to adjusted gross margin for the three and nine months ended September 30, 2025 and 2024:
Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
Revenue $ 116,743 $ 76,874 $ 306,550 $ 209,810
Cost of services 32,216 29,045 92,645 81,618
Gross profit $ 84,527 $ 47,829 $ 213,905 $ 128,192
Gross margin 72.4 % 62.2 % 69.8 % 61.1 %
Add:
Depreciation and amortization expense $ 1,374 $ 1,495 $ 3,838 $ 3,119
Stock-based compensation expense 219 174 580 308
Restructuring costs - 6 - 54
Adjusted gross profit $ 86,120 $ 49,504 $ 218,323 $ 131,673
Adjusted gross margin 73.8 % 64.4 % 71.2 % 62.8 %
Adjusted Net Income (Loss)
Adjusted net income (loss) is a non-GAAP financial measure that we define as net income (loss) adjusted for depreciation and amortization, stock-based compensation expenses, restructuring costs, change in fair value of financial liabilities, interest expense (net), income tax expense (benefit), transaction costs, legal reserves and tax refunds. We believe adjusted net income (loss) is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain factors that may vary from company to company for reasons unrelated to overall operating performance.
The following is a reconciliation of our net loss to adjusted net income (loss) for the three and nine months ended September 30, 2025 and 2024:
Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
Net loss
$ (7,635) $ (8,312) $ (3,355) $ (57,724)
Depreciation and amortization expense 6,474 5,929 18,343 16,395
Stock-based compensation expense 10,586 3,636 22,382 6,293
Restructuring costs 128 369 759 1,460
Change in fair value of financial liabilities
3,401 880 2,320 11,390
Other (1)
1,781 (531) (3,040) 14,138
Adjusted net income (loss) $ 14,735 $ 1,971 $ 37,409 $ (8,048)
(1)For the three and nine months ended September 30, 2025, represents interest expense, net, income tax expense, net, transaction costs associated with the Merger Agreement and a sales-and-use tax refund. For the three and nine months ended September 30, 2024, represents interest expense, net, income tax benefit, net, and reserves net of insurance for a certain litigation matter.
Liquidity and Capital Resources
As of September 30, 2025, our existing cash and cash equivalents and available-for-sale marketable securities were $155.1 million.
We believe that our cash and cash equivalents and available-for-sale marketable securities provide us with sufficient liquidity for at least twelve months from the filing date of this Quarterly Report. Accordingly, our condensed consolidated financial statements included in this Quarterly Report have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Nevertheless, we may also seek additional funding in the future through the sale of common or preferred equity or convertible debt securities, by entering into other credit facilities or other forms of third-party funding, or other debt financing or by disposing of assets or businesses.
We previously had an effective shelf registration statement that registered $300.0 million shares of Class A common stock and other securities, which expired in September 2025. We intend to file a new automatic shelf registration statement with the SEC registering shares of our Class A common stock and other securities to replace our prior shelf registration statement.
Material Cash Requirements for Known Contractual Obligations and Commitments
We anticipate fulfilling our contractual obligations and commitments with existing cash and cash equivalents and available-for-sale marketable securities or through additional capital raised to finance our operations.
As discussed in the notes to our condensed consolidated financial statements, in 2022, we entered into an agreement with one of our third-party payors to settle claims related to coverage and billing matters allegedly resulting in overpayments by the payor to Legacy Sema4. As of September 30, 2025, remaining payments due to the payor were $12.0 million, with $10.0 million due prior to December 31, 2025. For more information regarding this matter, see Note 3, "Revenue Recognition" to our consolidated financial statements included in our 2024 Form 10-K and Note 4, "Revenue Recognition," to our condensed consolidated financial statements included within this Quarterly Report, respectively.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our critical accounting policies and estimates are described in Note 2, "Summary of Significant Accounting Policies" to the consolidated financial statements included in the 2024 Form 10-K. Except as disclosed in Note 2, "Summary of Significant
Accounting Policies" to our condensed consolidated financial statements included in this Quarterly Report, there have been no material changes to our critical accounting policies and estimates in the current period.
Cash Flows
Nine Months Ended September 30,
2025 2024
Net cash provided by (used in) operating activities $ 36,369 $ (25,313)
Net cash used in investing activities (50,445) (29,613)
Net cash provided by financing activities 24,832 13,139
Operating Activities
Net cash provided by operating activities during the nine months ended September 30, 2025 was $36.4 million, driven by improved gross margin profitability in the current year. This performance was partially offset by the changes in operating assets and liabilities which primarily reflected higher accounts receivables from growth of the whole exome and genome testing volumes.
Net cash used in operating activities during the nine months ended September 30, 2024 was $25.3 million, driven by lower cash expenditures associated with the current year period net loss as compared with the prior year period, which reflected improved gross margin profitability, as well as the realization of cost savings from exiting the Legacy Sema4 business and other cost reduction initiatives.
Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2025 was $50.4 million, which included $33.2 million for the acquisition of Fabric Genomics, purchases of marketable securities of $36.5 million and property and equipment of $14.7 million, partially offset by $34.0 million in proceeds from the maturities of marketable securities.
Net cash used in investing activities during the nine months ended September 30, 2024 was $29.6 million, which included net purchases of marketable securities of $52.7 million and property and equipment of $2.4 million, partially offset by $25.6 million in proceeds from the sales and maturities of marketable securities.
Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2025 was $24.8 million, which primarily reflected proceeds from our prior at-the-market ("prior ATM offering") of $25.6 million.
Net cash used in financing activities during the nine months ended September 30, 2024 was $13.1 million, primarily driven by the $14.6 million net proceeds from our prior ATM offering, net of issuance costs, which was offset partially by $1.5 million of finance lease payments and $0.2 million of principal payments on the DECD loan.
For more information regarding our prior ATM offering, see Note 14, "Supplemental Information," to our condensed consolidated financial statements included within this Quarterly Report.
JOBS Act Accounting Election
We are an "emerging growth company" within the meaning of the Jumpstart Our Business Startups Act (the "JOBS Act"). The JOBS Act allows an emerging growth company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. We have elected to use this extended transition period and, as a result, our financial statements may not be comparable to companies that comply with public company effective dates. We also intend to rely on other exemptions provided by the JOBS Act, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
As of December 31, 2025, we will cease to qualify as an emerging growth company and will no longer be allowed to take advantage of the exemptions and reporting requirements noted above.
Genedx Holdings Corp. published this content on October 28, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 28, 2025 at 10:53 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]