You should read the following discussion of our results of operations and financial condition together with our accompanying unaudited condensed consolidated financial statements and the notes thereto included under Item 1. “Financial Statements”. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry and our business and financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our Annual Report on Form 10-K (filed on March 12, 2026) for the year ended December 31, 2025 (the “2025 Form 10-K”) and the section entitled “Cautionary Statement Concerning Forward-Looking Statements” of this Form 10-Q. Unless otherwise indicated, references to "GRAIL," “we,” “us,” and the "Company" refer to GRAIL, Inc. and its subsidiaries. Overview Our Business We are an innovative commercial-stage healthcare company focused on shifting the paradigm in early cancer detection at population scale. We believe screening individuals for many types of cancer with a single test represents a significant opportunity to reduce the global burden of cancer. Our multi-cancer early detection (“MCED”) test (“Galleri”) can screen for many types of cancer, accurately predicting the specific organ or tissue type where the cancer signal originated (the “Cancer Signal of Origin”, or “CSO”), with high positive predictive values (“PPV”) and low false positive rates, all from a simple blood draw. Galleri has detected some of the most aggressive cancers in early stages including, among others, endometrial, esophageal, gastrointestinal, head and neck, liver, pancreatic, and rectal cancers. We have conducted what we believe is the largest clinical program in genomic medicine to date with data from over 385,000 participants that we believe demonstrate the clinical validation and clinical utility of Galleri in its intended use population. We have deep operational experience with over 925,000 tests processed across this clinical program and from our commercial experience, including through partnerships with leading healthcare systems, employers, digital health platforms, payors, international distributors and life insurance providers. Recently we presented results from two of our large, interventional clinical trials, PATHFINDER 2 and NHS-Galleri Trial at the Annual American Society of Clinical Oncology (“ASCO”) meeting in June 2026, and included certain results from those studies in our premarket approval application (“PMA”) to the Food and Drug Administration (“FDA”), that we submitted to the FDA in January 2026 and which has been accepted by the FDA for review. Performance and safety data focused on the first approximately 25,000 participants of our approximately 35,000 participant PATHFINDER 2 study that were initially presented at the European Society for Medical Oncology (“ESMO”) in October 2025 (the “PATHFINDER 2 Initial Results”) and demonstrated that adding Galleri to recommended (breast, cervical, colorectal and lung) screenings led to a more than seven-fold increase in the number of cancers found within a year, and an approximately three-fold increase when prostate screening was included. Results from the full approximately 35,000 participants in the PATHFINDER 2 study were generally consistent with the results presented at ESMO. We presented results from our three-year, randomized controlled NHS-Galleri Trial which demonstrated a substantial reduction in stage 4 cancer diagnoses, increased stage 1 and 2 detection of deadly cancers, and four-fold higher cancer detection rate when compared to recommended screenings alone. Although the primary endpoint of statistically significant combined stage 3 and 4 reduction in a pre-specified group of 12 deadly cancers was not observed; there was a favorable trend toward fewer combined stage 3 and 4 cancers in the intervention arm after the prevalent screening round. Galleri detected 366 Stage I and II cancers, more than the 290 cancers detected at any stage by the entirety of the U.K.’s standard of care screening program in the control arm. Additionally, adding Galleri was associated with a 25% reduction in cancers diagnosed after emergency presentation. Emergency presentations are among the costliest cancer diagnoses and are associated with the poorest patient outcomes. 22 The PATHFINDER 2 Initial Results and the performance and safety metrics from the first year (prevalent screening round) of our NHS-Galleri Trial were included in our PMA submission, along with results of a bridging study. We designed Galleri to detect cancer early, when it is more amenable to curative treatment, and we launched Galleri in the United States in mid-2021. Galleri works by detecting DNA fragments shed into the bloodstream by tumor cells and analyzing specific methylation patterns that can be used to both identify a general cancer signal and localize that signal to a specific organ or tissue type. We have sold over 595,000 commercial Galleri tests through June 30, 2026, with over 117,000 sold during the six months ended June 30, 2026. As an early pioneer of MCED testing, we have established strong relationships within the cancer and primary care community, including through partnerships with academic and community medical centers, key opinion leaders, and governmental policy and advocacy partners. We have shared evidence supporting our MCED testing at renowned medical conferences, such as the American Association of Cancer Research (“AACR”), ASCO, ESMO, and American Academy of Family Physicians. We have also published results from our studies in leading scientific and medical journals, including The Lancet, Nature, Nature Medicine, Cancer Cell, and The Lancet Oncology. Since our inception, we have incurred net losses each year. We incurred net losses of $110.2 million and $114.0 million for the three months ended June 30, 2026 and June 30, 2025 and $203.4 million and $220.2 million for the six months ended June 30, 2026 and June 30, 2025. Substantially all of our net losses resulted from the application of pushdown accounting, including goodwill and intangible and other asset impairments and the amortization of intangible assets, as well as our research and development programs, general and administrative costs associated with our operations, and sales and marketing costs associated with commercializing our products. As a result of the application of pushdown accounting, our balance sheet includes intangible assets, which may be subject to additional impairment over time. We expect to continue to incur operating losses for at least the next several years as we invest in research and development and the commercialization of existing products. Adjusted EBITDA was $(90.3) million and $(78.3) million for the three months ended June 30, 2026 and June 30, 2025 and $(170.2) million and $(177.1) million for the six months ended June 30, 2026 and June 30, 2025. Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to the most directly comparable U.S. generally accepted accounting principle (“GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of these measures, please see “Non-GAAP Financial Measures” below. Strategic Collaboration with Samsung and Closing of $110 million Equity Investment In June we completed our previously announced issuance and sale of an aggregate of 1,570,308 shares of our common stock to Samsung C&T Corporation (“Samsung C&T”) and Samsung Electronics Singapore Pte. Ltd. in a private placement at a purchase price of $70.05 per share, for aggregate gross proceeds of approximately $110.0 million. We intend to use the net proceeds to fund our commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes. In connection with this investment, our strategic collaborations with Samsung C&T and Samsung Electronics Co., Ltd. (“Samsung Electronics”) became effective. We intend to work with Samsung C&T as exclusive partners to commercialize Galleri in Korea and, potentially, other key Asian markets, including Japan and Singapore. In addition, we and Samsung Electronics intend to explore potential additional strategic and operational collaborations. 23 Key Factors Affecting Performance We believe there are several important factors that have impacted and that we expect will impact our operating performance and results of operations, including: •FDA and other regulatory approval and reimbursement. Our performance will be impacted by the extent to which we can secure reimbursement and coverage for Galleri. Prior to broader coverage and reimbursement in the United States, we will continue our work with clinics and health systems to accelerate utilization, and with self-insured employers and health insurers to offer and cover Galleri. Galleri is currently available as a laboratory developed test (“LDT”) in the United States and we have established coverage and reimbursement from a number of self-insured employers and health plans, including coverage from TRICARE, but we do not currently have broader coverage and reimbursement by Medicare or large commercial insurers. While Galleri has not been approved or cleared by the FDA, FDA approval is currently not required to market our test in the United States. We are pursuing FDA approval to help support broad access for Galleri in the United States and we submitted a PMA for Galleri to the FDA in January 2026. The FDA Molecular and Clinical Genetics Panel of the Medical Devices Advisory Committee is expected to be scheduled to review the Galleri PMA this fall. Obtaining PMA approval can take several months or years from the time an application is submitted, if at all, and any negative advisory committee recommendation could materially impede the chances for approval. Moreover, the regulatory requirements surrounding the pathway to PMA for laboratory tests have in the recent past, and may in the future, be subject to change. We believe that FDA approval, if obtained, could unlock coverage from large commercial payors in the United States. In February 2026, a new law created a coverage benefit category to enable coverage of FDA-approved MCED tests by Medicare, with authority for Centers for Medicare and Medicaid Services (“CMS”) to initiate coverage as early as January 1, 2029 for the aged 50-65 Medicare population and expanding one age-year at a time annually. If we obtain FDA approval, we expect to pursue coverage through this new law and, subsequently, inclusion of Galleri in the United States Preventive Services Task Force (“USPSTF”) guideline recommendation, although such inclusion may take years and is not certain even with FDA approval. Should USPSTF recommend Galleri with an A or B recommendation, CMS would then have the authority to expand coverage beyond what is covered under the MCED benefit category. We believe FDA approval and, to a greater extent, inclusion in USPSTF guideline recommendations would further increase adoption and market acceptance of our tests. Over time, we have and may continue to opt to provide rebates or discounts to certain customers, or reduce pricing in order to access a broader population base and accelerate adoption. In the United Kingdom, NHS England (which is being merged with the Department of Health and Social Care) (the “NHS”) will evaluate the final results from the NHS-Galleri Trial before determining whether to implement the Galleri test in the NHS. Under our agreement with the NHS, these results have met certain success criteria and missed others. As a result, we and NHS England will convene meetings of our joint steering committee to discuss how best to proceed with deployment to the UK population, if at all, considering deployment approaches and which population groups would most benefit. We believe the decision will include considerations such as NHS budget, political priorities, cost-effectiveness and implementation constraints in addition to an evaluation of the final results. We also believe our work with the NHS and the data generated from our NHS-Galleri Trial could help facilitate adoption in other single-payor systems around the world and support evidence of clinical utility worldwide. Although the primary endpoint of statistically significant combined stage 3 and 4 reduction was not observed in the NHS-Galleri Trial, we believe other results from the trial could be compelling to these systems. •International expansion. A component of our long-term growth strategy is to expand our commercial reach internationally. We continue to evaluate international expansion opportunities and we have begun expansion in select additional geographies through distributors, including Israel, Canada and the United Kingdom, and have further planned expansion through distributors in other international markets, including in South Korea through our partnership with Samsung. We expect to continue selectively engaging with international opportunities over time. Our ability to expand into new regions and jurisdictions, drive commercial sales and growth within those regions and jurisdictions and navigate economic, political, regulatory, and other risks, including geopolitical conflict associated with international operations, will be an important driver of our performance. 24 •Continued development of, and competition within, the market for MCED testing. Multi-cancer early detection is a novel technology and the market for MCED tests is evolving. We continue to drive MCED as a solution to one of healthcare’s most important challenges. Our performance depends on the extent to which key stakeholders, including current and potential commercial partners, payors and health systems, regulators, policy makers, academic and community medical centers, and key opinion leaders and advocates, understand and support MCED testing as an effective solution for cancer screening. We make significant efforts to educate these key stakeholders regarding the benefits of MCED and the clinical and economic value of our products, which we believe will continue to drive awareness of MCED and expand the commercial opportunity for our products. Additionally, new MCED products from new market entrants launched commercially in the second half of 2025. We believe that the addition of new market entrants will help develop the market for MCED testing. However, these competitors will also be targeting similar markets as us and may compete with us for customers on characteristics of their tests, such as test performance, ease of use and cost. These companies may also present clinical or other information, such as test performance information, that differs from our own presentation of similar information. Our ability to differentiate Galleri from other MCED products and any such presented data will be a key factor in our success. We believe we are differentiated by our extensive and robust datasets generated from our clinical studies, our rigorous and objective approach to test development and research, our multidisciplinary capabilities leveraging the power of next-generation sequencing and advanced and trained machine learning algorithms and data science, our robust intellectual property portfolio, and our investment in our facilities and operational workflows. However, certain new market entrants may have greater financial resources, quicker reimbursement timelines, larger sales forces, more successful marketing campaigns, more experience in screening or international commercialization, lower prices or other advantages. Our ability to succeed will depend on our market success. See Item 1A. “Risk Factors”. •Demand for our products and customer mix. A key factor to our future success is and will be our ability to increase demand for, and sales of, Galleri from new and existing customers. Our commercial strategy is focused on innovative value-oriented partnerships and targets primary care physicians, health systems, employers, digital health platforms, payors, international distributors and life insurance providers. As Galleri is not currently broadly reimbursed, our ability to drive demand from these customers is directly linked to our ability to demonstrate the clinical and economic value of our test through clinical validation and real-world experience. As of June 30, 2026, we have entered into commercial partnerships, including with leading healthcare systems, digital health platforms, employers, payors, and life insurance providers, and have established a network of more than 19,000 prescribers across the United States in a pre-reimbursement setting. We believe this commercial network represents a significant opportunity to drive further demand for Galleri. The mix of customers from which we generate revenue from period to period has an impact on our revenue and gross margin. Galleri test pricing is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates. For certain customers, we also offer rebates. Revenue generated from customers with negotiated contractual rates, or with rebates or discounts, is generally lower margin as compared to revenue generated based on list pricing. We expect the number or magnitude of these rates, discounts and rebates to reduce our average selling price (“ASP”) over time. In addition, we have entered into a number of biopharmaceutical research partnerships for our research-use-only (“RUO”) offering under our precision oncology portfolio. Large customers, such as healthcare systems, employers, and biopharmaceutical partners, generally begin using our products by initiating pilots involving a limited number of tests. We believe that our ability to convert these initial pilots into long-term customer relationships has the potential to drive substantial long-term revenue. Termination of these pilots or clinical trials can have a significant impact on our revenue and results of operations. For example, in late 2025, one of our pharmaceutical partners terminated its phase 3 trial due to low enrollment, for which our methylation technology was used as a potential companion diagnostic for enrolling participants. We also expect to increase demand from new customers through our efforts to further develop the market for MCED testing. 25 •Investment in clinical studies and innovation to support our strategy and growth. A significant aspect of our business is our investment in research and development and the ongoing evidence generation supporting the clinical performance and utility of Galleri. In particular, we have invested heavily in clinical studies and designed and executed what we believe is the largest clinical program in genomic medicine to date. These studies include: NHS-Galleri, PATHFINDER, PATHFINDER 2, CCGA, REACH/Galleri-Medicare, REFLECTION, STRIVE, SUMMIT, and SYMPLIFY. We have established and maintained a leading voice in conversations regarding the early detection of multiple cancer types in the peer-reviewed literature. We have published data from these studies in high-profile journals and have presented such data at renowned medical conferences. We believe these studies are critical to driving adoption of our tests, as well as favorable coverage decisions, and expect to continue investment in data generation. In addition, we have invested heavily in the development of our methylation platform and extensive technological infrastructure. We expect research and development expenses to decrease over the next three years as several of our large clinical trials transition to long-term follow-up, and development of our automated platform has substantially concluded. In addition, we have substantially completed development of the current enhanced versions of our Galleri test, including the version that we use in commercial channels and the version that was submitted with our PMA. We will continue to invest in Galleri, including generating and reporting clinical utility evidence to support broad adoption, progressing our PMA towards potential approval, innovating to further improve Galleri’s test performance while reducing cost, and we will evaluate other research and development opportunities from time to time. •Leverage our operational infrastructure. We have made significant investments to build a scalable infrastructure capable of meeting significant demand of up to one million tests per year while satisfying applicable certification and licensing requirements and accreditation standards. Our Durham, North Carolina facility is CAP-accredited and CLIA-certified. In addition, we engineered custom technology infrastructure and cloud-based tools to enable scalable data collection and analysis capabilities. With this foundational infrastructure in place, we have been able to generate scale efficiencies as the volume of tests sold has increased. As demand for our products increases, we expect to further leverage the scale efficiencies of our infrastructure and platform technology, which we believe will positively impact margins over time. In late 2024, we began using an updated version of Galleri in commercial channels. This version incorporates a highly-automated industrial scale platform and is intended to enable us to scale more efficiently with future demand. In connection with implementation of this new version of Galleri, we have experienced and may continue to experience increased turnaround times, re-processing costs and sample failures. We continually monitor and evaluate laboratory operations and performance in an effort to achieve our intended sample processing metrics and costs; however from time to time, processing issues may arise that could impact our operations. In the future, it is possible that we may invest significant amounts in infrastructure to support new products or existing products in new markets. As discussed in Note 11 — Segment Information, following the leadership transition, we revised the internal management reporting package provided to the CODM, including changes to the presentation and composition of segment expenses, to align with how the CODM manages operations, assesses performance, allocates resources and develops strategic priorities. We continue to operate and manage our business as one reportable operating segment. The revised presentation conforms prior-period segment information to the current-period presentation and did not change total revenue, total costs and operating expenses, loss from operations or net loss for any period presented. Seasonal fluctuations and underlying business trends have also affected, and are likely to continue to affect, our business. We may experience this seasonality, in particular in the third quarter due to primary care physician and patient summer vacation periods, with relatively lower volume in the first and third quarters, and relatively higher volume in the second and fourth quarters. These seasonal trends have caused, and will likely continue to cause, fluctuations in our quarterly results, including fluctuations in sequential revenue growth rates. While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See Item 1A. “Risk Factors” for more information. 26 Components of Results of Operations Screening Revenue We currently derive screening revenue through the sale of Galleri primarily within the United States and primarily through primary care physicians, health systems, employers, digital health platforms, payors, and life insurance providers. Galleri is not currently broadly reimbursed. Galleri test pricing is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates. For certain customers, we also offer rebates. We expect the number or magnitude of these rates, discounts and rebates to reduce our ASP over time. We identify each sale of our test to our customer as a single performance obligation; therefore, revenue is recognized at the point of time when the test result report is delivered. For self-pay patients, we have concluded that an implied contract exists, however the transaction price for the implied contract represents variable consideration as there are situations in which we do not expect to collect the full invoiced amounts from self-pay patients due to price concessions. We utilize the expected value approach to estimate the transaction price and apply a constraint for such variable consideration, on a portfolio basis. We monitor the estimated amounts to be collected at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Development Services Revenue We also derive revenue through our development services, which consist of research services we provide to biopharmaceutical and clinical customers including support of ongoing clinical studies, pilot testing, research, and therapy development. We evaluate the terms and conditions included within our development services contracts with biopharmaceutical customers to ensure appropriate revenue recognition, including whether services are considered distinct performance obligations that should be accounted for separately versus together. Revenue from pilot and research services performed is recognized as performance obligations are achieved. We recognize revenue from development service agreements related to regulatory filings to support clinical study and companion diagnostic device development and regulatory submissions for the developed product(s) using an input method based on costs incurred to measure its progress toward the completion and satisfaction of the performance obligations. Cost of Screening Revenue (Exclusive of Amortization of Intangible Assets) and Cost of Development Services Revenue Cost of revenue represents expenses that are incurred to produce and sell our products and services. For screening revenue, these costs consist of materials, labor including salaries and wages, bonus, benefits and stock-based compensation, blood collection kits and shipping, phlebotomy, royalties, electronic medical records, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs. For development services, these costs consist of materials and patient sample acquisition, labor including salaries and wages, bonus, benefits and stock-based compensation, royalties, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs. As demand for our products increases, we expect to further leverage the scale efficiencies of our infrastructure and platform technology, which we believe will positively impact margins over time. These margin improvements from scale efficiencies will at least be partially offset when we commence recognition of royalties owing under the terms of the Illumina Supply Agreement on December 24, 2026. 27 Cost of Revenue—Amortization of Intangible Assets As a result of the application of pushdown accounting, intangible assets recognized in our standalone financial statements relate to our own technology, and consist of developed technologies and in-process research and development that were measured at fair value upon the Acquisition. Our developed technology includes intangible assets related to Galleri, designed as a cancer screening test for asymptomatic individuals over 50 years of age, as well as our diagnostic aid for cancer (“DAC”) product that is being designed to accelerate diagnostic resolution for patients for whom there is a clinical suspicion of cancer. As part of our restructuring plan designed to reprioritize our resources to focus on our core MCED business and reduce overall spend as we pursue a PMA approval from the FDA for Galleri and broad reimbursement, we have reduced investment in the development of products beyond Galleri, including DAC. The cost of identifiable intangible assets with finite lives, such as developed technology assets, are amortized on a straight-line basis over the assets’ respective estimated useful lives of 18 years. Research and Development Research and development expenses include costs incurred to develop our technology (prior to establishing technological feasibility), collect clinical samples, and conduct clinical studies to develop and support our products. These costs consist of personnel costs, including salaries, benefits, and stock-based compensation expense associated with our research and development personnel, costs associated with setting up and conducting clinical studies at domestic and international sites, laboratory supplies, consulting costs, depreciation, and allocated overhead including facilities and information technology expenses, which we do not allocate by product. We expense both internal and external research and development costs in the periods in which they are incurred. Nonrefundable advance payments for goods and services that will be used or rendered in future research and development activities are deferred and recognized as expenses in the period in which the related goods are delivered or services are performed. We currently expect research and development expenses to decrease over the next three years as several of our large clinical trials transition to long-term follow-up, and development of our automated platform has substantially concluded. In addition, we have substantially completed development of the current enhanced versions of our Galleri test, including the version that we use in commercial channels and the version that was submitted with our PMA. We will continue to invest in Galleri, including generating and reporting clinical utility evidence to support broad adoption, progressing our PMA towards potential approval, and innovating to further improve Galleri’s test performance while reducing cost, and we will evaluate other research and development opportunities from time to time. Sales and Marketing Sales and marketing expenses consist primarily of personnel costs, including salaries, benefits and stock- based compensation expense, consulting costs, allocated overhead including facilities and information technology expenses, and travel associated with our commercial organization. Also included are costs associated with advertising programs that consist of brand and product awareness activities and trade events and conferences. Sales and marketing expense also includes amortization of the trade name intangible asset that was recognized upon the Acquisition, which has been recorded in our financial statements as a result of the application of pushdown accounting, and is amortized on a straight-line basis over the assets’ respective estimated useful lives of 9 years. We expect our sales and marketing expenses to increase following the release of positive study results as we invest in initiatives to drive awareness and demand generation of Galleri and to continue to decrease as a percentage of revenue over the next three years and long term. 28 General and Administrative General and administrative expenses consist of personnel expenses, including salaries, benefits and stock-based compensation expenses, for executive, finance and accounting, legal, human resources, business development, corporate communications, portfolio management, medical affairs, and management information systems personnel. Also included are professional fees, legal costs, including patent and trademark-related expenses and educational activities. We have incurred and will incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, director and officer insurance premiums, investor relations activities, and other expenses related to administrative and professional services. We expect our G&A expenses to increase as we continue to invest in corporate infrastructure to support public company operations and the commercialization of Galleri and to continue to decrease as a percentage of revenue over the next three years and long term. Interest Income Interest income consists primarily of interest income earned on our cash, cash equivalents, and short-term marketable securities. Other Income (Expense), Net Other income (expense), net primarily consists of foreign currency gains and losses as a result of our intercompany agreements. Benefit from Income Taxes Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences of events that have been included in the consolidated financial statements. Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portions or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 29 Results of Operations Comparisons of the Three and Six Months Ended June 30, 2026 and June 30, 2025 The following table summarizes our results of operations for the periods presented: Three Months Ended Six Months Ended (in thousands) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Revenue: Screening revenue $ 42,642 $ 34,379 $ 82,474 $ 63,512 Development services revenue 2,045 1,165 2,998 3,869 Total revenue 44,687 35,544 85,472 67,381 Costs and operating expenses: Cost of screening revenue (exclusive of amortization of intangible assets) 23,347 19,346 44,591 36,469 Cost of development services revenue 434 501 810 1,672 Cost of revenue — amortization of intangible assets 33,472 33,472 66,944 66,944 Research and development 47,429 46,626 95,450 100,251 Sales and marketing 37,657 28,539 68,325 63,518 General and administrative 50,708 37,914 93,477 82,988 Intangible and other assets impairment 25,423 28,000 25,423 28,000 Total costs and operating expenses 218,470 194,398 395,020 379,842 Loss from operations (173,783) (158,854) (309,548) (312,461) Other income: Interest income 7,230 6,809 15,216 14,588 Other income (expense), net (155) (811) 101 (1,395) Total other income, net 7,075 5,998 15,317 13,193 Loss before income taxes (166,708) (152,856) (294,231) (299,268) Benefit from income taxes 56,461 38,871 90,797 79,070 Net loss $ (110,247) $ (113,985) $ (203,434) $ (220,198) Comparison of the Three Months Ended June 30, 2026 and June 30, 2025 Revenue Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Screening revenue $ 42,642 $ 34,379 $ 8,263 24 % Screening Revenue The increase in screening revenue of $8.3 million or 24% was primarily driven by a 35% increase in Galleri sales volume, partially offset by an 8% decrease in ASP. Galleri sales volume increased in the second quarter of 2026 as a result of the continued ramp in our commercial activity following the release of our NHS-Galleri and PATHFINDER 2 study data, expansion of our partnerships with digital health platforms, employers, and international distributors, continued implementation of new pricing strategies, broader adoption of enhanced ordering pathways enabled by Electronic Health Record (“EHR”) integrations, and increased enrollment in our REACH/Galleri-Medicare clinical study. 30 Cost of Screening Revenue (Exclusive of Amortization of Intangible Assets) Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Cost of screening revenue (exclusive of amortization of intangible assets) $ 23,347 $ 19,346 $ 4,001 21 % The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $4.0 million or 21% was primarily driven by a 35% increase in Galleri sales volume and an increase in allocated overhead costs as a result of the increase in the proportion of commercial samples compared to research samples processed within our laboratory. These increases were partially offset by improved fixed cost leverage due to an increase in volumes and a decrease in sample reprocessing costs. Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of revenue decreased approximately 2 percentage points in the second quarter of 2026, mainly due to improved fixed cost leverage due to the increase in volumes and a decrease in sample reprocessing costs, partially offset by an 8% decrease in ASP. Research and Development Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Research and development $ 47,429 $ 46,626 $ 803 2 % The increase in research and development expenses of $0.8 million or 2% was primarily attributable to a $2.9 million increase in compensation expense, reflecting a $2.0 million increase in variable compensation expense, a $0.7 million increase in stock-based compensation expense and, to a lesser extent, a $0.2 million increase in salaries and wages. The increase was partially offset by a $2.1 million reduction in laboratory supplies and research collaboration expenses, primarily due to a reduction in research sample volumes as validation samples were run in the prior year to support our PMA submission. Sales and Marketing Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Sales and marketing $ 37,657 $ 28,539 $ 9,118 32 % The increase in sales and marketing expenses of $9.1 million or 32% was primarily attributable to continued ramp in our commercial activity, including a $5.3 million increase in compensation expense reflecting a $3.6 million increase in salaries and wages driven by a greater allocation of labor resources supporting commercial activities and increased headcount, a $1.0 million increase in variable compensation expense, and a $0.7 million increase in stock-based compensation expense. The increase was also attributable to a $3.2 million increase in marketing expenses and professional services, primarily reflecting expanded commercial marketing initiatives and 31 external professional services supporting our commercialization efforts, as well as a $0.6 million increase in software costs utilized to support commercial activities. General and Administrative Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % General and administrative $ 50,708 $ 37,914 $ 12,794 34 % The increase in general and administrative expenses of $12.8 million or 34% was primarily attributable to an $8.9 million increase in compensation expense, reflecting a $3.8 million increase in stock-based compensation expense, a $2.6 million increase in salaries and wages, primarily due to higher employer payroll taxes associated with stock-based compensation and, to a lesser extent, annual salary increases, and a $2.5 million increase in variable compensation expense. The increase was also attributable to a $2.7 million increase in legal and professional services, primarily related to professional services to support audits related to our FDA approval efforts, $0.7 million of lease-related costs associated with the commencement of our new corporate headquarters lease, and a $0.5 million increase in allocated costs supporting general and administrative activities. Intangible Impairment Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Intangible and other assets impairment $ 25,423 $ 28,000 $ (2,577) (9 %) The decrease in intangible and other assets impairment was primarily attributable to an impairment charge related to in-process research and development ("IPR&D") recorded in the prior-year quarter that did not recur in the current quarter, partially offset by a full impairment of the deferred asset recognized in connection with the Samsung SPA. Benefit from Income Taxes Three Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Benefit from income taxes $ 56,461 $ 38,871 $ 17,590 45 % The increase in benefit from income taxes was primarily attributable to a higher loss before income taxes and a higher effective tax rate due to an increase in discrete tax benefits, primarily related to stock-based compensation expense. 32 Comparison of the Six Months Ended June 30, 2026 and June 30, 2025 Revenue Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Screening revenue $ 82,474 $ 63,512 $ 18,962 30 % Screening Revenue The increase in screening revenue of $19.0 million or 30% was primarily driven by a 42% increase in Galleri sales volume, partially offset by an 8% decrease in ASP. Galleri sales volume increased in the first six months of 2026 as a result of the continued ramp in our commercial activity following the release of our NHS-Galleri and PATHFINDER 2 study data, expansion of our partnerships with digital health platforms, employers, and international distributors, continued implementation of new pricing strategies, broader adoption of enhanced ordering pathways enabled by EHR integrations, and increased enrollment in our REACH/Galleri-Medicare clinical study. Cost of Screening Revenue (Exclusive of Amortization of Intangible Assets) Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Cost of screening revenue (exclusive of amortization of intangible assets) $ 44,591 $ 36,469 $ 8,122 22 % The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $8.1 million or 22% was primarily driven by a 42% increase in Galleri sales volume and an increase in allocated overhead costs as a result of the increase in the proportion of commercial samples compared to research samples processed within our laboratory. These increases were partially offset by improved fixed cost leverage due to an increase in volumes and a decrease in sample processing costs. Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of revenue decreased approximately 3 percentage points in the first six months of 2026 mainly due to improved fixed cost leverage due to the increase in volumes and a decrease in sample reprocessing costs, partially offset by an 8% decrease in ASP. 33 Research and development Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Research and development $ 95,450 $ 100,251 (4,801) (5 %) The decrease in research and development expenses of $4.8 million or 5% was primarily attributable to a $4.5 million decrease in laboratory supplies and research collaboration expenses, primarily due to a reduction in research sample volumes as validation samples were run in the prior year to support our PMA submission and a $1.7 million decrease in facilities and information technology costs allocated to the research and development function. These decreases were partially offset by a $1.4 million increase in stock-based compensation expense. Sales and Marketing Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Sales and marketing $ 68,325 $ 63,518 4,807 8 % The increase in sales and marketing expenses of $4.8 million or 8% was primarily attributable to a $4.6 million increase in compensation expenses, reflecting a $3.2 million increase in salaries and wages driven by a greater allocation of labor resources supporting commercial activities and an increase in headcount, a $0.8 million increase in variable compensation expense, and a $0.6 million increase in stock-based compensation expense. The increase was also attributable to a $0.6 million increase in software costs utilized to support commercial activities. These increases were partially offset by a $0.4 million reduction in non-recurring marketing events expenses. General and Administrative Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % General and administrative $ 93,477 $ 82,988 $ 10,489 13 % The increase in general and administrative expenses of $10.5 million or 13% was primarily attributable to a $11.4 million increase in compensation expense, reflecting a $5.1 million increase in salaries and wages, primarily due to higher annual salaries, employer payroll taxes associated with stock-based compensation, a $3.9 million increase in stock-based compensation expense, and a $2.4 million increase in variable compensation expense. The increase was also attributable to a $1.8 million increase in allocated costs supporting general and administrative activities. These increases were partially offset by $2.7 million decreases related to contractors, legal, professional services and information technology costs driven by cost optimization efforts. Intangible Impairment Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Intangible and other assets impairment $ 25,423 $ 28,000 $ (2,577) (9 %) The decrease in intangible and other assets impairment was primarily attributable to an impairment charge related to in-process research and development ("IPR&D") recorded in the prior-year quarter that did not recur in the current quarter, partially offset by a full impairment of the deferred asset recognized in connection with the Samsung SPA. 34 Benefit from Income Taxes Six Months Ended Change (in thousands) June 30, 2026 June 30, 2025 $ % Benefit from income taxes $ 90,797 $ 79,070 $ 11,727 15 % The increase in benefit from income taxes was primarily attributable to a higher effective tax rate due to an increase in discrete tax benefits, primarily related to stock-based compensation expense. Non-GAAP Financial Measures and Royalty Payment Suspension In addition to our financial results provided throughout this Form 10-Q that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), this Form 10-Q also includes financial measures that are not calculated in accordance with GAAP. Our non-GAAP financial disclosure includes Adjusted Gross Profit and Adjusted EBITDA. This information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes included elsewhere in this Form 10-Q. The non-GAAP financial measures, definitions, and explanations to the adjustments to comparable GAAP measures are included below: Adjusted Gross Profit Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the costs associated with our sales and marketing, product development, general and administrative activities and the impact of our financing methods and income taxes. We calculate Adjusted Gross Profit as gross profit/(loss) (as defined below) adjusted to exclude amortization of intangible assets and stock-based compensation allocated to cost of revenue. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss from operations, net earnings or loss and other GAAP measures of income (loss) or profitability. The following table presents a reconciliation of gross loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted Gross Profit. 35 Three Months Ended Six Months Ended (in thousands) June 30, 2026 (2) June 30, 2025 June 30, 2026 (2) June 30, 2025 Gross loss (1) $ (12,566) $ (17,775) $ (26,873) $ (37,704) Amortization of intangible assets 33,472 33,472 66,944 66,944 Stock-based compensation 649 417 1,182 1,179 Adjusted Gross Profit $ 21,555 $ 16,114 $ 41,253 $ 30,419 (1)Gross loss is calculated as total revenue less cost of screening revenue (exclusive of amortization of intangible assets), cost of development services revenue and cost of revenue — amortization of intangible assets. (2)Gross loss excludes $3.1 million and $6.0 million of royalty expense, calculated in accordance with the Illumina Supply Agreement, that would have been incurred if such royalties had been payable during the three and six months ended June 30, 2026. Adjusted EBITDA Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of net loss to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, different operational and ownership histories, and/or different forms of employee compensation. Adjusted EBITDA is used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income (loss) or income (loss) from operations. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies. The Company defines Adjusted EBITDA as net loss adjusted for amortization of intangible assets, stock-based compensation, depreciation, intangible and other assets impairment, benefit from income taxes, interest income and restructuring expenses. These adjustments include non-cash items, significant non-recurring charges and/or other non-operating expenses that we do not believe are indicative of ongoing or future business operations. 36 Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss from operations, net earnings or loss and other U.S. GAAP measures of income (loss). Additionally, it is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest and tax payments. Further, our definition of Adjusted EBITDA may differ from similarly titled measures used by other companies and therefore may not be comparable among companies. The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with U.S. GAAP, to Adjusted EBITDA on a consolidated basis. Three Months Ended Six Months Ended (in thousands) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net loss $ (110,247) $ (113,985) $ (203,434) $ (220,198) Adjusted to exclude the following: Amortization of intangible assets (1) 34,583 34,583 69,167 69,167 Stock-based compensation 19,557 14,168 36,350 30,379 Intangible and other assets impairment (2) 25,423 28,000 25,423 28,000 Depreciation 4,105 4,592 8,315 9,287 Benefit from income taxes (56,461) (38,871) (90,797) (79,070) Interest income (7,230) (6,809) (15,216) (14,588) Restructuring — — — (34) Adjusted EBITDA $ (90,270) $ (78,322) $ (170,192) $ (177,057) (1)Represents amortization of intangible assets, including developed technology and trade names. (2)Represents the impairment charge related to the deferred asset recognized in connection with the Samsung SPA in the current period and the in-process research and development ("IPR&D") impairment charge in the prior period. Royalty Payment Suspension In addition to providing non-GAAP financial measures, we believe certain additional information relating to the royalty we are required to pay to Illumina, Inc. (“Illumina”) in the future is useful to investors to understand the impact of the royalty suspension on our performance. Under the terms of the Illumina Supply Agreement, regardless of whether our products incorporate any Illumina technology, we will be obligated to pay Illumina a royalty. We expect that the royalty payments we will make to Illumina in the foreseeable future will result in a 7% royalty rate. The royalty obligation is currently suspended until December 24, 2026 or any earlier change of control of GRAIL, at which time royalty payments to Illumina will resume, without retroactive effect. Notwithstanding the suspension of the royalty, had we been required to pay the royalty to Illumina for the three- and six- month periods ended June 30, 2026, we would have made payments of $3.1 million and $6.0 million. Refer to Note 12 — Related Party Transactions for further details. 37 Liquidity and Capital Resources Sources of Liquidity From inception through Illumina’s acquisition of GRAIL, we funded operations primarily through the issuance of redeemable convertible preferred stock. Following the acquisition and until completion of our spin-off from Illumina on June 24, 2024 (the “Spin-Off”), we received quarterly funding from Illumina. Subsequent to the Spin-Off, we have primarily funded our operations through the sale of common stock and prefunded warrants, as well as generation of revenue from commercial activities. Although we generate revenue from screening and development services, such revenues have not been sufficient to fund our operations. During 2025, we raised capital through equity financing, including a private investment in public equity (“PIPE”) and sales under an at-the-market (“ATM”) program, generating aggregate net proceeds of $418.8 million. As of June 30, 2026, $189.3 million worth of shares of common stock remained available for issuance under the ATM program. In June 2026, we completed the Samsung SPA and received aggregate net proceeds of $109.0 million, after deducting issuance costs of $1.0 million. As of June 30, 2026, our cash and cash equivalents totaled $55.6 million and our short-term marketable securities totaled $806.0 million. Future Funding Requirements We began generating revenue in mid-2021, but we have continued to incur significant losses and negative cash flows from operations. Subsequent to the acquisition of GRAIL by Illumina, we have incurred net losses of $10.4 billion which includes cumulative charges of $7.5 billion for impairment of goodwill, intangible and other assets and amortization of intangible assets. We expect to continue to incur operating losses over at least the next several years as we continue to invest in research and development and seek to achieve broad reimbursement of our current commercialized products. We believe that our existing cash, cash equivalents and short-term marketable securities, together with the anticipated commercial adoption of Galleri, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, as of the date of this Form 10-Q. However, we anticipate that we will need to raise additional financing in the future to fund our operations. Our future capital requirements will depend on many factors, including the timing and extent of spending to support commercialization and pipeline product development, market acceptance of our products prior to broad reimbursement, and the timing of broad reimbursement. We are subject to typical risks associated with an early-stage commercial company and are developing the market for multi-cancer early detection. We may encounter complications with executing our business plans that may cause unforeseen expenses and adversely affect our business. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. We may be required to seek additional capital through equity or debt financing. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us or at all. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing stockholders, increased fixed payment obligations, and the existence of securities with rights that may be senior to those of our common stock. If we incur indebtedness, we could become subject to covenants that would restrict our operations. We may also choose to raise funds through collaborations and licensing arrangements, in which case we may relinquish significant rights or grant licenses on terms that are not favorable to us. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected. 38 The following table summarizes our cash flows for the periods presented: Six Months Ended (in thousands) June 30, 2026 June 30, 2025 Net cash used in operating activities $ (167,719) $ (171,977) Net cash (used in) provided by investing activities (140,014) 84,980 Net cash provided by financing activities 113,611 — Effect of exchange rate changes on cash, cash equivalents, and restricted cash 40 190 Net decrease in cash, cash equivalents, and restricted cash $ (194,082) $ (86,807) Generally, our net cash provided by financing activities is used to fund our day-to-day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. During the six months ended June 30, 2026 and June 30, 2025, $23.4 million and $24.2 million were paid out related to annual bonuses. Net Cash Used in Operating Activities The decrease in net cash used in operating activities was primarily driven by a reduction in the net loss, adjusted for non-cash charges of $11.8 million, partially offset by working capital changes of $0.7 million. The improvement in operating cash flows was primarily driven by higher cash collections from customers and lower cash expenditures for laboratory supplies and research collaboration activities, legal, professional and marketing services, and contractor and temporary labor costs driven by cost optimization efforts. These improvements were partially offset by higher cash compensation payments. Net Cash Used in Investing Activities The change in net cash used in investing activities was primarily related to the purchase of marketable securities, net of proceeds from maturities of marketable securities. Net Cash Provided by Financing Activities The increase in net cash provided by financing activities was primarily related to $109.0 million of net proceeds from the issuance of common stock in connection with the Samsung SPA and $4.6 million of proceeds from the issuance of common stock under the ESPP. Material Cash Requirements With the exception of future cash requirements associated with our Sunnyvale, California lease, which commenced in June 2026, there have been no material changes to our material cash requirements from those disclosed in our 2025 Form 10-K. See Note 6 — Leases for more information regarding this lease. Refer to Notes 9 and 10 to our Consolidated Financial Statements of our 2025 Form 10-K for a discussion of our operating lease obligations and purchase commitments. 39 Critical Accounting Estimates For a complete discussion of our critical accounting estimates, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the 2025 Form 10-K. There have been no material changes to our critical accounting estimates during the six months ended June 30, 2026, except as described below. Assessment for Recoverability and Impairment We assess the recoverability of assets recognized in accordance with ASC Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers ("ASC 340-40"), at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To evaluate recoverability, we compare the carrying amount of the asset to the amount of consideration we expect to receive, and that has not been recognized as revenue in exchange for the goods or services to which the asset relates, less the costs that relate directly to providing those goods or services and that have not yet been recognized as expenses. The recoverability assessment requires significant judgment and is based on estimates of future revenues, costs, and other assumptions regarding the expected performance of the underlying arrangement. Because these estimates are inherently uncertain, changes in facts, circumstances, or assumptions could materially affect the recoverability assessment. If the carrying amount of the asset exceeds the amount determined to be recoverable, an impairment loss is recognized for the excess. Based on this assessment, we recognized an impairment loss of $25.4 million during the three and six months ended June 30, 2026. JOBS Act We are an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have nonetheless irrevocably elected not to avail ourselves of this exemption and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. We will remain an EGC until the earliest to occur of the following: (i) the last day of the fiscal year in which our total annual gross revenues first meet or exceed at least $1.235 billion (as adjusted for inflation), (ii) the date on which we have, during the prior three-year period, issued more than $1.0 billion in non-convertible debt, (iii) the last day of the fiscal year in which we (a) have an aggregate worldwide market value of common stock held by non-affiliates of $700 million or more (measured at the end of each fiscal year) as of the last business day of our most recently completed second fiscal quarter and (b) have been a reporting company under the Exchange Act for at least one year (and have filed at least one annual report under the Exchange Act and are not a smaller reporting company), or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act. We expect to cease to be an EGC effective December 31, 2026. Recent Accounting Pronouncements See Note 2 — Summary Of Significant Accounting Policies to our unaudited Condensed Consolidated Financial Statements included in Item 1. Financial Statements for details of recent accounting pronouncements.