The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included in this report. Additionally, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, or SEC, in preparing this discussion and analysis, we presume that readers have access to and have read the discussion and analysis of our financial condition and results of operations included in our annual report on Form 10-K for our fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, or the 2025 Annual Report. As used in this discussion and analysis and elsewhere in this report, unless the context otherwise requires, the terms “Fulgent,” the “Company,” “we,” “us” and “our” refer to Fulgent Genetics, Inc. and its consolidated subsidiaries. Forward-Looking Statements The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are statements other than historical facts and relate to future events or circumstances or our future performance, and they are based on our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. The forward-looking statements in this discussion and analysis include statements about, among other things, our future financial and operating performance, our future cash flows and liquidity and our growth strategies, as well as anticipated trends in our business and industry. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, those described under “Item 1A. Risk Factors” in Part I of the 2025 Annual Report. Moreover, we operate in a competitive and rapidly evolving industry and new risks emerge from time to time. It is not possible for us to predict all of the risks we may face, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors could cause actual results to differ from our expectations. In light of these risks and uncertainties, the forward-looking events and circumstances described in this discussion and analysis may not occur, and actual results could differ materially and adversely from those described in or implied by any forward-looking statements we make. Although we have based our forward-looking statements on assumptions and expectations we believe are reasonable, we cannot guarantee future results, levels of activity, performance or achievements or other future events. As a result, forward-looking statements should not be relied on or viewed as predictions of future events, and this discussion and analysis should be read with the understanding that actual future results, levels of activity, performance and achievements may be materially different than our current expectations. The forward-looking statements in this discussion and analysis speak only as of the date of this report, and except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations. Overview We are a technology-based company with a well-established laboratory services business and a therapeutic development business. Our laboratory services business includes technical laboratory and testing services and professional interpretation of laboratory results by licensed physicians. Our therapeutic development business is focused on developing product candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. On March 17, 2026, and as further described in Note 15. Business Combinations, to the condensed consolidated financial statements included in this report, we completed the acquisition of certain assets of Bako Diagnostics and acquired StrataDx, or collectively, the Bako Acquisition, which together provide dermatopathology, podiatric pathology, and molecular diagnostic services and therapeutic products. As the Bako Acquisition closed late in the first quarter, the results for the six months ended June 30, 2026, include only approximately three and a half months of the acquired operations. We expect the additional impact of the Bako Acquisition on our consolidated results of operations, including revenue, cost of revenue, and operating expenses, to be reflected in future periods. Recent Developments On June 1, 2026, we presented updated data from our ongoing Phase 2 study of FID-007 in combination with cetuximab in patients with recurrent or metastatic head and neck squamous cell carcinoma at the American Society of Clinical Oncology (ASCO) 2026 Annual Meeting. As of an April 16, 2026 data cutoff, the combination demonstrated an objective response rate of 61.9%, a median progression-free survival of 6.7 months, a median duration of response of 7.4 months, and a one-year overall survival rate of 63.4%, with a manageable safety profile. These are preliminary, interim data from an ongoing clinical study, and there can be no assurance that later-stage or larger trials will replicate these results or that we will obtain regulatory approval for FID-007. 32 Business Risks and Uncertainties and Other Factors Affecting Our Performance Our business and prospects are exposed to numerous risks and uncertainties, as described in our 2025 Annual Report. In particular, the Bako Acquisition is a transaction involving the integration of operations into our existing laboratory business. As described in greater detail in the risk factors included in our 2025 Annual Report, these acquisitions involve inherent risks, including potential difficulties in integrating operations, personnel, and technologies, and the potential for higher than anticipated acquisition-related costs or integration expenses. Ultimately, we may not realize the anticipated benefits of this transaction. For more information, see “Item 1A. Risk Factors” in Part I of the 2025 Annual Report. In addition, our performance in any period is affected by a number of other factors. See the description of some of the material factors affecting our performance in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report. Results of Operations The table below summarizes the results of our continuing operations for each of the periods presented. For a financial overview relating to our results of operations, including general descriptions of the make-up of material line items of our statement of operation data, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report. Historical results are not indicative of the results to be expected in the current period or any future period. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Statement of Operation Data Revenue $ 85,389 $ 81,803 $ 3,586 4 % $ 156,527 $ 155,266 $ 1,261 1 % Cost of revenue 59,710 47,368 12,342 26 % 109,358 92,485 16,873 18 % Gross profit 25,679 34,435 (8,756 ) (25 )% 47,169 62,781 (15,612 ) (25 )% Operating expenses Research and development 14,554 13,480 1,074 8 % 28,730 25,875 2,855 11 % Selling and marketing 15,228 12,286 2,942 24 % 27,449 20,751 6,698 32 % General and administrative 27,195 26,392 803 3 % 54,879 51,683 3,196 6 % Amortization of intangible assets 2,603 1,990 613 31 % 4,634 3,980 654 16 % Impairment of intangible assets 2,172 — 2,172 * 2,172 — 2,172 * Total operating expenses 61,752 54,148 7,604 14 % 117,864 102,289 15,575 15 % Operating loss (36,073 ) (19,713 ) (16,360 ) 83 % (70,695 ) (39,508 ) (31,187 ) 79 % Other income (expenses) Interest income 6,404 8,091 (1,687 ) (21 )% 15,055 16,109 (1,054 ) (7 )% Interest expense (59 ) (17 ) (42 ) 247 % (76 ) (31 ) (45 ) 145 % Impairment of equity securities — (9,926 ) 9,926 (100 )% — (9,926 ) 9,926 (100 )% Other income, net 38 46 (8 ) (17 )% 48 114 (66 ) (58 )% Total other income (expense), net 6,383 (1,806 ) 8,189 (453 )% 15,027 6,266 8,761 140 % Loss before income taxes (29,690 ) (21,519 ) (8,171 ) 38 % (55,668 ) (33,242 ) (22,426 ) 67 % Provision for (benefit from) income taxes 29 (2,263 ) 2,292 (101 )% (675 ) (2,087 ) 1,412 (68 )% Net loss from consolidated operations (29,719 ) (19,256 ) (10,463 ) 54 % (54,993 ) (31,155 ) (23,838 ) 77 % Net loss attributable to noncontrolling interests 189 299 (110 ) (37 )% 637 668 (31 ) (5 )% Net loss attributable to Fulgent $ (29,530 ) $ (18,957 ) $ (10,573 ) 56 % $ (54,356 ) $ (30,487 ) $ (23,869 ) 78 % * not meaningful 33 Revenue Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Revenue from laboratory services Precision diagnostics $ 41,453 $ 47,428 $ (5,975 ) (13 )% $ 81,691 $ 91,525 $ (9,834 ) (11 )% Anatomic pathology 37,497 28,122 9,375 33 % 62,577 53,422 9,155 17 % BioPharma services 6,409 6,253 156 2 % 12,142 10,319 1,823 18 % Total laboratory services 85,359 81,803 3,556 4 % 156,410 155,266 1,144 1 % Revenue from therapeutic development BioPharma services 30 — 30 * 117 — 117 * Total therapeutic development 30 — 30 * 117 — 117 * Total revenue $ 85,389 $ 81,803 $ 3,586 4 % $ 156,527 $ 155,266 $ 1,261 1 % * not meaningful Revenue increased by $3.6 million, or 4%, from $81.8 million in the three months ended June 30, 2025, to $85.4 million in the three months ended June 30, 2026. The increase in revenue between periods was driven by increases of $9.4 million in anatomic pathology and $0.2 million in BioPharma services, partially offset by decreases of $6.0 million in precision diagnostics. Revenue increased by $1.3 million, or 1%, from $155.3 million in the six months ended June 30, 2025, to $156.5 million in the six months ended June 30, 2026. The increase in revenue between periods was driven by increases of $9.2 million in anatomic pathology and $1.8 million in BioPharma services, partially offset by decreases of $9.8 million in precision diagnostics. The decrease in precision diagnostics revenue was driven by the decline in revenue from our largest customer as this customer begins to perform tests internally. As previously disclosed in our 2025 Annual Report, we expect revenues for our largest customer to continue to decline in 2026 as this customer continues to increase the performance of tests internally. The tests and testing services this customer has historically purchased were primarily precision diagnostic tests. To reduce this revenue risk, we will focus on developing existing customers and increasing the number of customers and thereby reducing the concentration and on successfully integrating our acquired businesses. The increase in anatomic pathology services was primarily due to $12.9 million in revenue resulting from assets and the business acquired in the Bako Acquisition, partially offset by decreases due to the impact of the final phase of the transition of our billing and revenue cycle management system which has resulted in significant processing backlogs and collections delays. We are actively seeking to address these transition issues, but we may be unable to resolve these issues in a timely manner or as quickly as we presently expect. The volume of our anatomic pathology testing services can fluctuate during holiday periods and can decline due to extreme adverse weather conditions leading to temporary laboratory closures as experienced during 2026. The increase in BioPharma services revenue was primarily due to the timing of service projects, though this revenue is expected to remain variable due to the long sales cycle and fluctuations in project timing. We believe the factors that will affect our ability to grow these revenue streams are 1) the average price point we offer and the reimbursement rate from insurance payors; 2) the concentration of our payor base; 3) the competitive advantage we have due to our broad and flexible test menu, detection rate, and turnaround times; and 4) growth in size of an addressable market. Estimated collection amounts from insurance payors are subject to the complexities and ambiguities of billing, reimbursement regulations and claims processing, as well as considerations unique to Medicare and Medicaid programs. Because our proprietary technology platform allows for rapid scaling of a broad, flexible testing menu, we can offer our customers more scalable and affordable testing. Going forward, we will strive to maintain this competitive advantage and emphasize this in our marketing efforts to grow our testing revenue. Our customer base includes insurance, institutional, and individual payors. In some periods, our revenue is concentrated on a smaller number of customers. For the laboratory services segment, aggregating customers that are under common control, no customer represented a significant concentration of revenue in the three months ended June 30, 2026, but one customer comprised $16.1 million, or 10%, of total revenue in the six months ended June 30, 2026. The same customer contributed $17.6 million, or 22%, of our revenue in the three months ended June 30, 2025, and contributed $35.2 million, or 23%, of total revenue in the six months ended June 30, 2025. As previously disclosed, we expect revenues for this customer to continue to decline in 2026 as this customer continues to transition the performance of tests internally. 34 For our largest laboratory customer, and for our customers generally, tests are typically purchased on a test-by-test basis and not pursuant to any long-term purchasing arrangements. Any or all of our customers, including affiliated customers or customers under common control who purchase large quantities of tests, have decided, and could again decide at any time, to decrease, delay, or discontinue their orders from us, which could adversely affect our revenue. In addition to the decline in demand from our largest customer transitioning testing services internally discussed above, we believe fluctuations in customer demand for our tests may be attributable, in part, to the nature of our business. Testing demand can often fluctuate throughout the year with lower demand during holiday periods. Our traditional laboratory and testing services customers can also experience significant volatility in their testing demand from period to period in the ordinary course of their operations. Demand fluctuations, particularly for any large customers, often have a significant impact on our period-to-period performance regardless of their cause. Revenue from the therapeutic development segment includes amounts recognized by ANP Technologies, Inc., or ANP, from technologies licensed to pharmaceutical and biotechnology companies, as well as CROs. An insignificant amount of gross-margin sharing revenue was recognized for the six months ended June 30, 2026. No further gross-margin sharing revenue is expected from this manufacturing and supply agreement. Revenue from non-U.S. sources increased by $1.5 million, or 27%, from $5.6 million in the three months ended June 30, 2025, to $7.1 million in the three months ended June 30, 2026. The increase in the three-month period was primarily due to increases in total revenue to China of $0.7 million, Australia of $0.4 million, and United Kingdom of $0.2 million. Revenue from non-U.S. sources increased by $1.9 million, or 17%, from $11.2 million in the six months ended June 30, 2025, to $13.2 million in the six months ended June 30, 2026. The increase in the six-month period was primarily due to increases in total revenue to Australia of $0.7 million, China of $0.6 million, and United Kingdom of $0.4 million. Cost of Revenue Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Cost of revenue $ 59,710 $ 47,368 $ 12,342 26 % $ 109,358 $ 92,485 $ 16,873 18 % Cost of revenue as a % of revenue 70 % 58 % 70 % 60 % Our consolidated cost of revenue increased by $12.3 million, or 26%, from $47.4 million in the three months ended June 30, 2025, to $59.7 million in the three months ended June 30, 2026. The increase in cost of revenue was primarily due to increases of $11.1 million in cost of revenue resulting from assets and the business acquired in the Bako Acquisition and $1.2 million in depreciation expenses. Our consolidated cost of revenue increased by $16.9 million, or 18%, from $92.5 million in the six months ended June 30, 2025, to $109.4 million in the six months ended June 30, 2026. The increase in cost of revenue was primarily due to increases of $12.8 million in cost of revenue resulting from assets and the business acquired in the Bako Acquisition and increases of $1.8 million in shipping and handling expenses, $1.6 million in depreciation expenses, and $0.9 million in consulting and outside labor costs. Our consolidated cost of revenue as a percentage of revenue increased from 58% in the three months ended June 30, 2025, to 70% in the three months ended June 30, 2026. Our consolidated cost of revenues as a percentage of revenue increased from 60% in the six months ended June 30, 2025, to 70% in the six months ended June 30, 2026. Our gross profit decreased by $8.8 million, or 25%, from $34.4 million in the three months ended June 30, 2025, to $25.7 million in the three months ended June 30, 2026, and decreased by $15.6 million, or 25%, from $62.8 million in the six months ended June 30, 2025, to $47.2 million in the six months ended June 30, 2026. Our gross profit as a percentage of revenue, or gross margin, decreased from 42% in the three months ended June 30, 2025, to 30% in the three months ended June 30, 2026, and 40% in the six months ended June 30, 2025, to 30% in the six months ended June 30, 2026. This was driven by the lower collection rate and higher fixed costs, reducing operating leverage primarily resulting from processing and collections delays in connection with the final phase of the implementation of our new billing and revenue cycle management system. This system is complex, and the challenges have been mostly related to implementing the customizations needed to maximize reimbursement that were not fully built into the initial launch. That customization work remains ongoing today. We have made progress implementing a number of the required customizations and remain focused on completing the remaining work as quickly as possible. As the remaining customizations are completed and integrated across our revenue cycle, we expect our collection rate, and correspondingly our gross margin, to improve, though we cannot predict the exact timing of that improvement. 35 Research and Development Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Research and development Laboratory services $ 8,544 $ 7,450 $ 1,094 15 % $ 17,037 $ 14,532 $ 2,505 17 % Therapeutic development 6,010 6,030 (20 ) (0 )% 11,693 11,343 350 3 % Total research and development $ 14,554 $ 13,480 $ 1,074 $ 28,730 $ 25,875 $ 2,855 Laboratory Services For the laboratory services segment, the research and development expenses were mainly for advancing our technology and future testing and testing services. The expenses increased by $1.1 million, or 15% from $7.5 million in the three months ended June 30, 2025, to $8.5 million in the three months ended June 30, 2026. The increase was primarily attributed to increases of $1.0 million in reagents and supplies expenses. For the laboratory services segment, the research and development expenses were mainly for advancing our technology and future testing and testing services. The expenses increased by $2.5 million, or 17% from $14.5 million in the six months ended June 30, 2025, to $17.0 million in the six months ended June 30, 2026. The increase was primarily attributed to increases of $1.7 million in reagents and supplies expenses and $0.9 million in personnel expenses. Therapeutic Development For the therapeutic development segment, the research and development expenses in the three months ended June 30, 2026, totaled $6.0 million and consisted of $2.8 million in contract research organization, or CRO, costs, and $2.7 million in personnel costs, including equity-based compensation. In the three months ended June 30, 2025, these expenses totaled $6.0 million and comprised $3.0 million in CRO costs and $2.6 million of personnel costs, including equity-based compensation. Other expense categories including facilities and depreciation are not individually significant and have remained stable. For the therapeutic development segment, the research and development expenses in the six months ended June 30, 2026, totaled $11.7 million and consisted of $5.7 million in personnel costs, including equity-based compensation, and $4.8 million in CRO costs. In the six months ended June 30, 2025, these expenses totaled $11.3 million and comprised $5.5 million in CRO costs and $5.0 million of personnel expenses, including equity-based compensation. Other expense categories including facilities and depreciation are not individually significant and have remained stable. Research and development expenses for the therapeutic development segment remained flat for each of the three and six months ended June 30, 2026 and 2025. Expenses for our therapeutic development segment will be influenced by our ability to progress our therapeutic candidates through development with the Food and Drug Administration, or the FDA, the timing of which can be uncertain and delayed due to a variety of factors beyond our control, including staff reductions at the FDA, which may affect the FDA’s ability to provide any required approvals or review in a timely manner or in the timelines expected. We have confirmed an end of Phase 2 meeting for FID-007 with the FDA which is scheduled before the end of August 2026 and, assuming favorable discussions with the FDA, we plan to commence a Phase 3 trial of FID-007 for the treatment of patients diagnosed with recurrent or metastatic head and neck squamous cell carcinoma in the first half of 2027. Looking ahead, we expect research and development expenses to continue increasing as clinical trials progress for FID-007, FID-022, and other pre-clinical studies. Selling and Marketing Our consolidated selling and marketing expenses increased by $2.9 million, or 24%, from $12.3 million in the three months ended June 30, 2025, to $15.2 million in the three months ended June 30, 2026. The increase in consolidated selling and marketing expenses was due to increase of $3.9 million resulting from assets and the business acquired in the Bako Acquisition, partially offset by decreases of $1.8 million in advertising and marketing expenses. 36 Our consolidated selling and marketing expenses increased by $6.7 million, or 32%, from $20.8 million in the six months ended June 30, 2025, to $27.4 million in the six months ended June 30, 2026. The increase in consolidated selling and marketing expenses was due to increase of $4.7 million resulting from assets and the business acquired in the Bako Acquisition, $2.2 million in personnel costs due to increased headcount, and $1.4 million in software and software licensing, partially offset by decreases of $1.9 million in advertising and marketing expenses. General and Administrative Our consolidated general and administrative expenses increased by $0.8 million, or 3%, from $26.4 million in the three months ended June 30, 2025, to $27.2 million in the three months ended June 30, 2026. The increase in consolidated general and administrative expenses was due to increases of $3.6 million resulting from assets and the business acquired in the Bako Acquisition and $0.7 million in software and software licensing costs, partially offset by decreases of $1.9 million in legal expense and $0.7 million of bonus expense. Our consolidated general and administrative expenses increased by $3.2 million, or 6%, from $51.7 million in the six months ended June 30, 2025, to $54.9 million in the six months ended June 30, 2026. The increase in consolidated general and administrative expenses was due to increase of $4.7 million resulting from assets and the business acquired in the Bako Acquisition, partially offset by decreases of $1.0 million in bonus expense. Impairment of Intangible Assets During the three months ended June 30, 2026, we identified a triggering event with respect to a finite-lived customer relationship intangible asset acquired as part of the ANP acquisition, resulting from loss of a significant customer relationship. As a result, we recorded an impairment charge of $2.2 million during the three months ended June 30, 2026, representing the remaining net carrying value of the intangible asset after accumulated amortization since the ANP acquisition date, effectively writing off the asset in its entirety. The impairment charge is reflected within a separate line item in the Condensed Consolidated Statements of Operations. There was no such impairment charges for intangible assets in prior year. Amortization of Intangible Assets Our consolidated amortization of intangible assets represents amortization expenses on the intangible assets that arose from the business combinations in 2026, 2025, 2022 and 2021, and a patent purchased in 2021. Other Income (Expenses) Other income (expense) is primarily comprised of interest income, which was $6.4 million and $15.1 million in the three and six months ended June 30, 2026, respectively, and $8.1 million and $16.1 million in the three and six months ended June 30, 2025, respectively. This interest income included interest earned on marketable securities and realized gain or loss on sale of marketable securities, as well as interest accrued for outstanding federal tax refunds. The change in interest income was primarily due to the interest earned from the outstanding federal tax refunds, partially offset by lower overall marketable security balances. Other expenses primarily consisted of a one-time, non-cash impairment of a prior investment as discussed further in Note 4. Fair Value Measurements, of the financial statements included in this quarterly report. Provision for (Benefit from) Income Taxes Provision for (benefit from) income taxes was $0.03 million and ($0.7) million for the three and six months ended June 30, 2026, respectively, compared with ($2.3) million and ($2.1) million for the three and six months ended June 30, 2025, respectively. The Company’s effective tax rate was (0.1%) and 1% for the three and six months ended June 30, 2026, respectively, compared to 11% and 6% for the three and six months ended June 30, 2025, respectively. The change in the effective tax rate compared to prior periods was primarily driven by a one-time tax benefit resulting from the Bako Acquisition completed during the quarter, which allowed the Company to recognize a portion of the tax benefit from its net operating losses that had previously been reserved. Net Loss Attributable to Noncontrolling Interest Net loss attributable to noncontrolling interest represents net loss attributable to minority stockholders from entities not wholly owned. 37 Liquidity and Capital Resources Liquidity and Sources of Cash We had $551.5 million and $705.5 million in cash, cash equivalents, restricted cash, and marketable securities as of June 30, 2026, and December 31, 2025, respectively. Our marketable securities primarily consist of U.S. government and U.S. agency debt securities, corporate bonds, and municipal bonds as of June 30, 2026, and December 31, 2025. Our primary uses of cash are for strategic acquisitions (the Bako Acquisition was funded from existing cash); our stock repurchase program; capital expenditures, mainly in buildings, building improvements, and equipment; repurchases of our stock; the funding of our clinical trials; and the funding of our operations as we continue to invest in and seek to grow our business. Cash used to fund operating expenses is impacted by the timing of our expense payments, as reflected in the changes in our outstanding accounts payable and accrued expenses. Future repurchases under the stock repurchase program, if any, will depend on a variety of factors, including the market price of our common stock, general market and economic conditions, our financial condition and operating results, our capital requirements and alternative uses of capital, applicable legal requirements, and other factors our board of directors may deem relevant. Our stock repurchase program does not obligate us to repurchase any specific number of shares and may be suspended, modified, or discontinued at any time without prior notice. We expect our existing cash, cash equivalents, restricted cash, and marketable securities to continue to be sufficient to meet our anticipated cash requirements for at least the next 12 months. Cash provided by operations has significantly contributed to our ability to meet our liquidity needs, including paying for capital expenditures, however, cash provided by our operations has in the past experienced fluctuations from period to period, which we expect may continue in the future. These fluctuations can occur because of a variety of factors, including, among others, factors relating to the demand for our tests, whether large customers continue ordering our tests, the amount and timing of sales, the prices we charge for our tests due to changes in product mix, customer mix, general price degradation for tests, or other factors, the rate and timing of our billing and collections cycles and the timing and amount of our commitments and other payments. We intend to improve our profitability by improving margins and expanding in new markets for our tests, but these efforts are subject to risks, including those described in “Item 1A. Risk Factors” of the 2025 Annual Report, and may not be successful. Moreover, even if our liquidity expectations are correct, we may still seek to raise additional capital through securities offerings, credit facilities or other debt financings, asset sales or collaborations or licensing arrangements. In addition and as discussed above, we are in the process of transitioning our billing and revenue cycle management system, which has required us to rebuild and implement significant customizations. The final phase of this transition and the related customization needed for this system to work as intended remain ongoing and are not yet complete. As a result, we have encountered processing delays affecting our collections rate and some delayed amounts may not ultimately be collected at the rate we expect. As the remaining customizations are completed and integrated across our revenue cycle, we expect our collection rates to improve, though we cannot predict the exact timing of that improvement. We do not believe this matter will impact our ability to meet our anticipated cash requirements for at least the next 12 months, but continued delays in completing this transition could further affect our collections, liquidity, and results of operations. If we raise additional funds by issuing equity securities, our existing stockholders could experience substantial dilution. Additionally, any preferred stock we issue could provide for rights, preferences or privileges senior to those of our common stock, and our issuance of any additional equity securities, or the possibility of such an issuance, could cause the market price of our common stock to decline. The terms of any debt securities we issue or borrowings we incur, if available, could impose significant restrictions on our operations, such as limitations on our ability to incur additional debt or issue additional equity or other restrictions that could adversely affect our ability to conduct our business, and would result in increased fixed payment obligations. If we seek to sell assets or enter into collaborations or licensing arrangements to raise capital, we may be required to accept unfavorable terms or relinquish or license to a third party our rights to important or valuable technologies or tests we may otherwise seek to develop ourselves. Moreover, we may incur substantial costs in pursuing future capital raises, including investment banking, legal and accounting fees, printing and distribution expenses and other similar costs. Additional funding may not be available to us when needed, on acceptable terms or at all. If we are not able to secure funding if and when needed and on reasonable terms, we may be forced to delay, reduce the scope of or eliminate one or more sales and marketing initiatives, research and development programs or other growth plans or strategies. In addition, we may be forced to work with a partner on one or more aspects of our tests or market development programs or initiatives, which could lower the economic value to us of these tests, programs or initiatives. Any such outcome could significantly harm our business, performance and prospects. 38 Cash Flows The following table summarizes cash flows from continuing operations for each of the periods presented: Six Months Ended June 30, 2026 2025 (in thousands) Net cash used in operating activities $ (16,661 ) $ (34,602 ) Net cash provided by investing activities $ 61,740 $ 81,133 Net cash used in financing activities $ (69,058 ) $ (13,810 ) Operating Activities During the six months ended June 30, 2026, our operations used $16.7 million of cash, as compared to $34.6 million used in the six months ended June 30, 2025. The decrease in cash used in operating activities in the six months ended June 30, 2026, as compared with the corresponding period in 2025, was primarily due to the purchase of IRA tax credits of $33.8 million in 2025, partially offset by $13.5 million cash payment in connection with the settlement of a professional liability matter during the three months ended June 30, 2026. The remaining is related to the timing of cash receipts from customers and cash payments for operating expenses. We expect to incur more operating expenses and use more cash in operating activities in the coming quarters as a result of our planned and ongoing clinical trials for FID-007 and FID-022, and as we continue to invest resources to grow our laboratory services business. Investing Activities The cash provided by or used in investing activities is impacted by capital expenditures for operational needs and timing of payments, timing of maturities of marketable securities, and discretionary business combinations and other investments. Cash provided by investing activities in the six months ended June 30, 2026 was $61.7 million, which primarily represented $103.2 million in maturities of marketable securities, $33.1 million in proceeds from sale of marketable securities, partially offset by $55.6 million related to business acquisitions, $10.0 million from the purchase of marketable securities, and $9.1 million related to the purchase of fixed assets consisting mainly of building improvements, medical laboratory equipment, and computer hardware. Cash provided by investing activities in the six months ended June 30, 2025, was $81.1 million, which primarily represented $92.7 million related to maturities of marketable securities, partially offset by $11.5 million related to the purchase of fixed assets consisting mainly of building improvement, medical laboratory equipment, and computer hardware. Financing Activities Cash used in financing activities in the six months ended June 30, 2026, was $69.1 million, which primarily related to $63.9 million used in the repurchase of common stock and $4.5 million used in common stock withholding for employee tax obligations. Cash used in financing activities in the six months ended June 30, 2025, was $13.8 million, which primarily related to $10.9 million for repurchase of common stock and $2.2 million used in common stock withholding for employee tax obligations. We do not expect to use any credit facilities due to the strong cash position as of June 30, 2026. Stock Repurchase Program In March 2022, our board of directors authorized a $250.0 million stock repurchase program. The stock repurchase program has no expiration from the date of authorization. Under the stock repurchase program, we may repurchase shares from time to time in the open market or in privately negotiated transactions. During the three and six months ended June 30, 2026, we repurchased 1.5 million and 4.1 million shares of our common stock, respectively, at an aggregate cost of $23.8 million and $63.9 million, respectively, under the stock repurchase program. During the three and six months ended June 30, 2025, we repurchased 0.2 million and 0.6 million shares of our common stock, respectively, at an aggregate cost of $3.0 million and $10.9 million, respectively, under the stock repurchase program. As of June 30, 2026, a total of approximately $75.8 million remained available for future repurchases of our common stock under our stock repurchase program. 39 Critical Accounting Policies and Use of Estimates There have been no material changes to our critical accounting policies or estimates from the information provided in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the 2025 Annual Report. Recent Accounting Pronouncements See Note 2. Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this report for information about recent accounting pronouncements. Off-Balance Sheet Arrangements We did not have, and do not currently have, any off-balance sheet arrangements during the periods presented, as defined in the rules and regulations of the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.