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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-35092
EXACT SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware02-0478229
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
5505 Endeavor Lane, Madison WI
53719
(Address of principal executive offices)(Zip Code)
(608) 535-8815 (Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareEXASThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer 
Non-accelerated filerSmaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
As of October 31, 2023, the registrant had 180,849,944 shares of common stock outstanding.



EXACT SCIENCES CORPORATION
INDEX
Page
Number

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EXACT SCIENCES CORPORATION
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share data - unaudited)
Part I — Financial Information
September 30, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$594,612 $242,493 
Marketable securities139,794 389,564 
Accounts receivable, net199,403 158,043 
Inventory132,841 118,259 
Prepaid expenses and other current assets81,536 73,898 
Total current assets1,148,186 982,257 
Long-term Assets:
Property, plant and equipment, net692,404 684,756 
Operating lease right-of-use assets149,671 167,003 
Goodwill2,366,514 2,346,040 
Intangible assets, net1,913,307 1,956,240 
Other long-term assets, net150,748 90,577 
Total assets$6,420,830 $6,226,873 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$73,558 $74,916 
Accrued liabilities309,872 299,216 
Operating lease liabilities, current portion30,389 28,366 
Debt, current portion50,000  
Other current liabilities12,694 10,249 
Total current liabilities476,513 412,747 
Long-term liabilities:
Convertible notes, net2,312,921 2,186,106 
Long-term debt, less current portion 50,000 
Other long-term liabilities341,771 352,459 
Operating lease liabilities, less current portion168,398 182,399 
Total liabilities3,299,603 3,183,711 
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, $0.01 par value Authorized—5,000,000; shares issued and outstanding—no shares at September 30, 2023 and December 31, 2022
  
Common stock, $0.01 par value Authorized—400,000,000; shares issued and outstanding—180,814,407 and 177,925,631 shares at September 30, 2023 and December 31, 2022
1,809 1,780 
Additional paid-in capital6,540,362 6,311,644 
Accumulated other comprehensive loss(1,535)(5,236)
Accumulated deficit(3,419,409)(3,265,026)
Total stockholders’ equity3,121,227 3,043,162 
Total liabilities and stockholders’ equity$6,420,830 $6,226,873 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share data - unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenue$628,338 $523,073 $1,852,881 $1,531,284 
Operating expenses
Cost of sales (exclusive of amortization of acquired intangible assets)168,526 147,937 482,383 427,242 
Research and development111,446 90,813 310,960 299,144 
Sales and marketing173,159 187,697 536,613 635,800 
General and administrative217,393 191,968 672,653 543,410 
Amortization of acquired intangible assets22,992 23,526 68,849 74,536 
Impairment of long-lived assets 5,946 621 12,537 
Total operating expenses693,516 647,887 2,072,079 1,992,669 
Other operating income (loss)72,027 (13,244)72,027 (13,244)
Income (loss) from operations6,849 (138,058)(147,171)(474,629)
Other income (expense)
Investment income (loss), net2,065 (8,584)7,383 (13,790)
Interest expense(7,871)(5,235)(11,582)(14,224)
Total other income (expense)(5,806)(13,819)(4,199)(28,014)
Net income (loss) before tax1,043 (151,877)(151,370)(502,643)
Income tax benefit (expense)(249)3,116 (3,013)6,882 
Net income (loss)$794 $(148,761)$(154,383)$(495,761)
Net income (loss) per share—basic$0.00 $(0.84)$(0.86)$(2.82)
Net income (loss) per share—diluted $0.00 $(0.84)$(0.86)$(2.82)
Weighted average common shares outstanding—basic180,649 176,997 179,817 175,935 
Weighted average common shares outstanding—diluted184,075 176,997 179,817 175,935 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Comprehensive Loss
(Amounts in thousands - unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net income (loss)
$794 $(148,761)$(154,383)$(495,761)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on available-for-sale investments423 4 4,327 (6,451)
Foreign currency translation adjustment(1,235)(2,429)(626)(3,176)
Comprehensive loss$(18)$(151,186)$(150,682)$(505,388)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity
(Amounts in thousands, except share data - unaudited)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
Number of Shares
$0.01
Par Value
Balance, January 1, 2023177,925,631 $1,780 $6,311,644 $(5,236)$(3,265,026)$3,043,162 
Exercise of common stock options88,228 1 963 — — 964 
Issuance of common stock to fund the Company’s 2022 401(k) match517,215 5 35,072 — — 35,077 
Compensation expense related to issuance of stock options and restricted stock awards1,299,071 13 49,126 — — 49,139 
Net loss— — — — (74,151)(74,151)
Other comprehensive income
— — — 3,517 — 3,517 
Balance, March 31, 2023179,830,145 $1,799 $6,396,805 $(1,719)$(3,339,177)$3,057,708 
Exercise of common stock options36,728 1 851 — — 852 
Issuance of common stock to fund the Company’s 2022 401(k) match335 — 23 — — 23 
Compensation expense related to issuance of stock options and restricted stock awards134,002 1 61,724 — — 61,725 
Purchase of employee stock purchase plan shares544,453 5 16,339 — — 16,344 
Net loss— — — — (81,026)(81,026)
Other comprehensive income
— — — 996 — 996 
Balance, June 30, 2023180,545,663 $1,806 $6,475,742 $(723)$(3,420,203)$3,056,622 
Exercise of common stock options51,262 1 1,076 — — 1,077 
Compensation expense related to issuance of stock options and restricted stock awards217,482 2 61,869 — — 61,871 
Replaced restricted stock awards for business combinations— — 1,675 — — 1,675 
Net income— — — — 794 794 
Other comprehensive loss
— — — (812)— (812)
Balance, September 30, 2023180,814,407 $1,809 $6,540,362 $(1,535)$(3,419,409)$3,121,227 

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EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity
(Amounts in thousands, except share data - unaudited)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
Number of Shares
$0.01
Par Value
Balance, January 1, 2022173,674,067 $1,738 $6,028,861 $(1,443)$(2,641,520)$3,387,636 
Exercise of common stock options485,537 5 4,277 — — 4,282 
Compensation expense related to issuance of stock options and restricted stock awards1,391,797 14 52,427 — — 52,441 
Other7 — (7)— — (7)
Net loss— — — — (180,937)(180,937)
Other comprehensive loss
— — — (5,204)— (5,204)
Balance, March 31, 2022175,551,408 $1,757 $6,085,558 $(6,647)$(2,822,457)$3,258,211 
Exercise of common stock options84,485 1 742 — — 743 
Issuance of common stock to fund the Company’s 2021 401(k) match391,129 4 29,198 — — 29,202 
Compensation expense related to issuance of stock options and restricted stock awards183,095 2 58,930 — — 58,932 
Issuance of common stock for business combinations265,186 2 14,788 — — 14,790 
Purchase of employee stock purchase plan shares326,131 3 15,526 — — 15,529 
Net loss— — — — (166,063)(166,063)
Other comprehensive loss— — — (1,998)— (1,998)
Balance, June 30, 2022176,801,434 $1,769 $6,204,742 $(8,645)$(2,988,520)$3,209,346 
Exercise of common stock options73,441 1 940 — — 941 
Compensation expense related to issuance of stock options and restricted stock awards378,658 4 49,529 — — 49,533 
Net loss— — — — (148,761)(148,761)
Other comprehensive income— — — (2,425)— (2,425)
Balance, September 30, 2022177,253,533 $1,774 $6,255,211 $(11,070)$(3,137,281)$3,108,634 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands - unaudited)
Nine Months Ended September 30,
20232022
Cash flows from operating activities:
Net loss$(154,383)$(495,761)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation83,587 73,541 
Unrealized loss on equity investments15,622 3,497 
Deferred tax benefit
(279)(9,346)
Stock-based compensation172,735 160,906 
Realized (gain) loss on non-marketable investment
(5,358)10,000 
Gain on settlements of convertible notes, net(10,324) 
Amortization of acquired intangible assets68,849 74,536 
Impairment of long-lived assets621 12,537 
Loss on sale of asset 13,244 
Gain on contingent consideration from sale of asset(68,900) 
Remeasurement of contingent consideration liabilities(13,051)(57,619)
Non-cash lease expense20,918 24,452 
Other3,530 9,151 
Changes in assets and liabilities:
Accounts receivable, net(40,306)27,968 
Inventory, net(13,074)(9,705)
Operating lease liabilities(19,741)(16,242)
Accounts payable and accrued liabilities51,084 (89,268)
Other assets(3,686)(4,901)
Other liabilities(1,274)(2,586)
Net cash provided by (used in) operating activities86,570 (275,596)
Cash flows from investing activities:
Purchases of marketable securities(75,096)(102,438)
Maturities and sales of marketable securities328,054 377,440 
Purchases of property, plant and equipment(89,268)(141,586)
Proceeds from sale of asset 25,000 
Business combination, net of cash acquired(50,000)685 
Sales of investments in privately held companies9,296  
Investments in privately held companies(6,290)(26,827)
Other investing activities(250)(49)
Net cash provided by investing activities116,446 132,225 
Cash flows from financing activities:
Proceeds from exercise of common stock options2,893 5,966 
Proceeds in connection with the Company’s employee stock purchase plan16,344 15,529 
Proceeds from accounts receivable securitization facility 50,000 
Proceeds from issuance of convertible notes137,976  
Other financing activities(7,484)(5,113)
Net cash provided by financing activities149,729 66,382 
Effects of exchange rate changes on cash and cash equivalents(626)(3,176)
Net increase (decrease) in cash, cash equivalents and restricted cash352,119 (80,165)
Cash, cash equivalents and restricted cash, beginning of period242,790 315,768 
Cash, cash equivalents and restricted cash, end of period$594,909 $235,603 
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EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands - unaudited)


Nine Months Ended September 30,
20232022
Supplemental disclosure of non-cash investing and financing activities
Property, plant and equipment acquired but not paid$14,422 $23,659 
Supplemental disclosure of cash flow information:
Interest paid$18,176 $10,754 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$594,612 $235,306 
Restricted cash — included in prepaid expenses and other current assets297 297 
Total cash, cash equivalents and restricted cash$594,909 $235,603 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Exact Sciences Corporation (together with its subsidiaries, “Exact,” or the “Company”) was incorporated in February 1995. Exact is a leading global cancer diagnostics company. It has developed some of the most impactful tests in cancer screening and diagnostics, including Cologuard® and Oncotype DX®. Exact is currently working on the development of additional tests, with the goal of bringing new, innovative cancer tests to patients throughout the world.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements, which include the accounts of the Company and those of its wholly owned subsidiaries and variable interest entities, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K (the “2022 Form 10-K”). All intercompany transactions and balances have been eliminated upon consolidation. These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States of America (“U.S.”) and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair statement of its financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2022 has been derived from audited financial statements, but does not contain all of the footnote disclosures from the 2022 Form 10-K. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited financial statements and related notes included in the 2022 Form 10-K.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that affect the Company’s financial statements materially and involve difficult, subjective or complex judgments by management, and actual results could differ from those estimates. These estimates include revenue recognition, valuation of intangible assets and goodwill, valuation of contingent consideration, and accounting for income taxes among others. The Company’s critical accounting policies and estimates are explained further in the notes to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q and the 2022 Form 10-K.
Significant Accounting Policies
During the nine months ended September 30, 2023, there were no changes to the Company’s significant accounting policies as described in the Company’s 2022 Form 10-K, except as described in the Contingent Consideration Asset and Recently Adopted Accounting Pronouncements sections below.
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Contingent Consideration Asset
The sale of the Company’s intellectual property and know-how related to the Company’s Oncotype DX Genomic Prostate Score test (“GPS test”) resulted in the recognition of variable consideration in accordance with Accounting Standards Codification (“ASC”) 606. The Company estimates the amount of variable consideration that it is entitled to each quarter using the most likely amount method and considers whether there are any constraints on the consideration. If it is probable that a significant reversal of a gain would not occur, the Company will record a gain. To determine the classification of the consideration, the Company determines if the consideration is conditional on something other than the passage of time. Revenue-based contingent consideration that is conditional on something other than the passage of time, including future revenues from sales related to the GPS test, result in the variable consideration being classified as a contract asset. At the time the amount earned is determined, and passage of time is the only condition remaining, the contract asset is reclassified to a receivable.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-03, Presentation of Financial Statement (Topic 205 ), Income Statement - Reporting Comprehensive Income (Topic 220 ), Distinguishing Liabilities from Equity (Topic 480 ), Equity (Topic 505 ), and Compensation - Stock Compensation (Topic 718 ), to amend various SEC paragraphs in the ASC to reflect the issuance of SEC Staff Accounting Bulletin No. 120, among other things. The Company adopted this conforming guidance upon issuance, and the adoption had no material impact to the Company's consolidated financial statements.
Net Income (Loss) Per Share
Basic net income (loss) per common share (“EPS”) was determined by dividing net income (loss) applicable to common stockholders by the weighted average common shares outstanding during the period. Diluted EPS is based on shares that are outstanding per the calculation of basic EPS and on potentially dilutive shares.
The following is a reconciliation of the numerator and denominator used to calculate basic EPS and diluted EPS for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2023202220232022
Net income (loss) available to common shareholders
$794 $(148,761)$(154,383)$(495,761)
Weighted average common shares outstanding - basic
180,649 176,997 179,817 175,935 
Effect of dilutive shares:
Restricted stock awards
2,153    
Employee stock purchase plan
589    
Stock options
646    
Performance share units
38    
Dilutive potential common shares
3,426    
Weighted average common shares outstanding - diluted
184,075 176,997 179,817 175,935 
Earnings per common share from net earnings - basic
$0.00 $(0.84)$(0.86)$(2.82)
Earnings per common share from net earnings - diluted
$0.00 $(0.84)$(0.86)$(2.82)
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect:
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2023202220232022
Shares issuable upon conversion of convertible notes23,231 20,309 23,231 20,309 
Shares issuable upon the release of restricted stock awards 5,588 6,423 5,588 
Shares issuable upon the release of performance share units 1,018 1,584 1,018 
Shares issuable upon exercise of stock options 1,588 1,305 1,588 
Shares issuable in connection with acquisitions 45  45 
23,231 28,548 32,543 28,548 

(2) REVENUE
The Company’s revenue is primarily generated by its laboratory testing services utilizing its Cologuard and Oncotype® tests. The services are considered completed upon release of a patient’s test result to the ordering healthcare provider.
The following table presents the Company’s revenues disaggregated by revenue source:
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2023202220232022
Screening
Medicare Parts B & C$173,624 $140,366 $521,370 $389,373 
Commercial253,401 188,923 732,182 531,789 
Other44,988 31,470 124,443 100,013 
Total Screening472,013 360,759 1,377,995 1,021,175 
Precision Oncology
Medicare Parts B & C$46,383 $47,038 $141,352 $152,224 
Commercial44,430 42,660 135,574 134,658 
International38,599 31,533 111,453 89,536 
Other26,913 30,212 80,552 81,640 
Total Precision Oncology156,325 151,443 468,931 458,058 
COVID-19 Testing$ $10,871 $5,955 $52,051 
Total$628,338 $523,073 $1,852,881 $1,531,284 
Screening revenue primarily includes laboratory service revenue from Cologuard and Prevention Genetics, LLC (“PreventionGenetics”) tests while Precision Oncology revenue includes laboratory service revenue from global Oncotype DX and therapy selection tests.
At each reporting period end, the Company conducts an analysis of the estimates used to calculate the transaction price to determine whether any new information available impacts those estimates made in prior reporting periods. The Company recognized revenue from a change in transaction price of $4.7 million and $6.4 million for the three months ended September 30, 2023 and 2022, respectively. The Company recognized revenue from a change in transaction price of $23.7 million and $17.6 million for the nine months ended September 30, 2023 and 2022, respectively.
The Company’s deferred revenue, which is reported in other current liabilities in the Company’s condensed consolidated balance sheets, was not material as of September 30, 2023 and December 31, 2022.
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Revenue recognized for the three and nine months ended September 30, 2023 and 2022 that was included in the deferred revenue balance at the beginning of the period was not material.

(3) MARKETABLE SECURITIES
The following table sets forth the Company’s cash, cash equivalents, and marketable securities at September 30, 2023 and December 31, 2022:
(In thousands)September 30, 2023December 31, 2022
Cash and cash equivalents
Cash and money market$543,316 $178,168 
Cash equivalents51,296 64,325 
Total cash and cash equivalents594,612 242,493 
Marketable securities
Available-for-sale debt securities$137,049 $384,415 
Equity securities2,745 5,149 
Total marketable securities139,794 389,564 
Total cash, cash equivalents and marketable securities$734,406 $632,057 
Available-for-sale debt securities, including the classification within the condensed consolidated balance sheet at September 30, 2023, consisted of the following:
(In thousands)Amortized CostGains in Accumulated Other Comprehensive Income (Loss) (1)Losses in Accumulated Other Comprehensive Income (Loss) (1)Estimated Fair Value
Cash equivalents
Commercial paper$49,806 $ $ $49,806 
U.S. government agency securities1,490   1,490 
Total cash equivalents51,296   51,296 
Marketable securities
Corporate bonds$55,464 $5 $(359)$55,110 
U.S. government agency securities43,121 1 (190)42,932 
Asset backed securities30,524  (419)30,105 
Commercial paper8,902   8,902 
Total marketable securities138,011 6 (968)137,049 
Total available-for-sale securities$189,307 $6 $(968)$188,345 
______________
(1)There was no tax impact from the gains and losses in accumulated other comprehensive income (loss) (“AOCI”).
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Available-for-sale debt securities, including the classification within the condensed consolidated balance sheet at December 31, 2022, consisted of the following:
(In thousands)Amortized CostGains in Accumulated Other Comprehensive Income (Loss) (1) Losses in Accumulated Other Comprehensive Income (Loss) (1)Estimated Fair Value
Cash equivalents
Commercial paper$63,021 $ $ $63,021 
U.S. government agency securities1,304   1,304 
Total cash equivalents64,325   64,325 
Marketable securities
U.S. government agency securities$228,012 $ $(2,789)$225,223 
Corporate bonds116,318 20 (1,667)114,671 
Asset backed securities45,374 2 (855)44,521 
Total marketable securities389,704 22 (5,311)384,415 
Total available-for-sale securities$454,029 $22 $(5,311)$448,740 
______________
(1)There was no tax impact from the gains and losses in AOCI.
The following table summarizes contractual underlying maturities of the Company’s available-for-sale debt securities at September 30, 2023:
Due one year or lessDue after one year through five years
(In thousands)CostFair ValueCostFair Value
Cash equivalents
Commercial paper$49,806 $49,806 $ $ 
U.S. government agency securities1,490 1,490   
Total cash equivalents51,296 51,296   
Marketable securities
Corporate bonds$37,188 $36,931 $18,276 $18,179 
U.S. government agency securities27,744 27,648 15,377 15,284 
Commercial Paper8,902 8,902   
Asset backed securities898 894 29,626 29,211 
Total marketable securities74,732 74,375 63,279 62,674 
Total available-for-sale securities$126,028 $125,671 $63,279 $62,674 
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the gross unrealized losses and fair values of available-for-sale debt securities in an unrealized loss position as of September 30, 2023 aggregated by investment category and length of time those individual securities have been in a continuous unrealized loss position:
Less than one yearOne year or greaterTotal
(In thousands)Fair ValueGross Unrealized LossFair ValueGross Unrealized LossFair ValueGross Unrealized Loss
Marketable securities
Corporate bonds$34,109 $(177)$17,996 $(182)$52,105 $(359)
U.S. government agency securities33,114 (151)7,929 (39)41,043 (190)
Asset backed securities15,011 (41)15,094 (378)30,105 (419)
Total available-for-sale securities$82,234 $(369)$41,019 $(599)$123,253 $(968)
The Company evaluates investments that are in an unrealized loss position for impairment as a result of credit loss. It was determined that no credit losses exist as of September 30, 2023 and December 31, 2022 because the change in market value for those securities in an unrealized loss position resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers.
The gains and losses recorded on available-for-sale debt securities and equity securities are included in investment income (loss), net in the Company’s condensed consolidated statements of operations. The gains and losses recorded were not material for the three and nine months ended September 30, 2023 and 2022.

(4) INVENTORY
Inventory consisted of the following:
(In thousands)September 30, 2023December 31, 2022
Raw materials$64,939 $61,207 
Semi-finished and finished goods67,902 57,052 
Total inventory$132,841 $118,259 

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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(5) PROPERTY, PLANT AND EQUIPMENT
The carrying value and estimated useful lives of property, plant and equipment are as follows:
(In thousands)Estimated Useful LifeSeptember 30, 2023December 31, 2022
Property, plant and equipment
Landn/a$4,716 $4,716 
Leasehold and building improvements(1)214,447 200,588 
Land improvements15 years6,694 6,417 
Buildings
30 - 40 years
291,035 288,941 
Computer equipment and computer software3 years161,406 142,896 
Machinery and equipment
3 - 10 years
269,240 246,344 
Furniture and fixtures
3 - 10 years
36,390 34,047 
Assets under constructionn/a96,815 68,398 
Property, plant and equipment, at cost1,080,743 992,347 
Accumulated depreciation(388,339)(307,591)
Property, plant and equipment, net$692,404 $684,756 
______________
(1)Lesser of remaining lease term, building life, or estimated useful life.
Depreciation expense for the three months ended September 30, 2023 and 2022 was $29.3 million and $25.0 million, respectively. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $83.6 million and $73.5 million, respectively.
At September 30, 2023, the Company had $96.8 million of assets under construction, which consisted of $61.9 million in machinery and equipment, $20.5 million in capitalized costs related to software projects, $8.3 million in leasehold and building improvements, and $6.1 million related to buildings. Depreciation will begin on these assets once they are placed into service upon completion.

(6) INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of September 30, 2023:
(In thousands)Weighted Average Remaining Life (Years)CostAccumulated Amortization
Net Balance at September 30, 2023
Finite-lived intangible assets
Trade name11.8$104,000 $(26,090)$77,910 
Customer relationships7.34,000 (778)3,222 
Patents and licenses4.311,542 (9,237)2,305 
Acquired developed technology (1)7.5887,389 (307,519)579,870 
Total finite-lived intangible assets1,006,931 (343,624)663,307 
In-process research and developmentn/a1,250,000 — 1,250,000 
Total intangible assets$2,256,931 $(343,624)$1,913,307 
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of December 31, 2022:
(In thousands)Weighted Average Remaining Life (Years)CostAccumulated Amortization
Net balance at December 31, 2022
Finite-lived intangible assets
Trade name12.5$104,000 $(20,653)$83,347 
Customer relationships8.04,000 (444)3,556 
Patents and licenses4.211,542 (8,152)3,390 
Acquired developed technology (1)7.8861,474 (245,527)615,947 
Total finite-lived intangible assets981,016 (274,776)706,240 
In-process research and developmentn/a1,250,000 — 1,250,000 
Total intangible assets$2,231,016 $(274,776)$1,956,240 
______________
(1)The gross carrying amount includes an immaterial foreign currency translation adjustment related to the intangible asset acquired as a result of the acquisition of OmicEra Diagnostics GmbH (“OmicEra”), whose functional currency is also its local currency. Intangible asset balances are translated into U.S. dollars using exchange rates in effect at period end, and adjustments related to foreign currency translation are included in other comprehensive income.
As of September 30, 2023 the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows:
(In thousands)
2023 (remaining three months)$23,311 
202492,908 
202591,860 
202690,800 
202790,800 
Thereafter273,628 
$663,307 
The Company’s acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives.
On August 2, 2022, the Company completed a sale of the developed technology intangible asset related to the GPS test to MDxHealth SA (“MDxHealth”), which was measured using the income approach to determine the fair value. The gross value of the intangible asset was $59.0 million with accumulated amortization of $16.1 million as of the closing date, resulting in a carrying value of $42.9 million, which was derecognized from intangible assets, net in the condensed consolidated balance sheets upon completion of the divestiture. Refer to the Company’s 2022 Form 10-K for further information on the sale.
During the third quarter of 2022, the remaining carrying value of $2.0 million related to the supply agreement intangible asset acquired as part of the combination with Genomic Health, Inc. (“Genomic Health”) was recorded as a non-cash, pre-tax impairment loss due to the termination of the agreement.
During the second quarter of 2022, the Company recorded a non-cash, pre-tax impairment loss of $6.6 million related to the acquired developed technology intangible asset acquired as a result of the acquisition of Paradigm Diagnostics, Inc. due to lower than anticipated performance of the underlying product.
The impairment charges recorded are included in impairment of long-lived assets in the condensed consolidated statement of operations.
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Goodwill
The change in the carrying amount of goodwill for the periods ended September 30, 2023 and December 31, 2022 is as follows:
(In thousands)
Balance, January 1, 2022
$2,335,172 
OmicEra acquisition10,809 
PreventionGenetics acquisition adjustment(58)
Effects of changes in foreign currency exchange rates (1)117 
Balance, December 31, 2022
2,346,040 
Resolution Bioscience acquisition (2)
20,569 
Effects of changes in foreign currency exchange rates (1)(95)
Balance September 30, 2023
$2,366,514 
______________
(1)Represents the impact of foreign currency translation related to the goodwill acquired as a result of the acquisition of OmicEra. Goodwill balances are translated into U.S. dollars using exchange rates in effect at period end, and adjustments related to foreign currency translation are included in other comprehensive income.
(2)Refer to Note 16 for further discussion on the Company’s acquisition of Resolution Bioscience, Inc.
There were no impairment losses for the three and nine months ended September 30, 2023 and 2022.

(7) FAIR VALUE MEASUREMENTS
The three levels of the fair value hierarchy established are as follows:
Level 1    Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2    Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3    Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.
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EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table presents the Company’s fair value measurements as of September 30, 2023 along with the level within the fair value hierarchy in which the fair value measurements, in their entirety, fall.
(In thousands)Fair Value at September 30, 2023Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Cash, cash equivalents, and restricted cash
Cash and money market$543,316 $543,316 $ $ 
Commercial paper49,806  49,806  
U.S. government agency securities1,490  1,490  
Restricted cash297 297   
Marketable securities
Corporate bonds$55,110 $ $55,110 $ 
U.S. government agency securities42,932  42,932  
Asset backed securities30,105  30,105  
Commercial paper8,902  8,902  
Equity securities2,745 2,745   
Non-marketable securities$9,057 $ $ $9,057 
Liabilities
Contingent consideration$(293,777)$ $