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Revenue Recognition
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company recognizes revenues when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers.
Product Revenues
The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods and services. Under ASC 606—Revenue from Contracts with Customers ("ASC 606"), the Company applies the following five-step approach:
•Identify the contract with a customer
•Identify the performance obligations in the contract
•Determine the transaction price
•Allocate the transaction price to the performance obligations in the contract
•Recognize revenue when, or as, a performance obligation is satisfied

The Company generates revenue primarily from genetic testing services, which are delivered to a clinic or patient (each a customer) that requests a test service through their physician. Test results are the single performance obligation being provided to customers. Testing service revenue is recognized at a point in time when test results are delivered to the ordering physician or clinician. The Company generally bills an insurance carrier, Medicaid, Medicare, the patient, or a combination upon delivery of test results.

For tests requested directly from a clinic, the Company bills the clinic directly.

The Company generally enters into contracts with third-party payors, including insurance carriers, Medicaid and Medicare, to set the pricing for tests provided to patients. Due to the nature of these third-party payor contract arrangements, the total consideration the Company expects to collect for test results is variable as it is dependent on the terms negotiated with the third-party payor which would include test coverage, patients co-pays and deductibles, billing compliance requirements, among other factors. The predominance of the Company’s revenue is derived from payments by third-party insurance carriers.
The consideration expected to be received from clinics is generally a fixed amount based on contractual pricing agreements.

The Company uses the expected value method of estimating variable consideration expected to be received from both patients and third-party payors. The total consideration the Company expects to collect in exchange for the Company’s products is an estimate and is largely variable in nature. Consideration includes reimbursement from both patients and third-party payors. The Company initially determines variable consideration by considering historical payment trends for tests delivered, test reimbursement disallowances, and contractual arrangements in place, among other factors, which is further adjusted for current expectations, as determined necessary. Current expectations of cash collections factor in changes in reimbursement rate trends, historical events not expected to recur, and future known changes such as anticipated contractual pricing changes or changes to insurance coverage.

Because reimbursement is received over an extended collection period, management reassesses its estimates of expected cash collections each reporting period as additional collection experience becomes available. These reassessments are based on updated historical collection trends and current information and may result in increases or decreases to the
amount of revenue recognized for tests delivered in prior periods. These changes in estimates are recognized in product revenue, with a corresponding adjustment to accounts receivable or contract assets, in the period the revised estimate is determined.

The Company considers hindsight, where applicable, in estimates established for variable consideration and updates those estimates when actual experience supports doing so and when there is no longer a risk of material reversal in the amount of cumulative revenue recognized. The risk of material reversal of revenue is generally due to payors’ disallowance of test reimbursements, special contractual arrangements, eligibility, patient co-pays and responsibilities, among other factors. In establishing variable consideration, the Company considers test types with similar reimbursement characteristics together. The Company monitors the cash collections against the estimated variable consideration over the expected cash collection period and any difference is recognized as an adjustment to estimated revenues after such estimated cash collection period has closed. Approximately 85% - 90% of cash collections attributable to such product revenue occurs within six months, with the remaining collections generally taking an additional three months.

During the three months ended June 30, 2026 and 2025, the Company increased revenue by a net of $52.3 million and $45.3 million, respectively, related to changes in estimate that increased revenue for tests delivered in prior periods as it was deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which increased revenue and decreased net loss by a corresponding amount and decreased loss per share by $0.36 and $0.33 for the three months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026 and 2025, the Company increased revenue by a net of $113.3 million and $79.6 million, respectively, related to changes in estimate that increased revenue for tests delivered in prior periods as it was deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which increased revenue and decreased net loss by a corresponding amount and decreased loss per share by $0.80 and $0.59 for the six months ended June 30, 2026 and 2025, respectively.

Licensing and Other Revenues
The Company recognizes licensing revenues from its cloud-based distribution service offering, Constellation, by granting licenses to its licensees to use certain of the Company’s proprietary intellectual properties and cloud-based software and in vitro diagnostic (“IVD”) kits. The Company also recognizes revenues from its strategic collaboration agreements, such as those with BGI Genomics Co., Ltd. (“BGI Genomics”). The Company recognizes licensing and other revenues through agreements with pharmaceutical companies in support of potential clinical trials managed by the pharmaceutical companies.
Constellation
The laboratory partners with whom the Company enters into a licensing arrangement represent the licensees and are identified as customers. The licensees do not have the right to possess the Company’s software, but rather receive services through the cloud software. These arrangements often include: (i) the delivery of the services through the cloud software, (ii) the necessary support and training, and (iii) the IVD kits to be consumed as tests are processed. The Company does not consider the software as a service, the support or the training as being distinct in the context of such arrangements, and therefore, they are combined as a single performance obligation. The software, support and training are delivered simultaneously to the licensees over the term of the arrangement.
The Company bills the majority of licensees, who process the tests in their laboratories, a fixed price for each test processed. Licensing revenues are recognized as the performance obligations are satisfied (i.e., upon the delivery of each test) and reported in licensing and other revenues in the Company’s condensed consolidated statements of operations and comprehensive loss.
BGI Genomics
In February 2019, the Company entered into a License Agreement (the “BGI Genomics Agreement”) with BGI Genomics to develop, manufacture, and commercialize next generation sequencing-based genetic testing assays for clinical and commercial use. The BGI Genomics Agreement has a term of ten years and expires in February 2029. Pursuant to the BGI Genomics Agreement, the Company licensed its intellectual property to and provided development services for BGI Genomics. Following completion of development services, the Company began providing assay interpretation services over the term of the agreement.
The Company has a single remaining performance obligation related to oncology assay interpretation services to be provided to BGI Genomics, to which $20.0 million of transaction consideration was allocated and prepaid by BGI
Genomics. During the six months ended June 30, 2026, the Company recognized $0.3 million related to oncology assay interpretation services which was recognized against deferred royalties. During the six months ended June 30, 2025, the Company recognized $0.3 million related to oncology assay interpretation services which was recognized against deferred royalties. The Company has $16.6 million and $16.8 million in deferred revenue related to the BGI Genomics Agreement as of June 30, 2026 and December 31, 2025, respectively.

Disaggregation of Revenues
The following table shows disaggregation of revenues by payer types:
Three months ended
June 30,		Six months ended
June 30,
2026202520262025
(in thousands)
Insurance carriers$705,087 $516,987 $1,363,176 $989,635 
Laboratory partners37,745 22,169 66,562 43,001 
Patients9,918 7,444 19,656 15,795 
Total revenues$752,750 $546,600 $1,449,394 $1,048,431 
The following table presents total revenues by geographic area based on the location of the Company’s payers:
Three months ended
June 30,		Six months ended
June 30,
2026202520262025
(in thousands)
United States$739,469 $537,801 $1,425,067 $1,030,107 
Americas, excluding U.S.2,220 1,571 4,622 3,263 
Europe, Middle East, India, Africa9,015 5,408 15,440 11,457 
Asia Pacific and Other2,046 1,820 4,265 3,604 
Total revenues$752,750 $546,600 $1,449,394 $1,048,431 
The following table summarizes the changes in the balance of deferred revenues during the six months ended June 30, 2026 and 2025:
Balance at
June 30,
20262025
(in thousands)
Beginning balance$41,969 $36,592 
Increase in deferred revenues54,793 20,369 
Revenue recognized during the period included in deferred revenues at the beginning of the period(23,074)(14,904)
Revenue recognized from performance obligations satisfied within the same period(17,048)(4,005)
Ending balance$56,640 $38,052