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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 10-Q
___________________________________________
(Mark One)

x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025
OR

o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number 001-42045
___________________________________________
GRAIL, Inc.
(Exact name of registrant as specified in its charter)
___________________________________________

Delaware | 86-3673636
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
1525 O’Brien Drive Menlo Park, California | 94025
(Address of Principal Executive Offices) | (Zip Code)

(833) 694-2553
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common stock, par value $0.001 per share | GRAL | Nasdaq Global Select Market

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 x No o
Indicate by check mark whether the registrant has submitted electronically 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 x No o
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 filer | o |  | Accelerated filer | o
Non-accelerated filer | x |  | Smaller reporting company | x
|  |  | Emerging growth company | x

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. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No ☒
As of November 10, 2025, the registrant had 38,982,223 shares of common stock, par value $0.001 per share, outstanding.

1

TABLE OF CONTENTS

| Page
Cautionary Note Regarding Forward-Looking Statements | 1
Part I - Financial Information |
Item 1. Financial Statements | 2
Condensed Consolidated Balance Sheets | 2
Condensed Consolidated Statements of Operations | 3
Condensed Consolidated Statements of Comprehensive Loss | 4
Condensed Consolidated Statements of Stockholders’/Member’s Equity | 5
Condensed Consolidated Statements of Cash Flows | 7
Notes to Condensed Consolidated Statements | 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 28
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 50
Item 4. Controls and Procedures | 50
Part II - Other Information |
Item 1. Legal Proceedings | 52
Item 1A. Risk Factors | 52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 61
Item 3. Defaults Upon Senior Securities | 62
Item 4. Mine Safety Disclosures | 62
Item 5. Other Information | 62
Item 6. Exhibits | 63
Signatures | 65

1

Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should,” “would,” or “will,” the negative of these terms, and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties, and assumptions about us, may include expectations and projections of our future financial performance, future tests or products, technology, clinical studies, regulatory landscape, compliance and strategy, potential market opportunity, increased competition, anticipated growth strategies, sufficiency of cash on hand to finance our business, seasonality, cost savings, facilities plans and lease commencement, budgets and strategies, restructuring and stock-based compensation costs, legal proceedings, impact of the restructuring on our operations and anticipated trends in our business.
These statements are only predictions based on our current expectations and projections about future events and trends. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements, including those factors discussed under Item 1A. “Risk Factors” in this Form 10-Q and in our Annual Report on Form 10-K (filed on March 5, 2025) for the year ended December 31, 2024 (the “2024 Form 10-K”). You should specifically consider the numerous risks described under these sections. Moreover, we operate in a dynamic and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results, level of activity, performance, or achievements to differ materially and adversely from those contained in any forward-looking statements we may make.
Forward-looking statements relate to the future and, accordingly, are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Although we believe the expectations and projections expressed or implied by the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Except to the extent required by law, we undertake no obligation to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations or to reflect new information or the occurrence of unanticipated events.
1

Part I - Financial Information
Item 1. Financial Statements
GRAIL, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(amounts in thousands, except share and per share data)

| September 30, 2025 |  | December 31, 2024
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 126,892 |  |  | $ | 214,234 |
Short-term marketable securities | 413,238 |  |  | 549,236 |
Accounts receivable, net(1) | 16,282 |  |  | 20,312 |
Supplies(2) | 18,390 |  |  | 18,632 |
Prepaid expenses and other current assets(3) | 14,579 |  |  | 17,447 |
Total current assets | 589,381 |  |  | 819,861 |
Property and equipment, net(4) | 56,180 |  |  | 69,061 |
Operating lease right-of-use assets | 56,061 |  |  | 66,373 |
Restricted cash | 6,974 |  |  | 3,349 |
Intangible assets, net | 1,885,140 |  |  | 2,016,890 |
Other non-current assets | 7,295 |  |  | 7,773 |
Total assets | $ | 2,601,031 |  |  | $ | 2,983,307 |
Liabilities and stockholders’ equity |  |  |
Current liabilities: |  |  |
Accounts payable(5) | $ | 3,407 |  |  | $ | 4,844 |
Accrued liabilities(6) | 58,076 |  |  | 57,241 |
Operating lease liabilities, current portion | 14,022 |  |  | 13,260 |
Other current liabilities | 1,928 |  |  | 1,580 |
Total current liabilities | 77,433 |  |  | 76,925 |
Operating lease liabilities, net of current portion | 44,568 |  |  | 54,881 |
Deferred tax liability, net | 236,265 |  |  | 345,860 |
Other non-current liabilities | 2,802 |  |  | 2,236 |
Total liabilities | 361,068 |  |  | 479,902 |
Preferred stock, par value of $0.001 per share; 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2025 and December 31, 2024 | — |  |  | — |
Common stock $0.001 par value per share, 1,500,000,000 shares authorized, 36,160,998 shares issued and outstanding as of September 30, 2025, 33,893,409 shares issued and outstanding as of December 31, 2024 | 36 |  |  | 34 |
Additional paid-in capital | 12,349,976 |  |  | 12,305,250 |
Accumulated other comprehensive income | 2,456 |  |  | 1,451 |
Accumulated deficit | (10,112,505) |  |  | (9,803,330) |
Total stockholders' equity | 2,239,963 |  |  | 2,503,405 |
Total liabilities and stockholders’ equity | $ | 2,601,031 |  |  | $ | 2,983,307 |

(1) Includes related party accounts receivable, net of $34 and $65, respectively.
(2) Includes related party supplies of $975 and $3,130, respectively.
(3) Includes related party prepaid expenses and other current assets of $62 and $77, respectively.
(4) Includes related party property and equipment, net of $1,636 and $2,227, respectively.
(5) Includes related party accounts payable of $54 and nil, respectively.
(6) Includes related party accrued liabilities of $94 and $104, respectively.
See accompanying notes to unaudited condensed consolidated financial statements.
2

Table of Contents
GRAIL, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(amounts in thousands, except share and per share data)

| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Revenue: |  |  |  |  |  |  |
Screening revenue(1) | $ | 32,807 |  |  | $ | 25,374 |  |  | $ | 96,319 |  |  | $ | 77,076 |
Development services revenue | 3,387 |  |  | 3,278 |  |  | 7,256 |  |  | 10,267 |
Total revenue | 36,194 |  |  | 28,652 |  |  | 103,575 |  |  | 87,343 |
Costs and operating expenses: |  |  |  |  |  |  |
Cost of screening revenue (exclusive of amortization of intangible assets)(2) | 15,910 |  |  | 15,970 |  |  | 52,379 |  |  | 45,481 |
Cost of development services revenue(3) | 544 |  |  | 1,442 |  |  | 2,216 |  |  | 3,499 |
Cost of revenue — amortization of intangible assets | 33,473 |  |  | 33,473 |  |  | 100,417 |  |  | 100,417 |
Research and development(4) | 48,647 |  |  | 78,231 |  |  | 148,898 |  |  | 274,052 |
Sales and marketing | 25,503 |  |  | 35,625 |  |  | 89,021 |  |  | 123,433 |
General and administrative(5) | 37,408 |  |  | 47,418 |  |  | 120,396 |  |  | 171,745 |
Goodwill and intangible assets impairment | — |  |  | — |  |  | 28,000 |  |  | 1,420,936 |
Total costs and operating expenses | 161,485 |  |  | 212,159 |  |  | 541,327 |  |  | 2,139,563 |
Loss from operations | (125,291) |  |  | (183,507) |  |  | (437,752) |  |  | (2,052,220) |
Other income: |  |  |  |  |  |  |
Interest income | 6,107 |  |  | 11,661 |  |  | 20,695 |  |  | 17,367 |
Other income (expense), net | 466 |  |  | (561) |  |  | (929) |  |  | (514) |
Total other income, net | 6,573 |  |  | 11,100 |  |  | 19,766 |  |  | 16,853 |
Loss before income taxes | (118,718) |  |  | (172,407) |  |  | (417,986) |  |  | (2,035,367) |
Benefit from income taxes | 29,741 |  |  | 46,719 |  |  | 108,811 |  |  | 105,428 |
Net loss | $ | (88,977) |  |  | $ | (125,688) |  |  | $ | (309,175) |  |  | $ | (1,929,939) |
Net loss per share — Basic and Diluted | $ | (2.46) |  |  | $ | (3.94) |  |  | $ | (8.73) |  |  | $ | (61.61) |
Weighted-average shares of common stock used in computing net loss per share: | 36,124,256 |  |  | 31,880,054 |  |  | 35,415,266 |  |  | 31,326,117 |

(1) Includes related party screening revenue of $50 and $179 for the three and nine months ended September 30, 2025 and $129 and $366 for the three and nine months ended September 30, 2024, respectively.
(2) Includes related party cost of screening revenue of $1,237 and $3,924 for the three and nine months ended September 30, 2025 and $3,658 and $9,784 for the three and nine months ended September 30, 2024, respectively.
(3) Includes related party cost of development services revenue of $78 and $260 for the three and nine months ended September 30, 2025 and $143 and $259 for the three and nine months ended September 30, 2024, respectively.
(4) Includes related party research and development expenses of $973 and $2,947 for the three and nine months ended September 30, 2025 and $6,588 and $16,700 for the three and nine months ended September 30, 2024, respectively.
(5) Includes related party general and administrative expenses of nil for the three and nine months ended September 30, 2025 and $1 and $104 for the three and nine months ended September 30, 2024, respectively.
See accompanying notes to unaudited condensed consolidated financial statements.
3

Table of Contents
GRAIL, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(amounts in thousands)

| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Net loss | $ | (88,977) |  |  | $ | (125,688) |  |  | $ | (309,175) |  |  | $ | (1,929,939) |
Other comprehensive income (loss): |  |  |  |  |  |  |
Change in net unrealized gain (loss) on marketable securities | 172 |  |  | — |  |  | (137) |  |  | — |
Foreign currency translation adjustment | (19) |  |  | 800 |  |  | 1,142 |  |  | 1,120 |
Comprehensive loss | $ | (88,824) |  |  | $ | (124,888) |  |  | $ | (308,170) |  |  | $ | (1,928,819) |

See accompanying notes to unaudited condensed consolidated financial statements.
4

GRAIL, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(amounts in thousands, except share data)

| Common Stock |  |  |  |  |  |  |  |  |  |
| Shares |  | Amount |  |  |  | Additional Paid in Capital |  | Accumulated Other Comprehensive Income |  | Accumulated Deficit |  | Total Stockholders’ Equity
Balance as of December 31, 2024 | 33,893,409 |  |  | $ | 34 |  |  |  |  | $ | 12,305,250 |  |  | $ | 1,451 |  |  | $ | (9,803,330) |  |  | $ | 2,503,405 |
Net loss | — |  |  | — |  |  |  |  | — |  |  | — |  |  | (106,213) |  |  | (106,213) |
Stock-based compensation expense | — |  |  | — |  |  |  |  | 16,261 |  |  | — |  |  | — |  |  | 16,261 |
Other comprehensive income | — |  |  | — |  |  |  |  | — |  |  | 215 |  |  | — |  |  | 215 |
Release of restricted stock units | 1,403,449 |  |  | 1 |  |  |  |  | (1) |  |  | — |  |  | — |  |  | — |
Balance as of March 31, 2025 | 35,296,858 |  |  | $ | 35 |  |  |  |  | $ | 12,321,510 |  |  | $ | 1,666 |  |  | $ | (9,909,543) |  |  | $ | 2,413,668 |
Net loss | — |  |  | — |  |  |  |  | — |  |  | — |  |  | (113,985) |  |  | (113,985) |
Stock-based compensation expense | — |  |  | — |  |  |  |  | 14,323 |  |  | — |  |  | — |  |  | 14,323 |
Other comprehensive income | — |  |  | — |  |  |  |  | — |  |  | 637 |  |  | — |  |  | 637 |
Release of restricted stock units | 750,941 |  |  | 1 |  |  |  |  | (1) |  |  | — |  |  | — |  |  | — |
Balance as of June 30, 2025 | 36,047,799 |  |  | $ | 36 |  |  |  |  | $ | 12,335,832 |  |  | $ | 2,303 |  |  | $ | (10,023,528) |  |  | $ | 2,314,643 |
Net loss | — |  |  | — |  |  |  |  | — |  |  | — |  |  | (88,977) |  |  | (88,977) |
Stock-based compensation expense | — |  |  | — |  |  |  |  | 14,144 |  |  | — |  |  | — |  |  | 14,144 |
Other comprehensive income | — |  |  | — |  |  |  |  | — |  |  | 153 |  |  | — |  |  | 153 |
Release of restricted stock units | 113,199 |  |  | — |  |  |  |  | — |  |  | — |  |  | — |  |  | — |
Balance as of September 30, 2025 | 36,160,998 |  |  | $ | 36 |  |  |  |  | $ | 12,349,976 |  |  | $ | 2,456 |  |  | $ | (10,112,505) |  |  | $ | 2,239,963 |

See accompanying notes to unaudited condensed consolidated financial statements.
5

GRAIL, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’/ MEMBER’S EQUITY
(unaudited)
(amounts in thousands, except share data)

| Common Stock |  |  |  |  |  |  |  |  |  |
| Shares |  | Amount |  | Member’s Equity |  | Additional Paid in Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Accumulated Deficit |  | Total Stockholders’/Member’s Equity
Balance as of December 31, 2023 | — |  |  | $ | — |  |  | $ | 11,421,446 |  |  | $ | — |  |  | $ | 1,066 |  |  | $ | (7,776,325) |  |  | $ | 3,646,187 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (218,914) |  |  | (218,914) |
Stock-based compensation expense | — |  |  | — |  |  | 170 |  |  | — |  |  | — |  |  | — |  |  | 170 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | — |  |  | (52) |  |  | — |  |  | (52) |
Contribution from member, net | — |  |  | — |  |  | 312,000 |  |  | — |  |  | — |  |  | — |  |  | 312,000 |
Balance as of March 31, 2024 | — |  |  | $ | — |  |  | $ | 11,733,616 |  |  | $ | — |  |  | $ | 1,014 |  |  | $ | (7,995,239) |  |  | $ | 3,739,391 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,585,337) |  |  | (1,585,337) |
Stock-based compensation expense | — |  |  | — |  |  | 156 |  |  | 640 |  |  | — |  |  | — |  |  | 796 |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | 372 |  |  | — |  |  | 372 |
Recognition of deferred tax liability in connection with the Spin-Off* | — |  |  | — |  |  | (447,190) |  |  | — |  |  | — |  |  | — |  |  | (447,190) |
Reclassification of incentive plan liabilities to additional paid-in capital | — |  |  | — |  |  | — |  |  | 54,795 |  |  | — |  |  | — |  |  | 54,795 |
Disposal funding received in connection with the Spin-Off* | — |  |  | — |  |  | 932,300 |  |  | — |  |  | — |  |  | — |  |  | 932,300 |
Issuance of common stock in connection with the Spin-Off and reclassification of contribution from member, net* | 31,049,148 |  |  | 31 |  |  | (12,218,882) |  |  | 12,218,851 |  |  | — |  |  | — |  |  | — |
Balance as of June 30, 2024 | 31,049,148 |  |  | $ | 31 |  |  | $ | — |  |  | $ | 12,274,286 |  |  | $ | 1,386 |  |  | $ | (9,580,576) |  |  | $ | 2,695,127 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (125,688) |  |  | (125,688) |
Stock-based compensation expense | — |  |  | — |  |  | — |  |  | 17,397 |  |  | — |  |  | — |  |  | 17,397 |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | 800 |  |  | — |  |  | 800 |
Release of restricted stock units | 2,154,596 |  |  | 2 |  |  | — |  |  | (2) |  |  | — |  |  | — |  |  | — |
Balance as of September 30, 2024 | 33,203,744 |  |  | $ | 33 |  |  | $ | — |  |  | $ | 12,291,681 |  |  | $ | 2,186 |  |  | $ | (9,706,264) |  |  | $ | 2,587,636 |

See accompanying notes to unaudited condensed consolidated financial statements.
___________
*See Note 1 — Organization And Description Of Business for more information on the Spin-Off.
6

Table of Contents
GRAIL, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
(amounts in thousands)

| Nine Months Ended
| September 30, 2025 |  | September 30, 2024
Cash flows from operating activities |  |  |
Net loss | $ | (309,175) |  |  | $ | (1,929,939) |
Adjustments to reconcile net loss to net cash used by operating activities: |  |  |
Amortization of intangibles assets | 103,750 |  |  | 103,750 |
Depreciation | 13,686 |  |  | 14,865 |
Stock-based compensation expense | 44,518 |  |  | 72,502 |
Cash payment for equity awards | — |  |  | (53,807) |
Deferred income taxes | (108,811) |  |  | (104,990) |
Amortization of discount on marketable securities | (16,606) |  |  | — |
Goodwill and intangible assets impairment | 28,000 |  |  | 1,420,936 |
Credit loss expense | 518 |  |  | — |
Other | 1,370 |  |  | 949 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable, net(1) | 3,512 |  |  | 1,731 |
Supplies(2) | 452 |  |  | 482 |
Operating lease right-of-use assets and liabilities, net | 761 |  |  | 1,545 |
Prepaid expenses and other assets(3) | 3,346 |  |  | (1,278) |
Accounts payable(4) | (1,437) |  |  | (12,203) |
Accrued and other liabilities(5) | 894 |  |  | 1,791 |
Net cash used in operating activities | (235,222) |  |  | (483,666) |
Cash flows from investing activities |  |  |
Purchases of property and equipment | (815) |  |  | (4,905) |
Purchases of marketable securities | (741,932) |  |  | — |
Proceeds from maturities of marketable securities | 894,400 |  |  | — |
Net cash provided by (used in) investing activities | 151,653 |  |  | (4,905) |
Cash flows from financing activities |  |  |
Cash funding received from Illumina | — |  |  | 1,244,300 |
Net cash provided by financing activities | — |  |  | 1,244,300 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (148) |  |  | 228 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (83,717) |  |  | 755,957 |
Cash, cash equivalents and restricted cash — beginning of period | 217,583 |  |  | 101,512 |
Cash, cash equivalents and restricted cash — end of period | $ | 133,866 |  |  | $ | 857,469 |
Represented by: |  |  |
Cash and cash equivalents | $ | 126,892 |  |  | $ | 853,551 |
Restricted cash | 6,974 |  |  | 3,918 |
Total | $ | 133,866 |  |  | $ | 857,469 |
Supplemental cash flow information: |  |  |
Property and equipment included in accounts payable and accrued liabilities | $ | (70) |  |  | $ | (231) |
Operating cash flows paid for operating leases, net | $ | (12,673) |  |  | $ | (14,773) |

(1) Includes changes in related party accounts receivable of $31 and $32, respectively.
(2) Includes changes in related party supplies of $2,155 and $1,329, respectively.
(3) Includes changes in related party prepaid and other current assets of $15 and $(24), respectively.
(4) Includes changes in related party accounts payable of $54 and $(824), respectively.
(5) Includes changes in related party accrued liabilities of $(10) and $2,726, respectively.
See accompanying notes to unaudited condensed consolidated financial statements.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
GRAIL, Inc. (“GRAIL” or the “Company”), headquartered in Menlo Park, Californi a, is an innovative commercial-stage healthcare company focused on saving lives and shifting the paradigm of early cancer detection. The Company’s Galleri blood test is a commercially available screening test for early detection of multiple types of cancer. GRAIL’s common stock is listed under the ticker symbol “GRAL” on the Nasdaq Stock Exchange.
GRAIL was previously acquired by Illumina, Inc. (”Illumina”) in August 2021, at which point it became a 100% owned subsidiary of Illumina, and held separate as a part of binding hold separate commitments implemented pursuant to orders issued by the European Commission (the “Acquisition”). GRAIL separated from Illumina on June 24, 2024, as described below. GRAIL was a limited liability company (“LLC”) from August 19, 2021 to June 21, 2024 when it was converted into a corporation (the “Conversion”) in anticipation of such separation.
Separation from Illumina
On June 24, 2024, (the “Distribution Date”), Illumina completed the previously announced spin-off of GRAIL (the “Spin-Off”). The Spin-Off was completed through a distribution of 85.5% of the Company’s outstanding common stock to the holders of record of Illumina’s common stock as of the close of business on June 13, 2024 (the “Distribution”), which resulted in the distribution of 31.0 million shares of common stock. As a result of the Distribution, the Company became an independent public entity. Illumina’s ownership of GRAIL reduced to 4,502,126 shares of common stock representing 14.5% ownership of the Company after the Spin-Off. Unless the context otherwise requires, references to the “Company” or “GRAIL”, refer to (i) GRAIL, LLC prior to the Conversion and (ii) GRAIL, Inc. and its subsidiaries following the Conversion.
In co nnection with the Spin-Off, the Company entered into or adopted agreements that provide a framework for the relationship between the Company and Illumina, including, but not limited to the following:
•Separation and Distribution Agreement — governed the terms and conditions of the Spin-Off and sets forth aspects of the Company’s and Illumina’s relationship following the Spin-Off. See Note 9 — Legal And Regulatory Proceedings for more information regarding the contingencies related to this agreement.
•Tax Matters Agreement — governs the respective rights, responsibilities and obligations of Illumina and the Company after the Spin-Off with respect to all tax matters and includes restrictions to preserve the tax-free status of the Distribution. See Note 12 — Taxes for more information regarding income taxes and Note 9 — Legal And Regulatory Proceedings regarding the contingencies related to this agreement.
•Employee Matters Agreement — addressed employment, compensation, and benefits matters, including the allocation and treatment of assets and liabilities relating to employees and compensation and benefits plan s and programs in which GRAIL employees participate, as well as the treatment of cash-based incentive awards in connection with the Spin-Off. See Note 8 — Stock-Based Compensation for further details regarding the treatment of equity awards.
•Stockholder and Registration Rights Agreement — governs the respective rights, responsibilities and obligations of Illumina and the Company after the Spin-Off with respect to Illumina’s continuing ownership of GRAIL common stock.
•Supply and Commercialization Agreement Amendment — amended the Company’s supply and commercialization agreement with Illumina, which governs the ongoing supply and commercial relationship, including licensing, royalty payments and intellectual property between GRAIL and Illumina. See Note 14 — Related Party Transactions for more information regarding the royalty arrangements with Illumina.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Illumina provided the Company with disposal funding (the “Disposal Funding”) in the amount of $932.3 million in accordance with the Separation and Distribution Agreement, which was subject to a clawback feature that lapsed on September 24, 2025. See Note 9 — Legal And Regulatory Proceedings — Contingencies for details.
Our Ability to Continue as a Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to manage its net loss and to become profitable and operate profitably, to manage the Company’s negative cash flows from operations and to generate positive cash flows from operations, and the Company’s ability to obtain financing to support working capital requirements. The Company had $126.9 million of cash and cash equivalents and $413.2 million of short-term marketable securities as of September 30, 2025.
The Company believes that its existing cash, cash equivalents, and short-term marketable securities will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months, as of the date these unaudited condensed consolidated financial statements were filed.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements represent the historical operations of the standalone GRAIL legal entity and include purchase accounting adjustments and certain tax adjustments as if the Company filed a separate income tax return and was not included in Illumina’s consolidated return for the period of time the Company was owned by Illumina. All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the unaudited condensed consolidated financial statements. Certain a ssets and liabilities were reflected at fair value under the new basis of accounting established at the closing of the Acquisition.
Management considered the need to allocate any historical shared costs incurred by the parent, Illumina, to the accompanying unaudited condensed consolidated financial statements. As previously discussed, the European Commission adopted an order requiring Illumina and GRAIL to be held and operated as distinct and separate entities. As no integration ever occurred, management concluded that no material allocations were required. Prior to the Spin-Off, the Company had generated net operating loss carryforwards for federal and state tax purposes, however, as a single member LLC disregarded for tax purposes, these tax attributes are the sole property of Illumina and remained the assets of Illumina following the Spin-off in accordance with the Internal Revenue Code. However, amounts recognized by the Company are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company operated independently of the parent. Related party transactions with Illumina are discussed further in Note 14 — Related Party Transactions.
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and pursuant to this Quarterly Report on Form 10-Q (“Form 10-Q”) and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. These unaudited condensed consolidated financial statements, reflect all normal recurring adjustments that are necessary to present the results fairly, and include the accounts of the Company and its wholly owned subsidiaries for the interim periods presented. All intercompany balances have been eliminated in consolidation. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2024 Form 10-K.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Significant Accounting Policies
During the nine months ended September 30, 2025, there were no material changes to the Company’s significant accounting policies disclosed in Note 2 — Summary of Significant Accounting Policies, within the consolidated financial statements for the year ended December 31, 2024 included in its 2024 Form 10-K, except as described below.
Leases
Leases are classified as operating or financing at lease inception and as necessary at modification. Leased assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.
Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When readily determinable, the Company uses the rate implicit in the lease to discount lease payments; however, when the rate is not readily determinable, the Company uses the incremental borrowing rate based on the information available at the commencement date. The incremental borrowing rate is the rate of interest that a company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and in a similar economic environment. The operating lease ROU asset also includes any initial direct costs, lease payments made prior to lease commencement, and lease incentives received. Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities.
For each lease, the determined lease term is based on a noncancellable period, including any rent-free periods provided by the lessor, and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease cost for lease payments is recognized on a straight-line basis over the lease term. Certain lease agreements contain lease and non-lease components. The Company accounts for non-lease components as part of the lease component to which they relate.
The Company does not recognize ROU assets and lease liabilities for short-term leases, which have a lease term of twelve months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise.
Intangible Assets
Intangible assets identified in the Acquisition include GRAIL trade names, developed technology, and GRAIL in-process research and development (“IPR&D”) and were measured at fair value as of the Closing Date.
The Company’s trade names, GRAIL and Galler i, have brand recognition in the market related to the services GRAIL provides customers and the research and development activities GRAIL performs. GRAIL’s developed technology includes intangible assets related to Galler i, its multi-cancer early detection test that was launched as a laborator y-developed test (“LDT”) in 2021, as well as a diagnostic aid for cancer (“DAC”) test. The developed technology underpins both Galler i, designed as a cancer screening test for asymptomatic individuals over 50 years of age, and DAC that is being designed to accelerate diagnostic resolution for patients for whom there is a clinical suspicion of cancer. The cost of identifiable intangible assets with finite lives, such as trade names and developed technology assets, are amortized on a straight-line basis over the assets’ respective estimated useful lives of 9 years and 18 years, respectively.
The Company’s IPR&D includes assets related to GRAIL’s development of a minimal residual disease (“MRD”) test, a post-diagnostic test, that is currently under development. IPR&D is considered indefinit e-lived and therefore is not amortized until completed and placed into service, at which point it will begin to be amortized over its estimated useful life or expensed upon abandonment of the associated research and development efforts.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
While IPR&D is not amortize d, it is reviewed for impairment at least annually, or more frequently if events or circumstances indicate a potential for impairment. IPR&D is considered impaired if the carrying value of the reporting unit or IPR&D asset exceeds its respective fair value.
During the indefinite-lived intangible asset impairment review, the Company assesses the qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset fair value is less than the carrying amount. The qualitative factors considered include, but are not limited to, macroeconomic conditions, industry and market considerations, and the Company’s overall financial performance. If the Company determines that it is not more likely than not that the intangible asset is less than the carrying amount, no additional assessment is necessary. If the carrying amount of the intangible asset exceeds its fair value, the Company records an impairment loss based on the excess. The Company may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative indefinite-lived intangible asset impairment test.
Stock- Based Compensation Expense - 2024 Employee Stock Purchase Plan
The fair value of shares to be issued under the Company’s 2024 Employee Stock Purchase Plan (“ESPP”), is derived using the Black-Scholes-Merton option-pricing model at the commencement of six-month purchase periods in May and November of each year. The Company’s first offering period began in May 2025 with the first purchase date expected to take place in November 2025. Stock-based compensation for the ESPP is expensed using a straight-line attribution method over the offering period. Additionally, forfeitures are accounted for as incurred.
Concentration Risk
Significant customers are those that represent more than ten percent of total revenue or accounts receivable, net balances for the periods and as of each condensed consolidated balance sheet date presented, respectively. Revenue from a major customer that amounts to 10% or more of total revenue is as follows:

| Three Months Ended |  | Nine Months Ended
| September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Customer A | * |  | 10 | % |  | * |  | 10 | %

*less than 10%
Customers that accounted for 10% or more of total accounts receivable balance are as follows:

| As of
| September 30, 2025 |  | December 31, 2024
Customer A | 12 | % |  | 32 | %

*less than 10%
Reclassification
Certain amounts relating to related party transactions in the unaudited condensed consolidated statements of operations and statements of cash flows for the respective periods ended September 30, 2024 have been conformed to the current period presentation of related party transactions.
Accounting Pronouncements Not Yet Adopted
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update improves income tax disclosure requirements, primarily through enhanced transparency and decision usefulness of disclosures. This guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted, and can be applied on either a prospective or retroactive basis. The Company is currently compiling the information required for these disclosures and expects to provide the required disclosures in the year ending December 31, 2025.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. This update intends to improve financial reporting by requiring disclosure of additional information about specific expense categories. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and the guidance is to be applied prospectively and may be applied retrospectively. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update provides entities with a practical expedient related to developing reasonable and supportable forecasts as part of estimating expected credit losses, in which entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. This guidance is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. This guidance is effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The transition method may be prospective, modified, or retrospective. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
NOTE 3. REVENUE
The following table presents the Company’s revenue disaggregated by geographic areas based on the customers’ locations:

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
United States |  |  |  |  |  |  |
Screening | $ | 32,570 |  |  | $ | 25,374 |  |  | $ | 95,482 |  |  | $ | 77,076 |
Development Services | 78 |  |  | 484 |  |  | 332 |  |  | 1,149 |
International(1) |  |  |  |  |  |  |
Screening | 237 |  |  | — |  |  | 837 |  |  | — |
Development Services | 3,309 |  |  | 2,794 |  |  | 6,924 |  |  | 9,118 |
Total | $ | 36,194 |  |  | $ | 28,652 |  |  | $ | 103,575 |  |  | $ | 87,343 |

_________
(1) International region includes revenue earned from customers located outside of the United States.
The following table presents the Company’s revenue disaggregated by revenue source:
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Screening |  |  |  |  |  |  |
Commercial | $ | 31,428 |  |  | $ | 25,333 |  |  | $ | 93,681 |  |  | $ | 77,035 |
Government(1) | 1,379 |  |  | 41 |  |  | 2,638 |  |  | 41 |
Development Services |  |  |  |  |  |  |
Commercial | 3,387 |  |  | 3,278 |  |  | 7,256 |  |  | 10,267 |
Total | $ | 36,194 |  |  | $ | 28,652 |  |  | $ | 103,575 |  |  | $ | 87,343 |

_________
(1) Government screening revenue primarily consists of revenue earned as part of the Company’s Galleri-Medicare clinical study.
NOTE 4. GOODWILL AND INTANGIBLE ASSETS
Due to the application of pushdown accounting, the Company’s balance sheet includes goodwill and intangible assets recognized by Illumina in connection with Illumina’s acquisition of the Company.
Goodwill Impairment
Goodwill represents the excess of purchase price Illumina paid over the fair value of the net identifiable assets acquired upon the acquisition of the Company.
During the three months ended June 30, 2024, prior to the Spin-Off, the approval of the Spin-Off by Illumina’s board of directors represented a potential indicator of impairment, which also aligned with the timing of Illumina’s annual goodwill impairment test date for 2024. The assessment was performed using a market approach to determine the fair value of goodwill which utilized the valuation ranges prepared by the divestment financial advisors engaged by Illumina in connection with the Spin-Off. The valuation ranges were determined using revenue multiples from public company peers for comparable companies. The implied discount rate for the goodwill impairment assessment was 51.5%. These estimates and assumptions represent a Level 3 measurement because they include unobservable inputs that are supported by little or no market activity and reflect Company-determined and judgmental factors for these assumptions in measuring fair value. The assumptions in the assessment of an impairment analysis are inherently subjective due to uncertainty and any slight changes in these rates and assumptions could have a significant impact on the concluded value of goodwill. The Company recognized a goodwill impairment of $888.9 million as a result of the impairment assessment, primarily due to changes to the forecast of GRAIL’s value and the method for valuing GRAIL.
Intangible Assets
Intangible assets identified in the Acquisition include developed technology, trade names and IPR&D and were measured at fair value as of the closing date of Illumina’s acquisition of the Company (“Closing Date”).
The following roll-forward indicates the fair values assigned to finite-lived intangible assets from the Acquisition and the resulting amortization:

| As of
| September 30, 2025 |  | December 31, 2024
(in thousands) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Intangible Assets |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Intangible Assets
Developed Technologies | $ | 2,410,000 |  |  | $ | (546,713) |  |  | $ | 1,863,287 |  |  | $ | 2,410,000 |  |  | $ | (446,297) |  |  | $ | 1,963,703 |
Trade Names | 40,000 |  |  | (18,147) |  |  | 21,853 |  |  | 40,000 |  |  | (14,813) |  |  | 25,187 |
Total Finite-Lived Intangible Assets | $ | 2,450,000 |  |  | $ | (564,860) |  |  | $ | 1,885,140 |  |  | $ | 2,450,000 |  |  | $ | (461,110) |  |  | $ | 1,988,890 |

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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following roll-forward indicates the carrying value of the indefinite-lived intangible asset from the Acquisition and the impairment expenses recorded:

(in thousands) | IPR&D
Balance as of January 1, 2024 | $ | 560,000 |
Impairment | (532,000) |
Balance as of December 31, 2024 | 28,000 |
Impairment | (28,000) |
Balance as of September 30, 2025 | $ | — |

In conjunction with Illumina’s Q2 2024 goodwill impairment assessment, the IPR&D intangible asset of the GRAIL reporting unit was evaluated for potential impairment by Illumina prior to the Spin-Off. The evaluation for a potential impairment of the IPR&D intangible asset was performed by comparing its carrying value to the assessed estimated fair value, which was determined by the income approach, using a discounted cash flow model. Estimates and assumptions used in the income approach included projected cash flows and a discount rate. The discount rate selected at the time of the IPR&D intangible impairment assessment prior to the Spin-Off was 46.5%. Based on the impairment test performed, Illumina assessed and determined that the carrying value of GRAIL’s IPR&D intangible asset exceeded its estimated fair value. As a result of push down accounting, the Company recognized an impairment of $420.0 million primarily due to changes to revenue projections and the discount rate utilized.
In Q2 2024, subsequent to the Spin-Off, the Company performed a portfolio review and determined to decrease investment in the development of the IPR&D asset, which impacted the amount and timing of expected future cash flows attributable to IPR&D. This determination was driven by the impact of the Company’s post-Spin-Off capital structure, constitution of the Company’s Board at the time of the Spin-Off as the key decision maker for the determination, and increased ability to revisit the Company’s business strategy and portfolio as a standalone public company without regulatory oversight. This represented a potential impairment indicator. An impairment assessment was performed using a discounted cash flow model utilizing the updated projected cash flows and discount rate. The discount rate selected was 20%. Based on the impairment test performed, the Company assessed and determined that the carrying value of the IPR&D intangible asset exceeded its estimated fair value. As a result, the Company recognized an additional impairment of $112.0 million, primarily due to a decrease in projected cash flows.
In Q2 2025, the Company identified a change in market conditions in relation to its IPR&D asset which is in development. The change is expected to impact the amount of future cash flows attributable to the technology underlying the IPR&D asset. This represented a potential impairment indicator. An impairment assessment was performed using a discounted cash flow model utilizing the updated projected cash flows and discount rate. The discount rate selected was 21%. Based on the impairment test performed, the Company assessed and determined that the carrying value of the IPR&D intangible asset exceeded its estimated fair value. As a result, the Company recognized an impairment of $28.0 million, resulting in write off of the entire carrying value of the IPR&D asset.
The estimates and assumptions updated in each of these evaluations represent a Level 3 measurement because they include unobservable inputs that are supported by little or no market activity and reflect Company- determined and judgmental factors for these assumptions in measuring a fair value. The assumptions in the assessment of an impairment analysis are inherently subjective due to uncertainty and any slight changes in these rates and assumptions could have a significant impact on the concluded value of the IPR&D intangible asset.
Amortization expense related to finite-lived intangible assets was $34.6 million for each of the three month periods ended September 30, 2025 and 2024 and $103.8 million for each of the nine month periods ended September 30, 2025 and 2024.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The estimated future annual amortization of finite-lived intangible assets is shown in the following table. Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and asset impairments, among other factors.

(in thousands) | Estimated Annual Amortization
Remainder of 2025 | $ | 34,583 |
2026 | 138,333 |
2027 | 138,333 |
2028 | 138,333 |
2029 | 138,333 |
2030 and thereafter | 1,297,225 |
Total | $ | 1,885,140

NOTE 5. BALANCE SHEET COMPONENTS
The following tables present financial information of certain condensed consolidated balance sheet components:

| As of
Accounts receivable, net | September 30, 2025 |  | December 31, 2024
(in thousands) |  |  |
Trade accounts receivable, gross | $ | 21,785 |  |  | $ | 24,099 |
Allowance for credit losses | (5,503) |  |  | (3,787) |
Total accounts receivable, net | $ | 16,282 |  |  | $ | 20,312 |

| As of
Accrued liabilities | September 30, 2025 |  | December 31, 2024
(in thousands) |  |  |
Accrued compensation expenses | $ | 31,171 |  |  | $ | 34,530 |
Accrued clinical studies and research and development expenses | 15,966 |  |  | 13,027 |
Accrued legal and professional service expenses | 4,304 |  |  | 2,966 |
Accrued other expenses | 6,635 |  |  | 6,718 |
Total accrued liabilities | $ | 58,076 |  |  | $ | 57,241 |

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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 6. FAIR VALUE MEASUREMENTS, CASH EQUIVALENTS AND MARKETABLE SECURITIES
The following tables represent the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

| September 30, 2025
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets: |  |  |  |  |  |  |
Money market funds | $ | 124,936 |  |  | $ | 124,936 |  |  | $ | — |  |  | $ | — |
Total cash equivalents | 124,936 |  |  | 124,936 |  |  | — |  |  | — |
U.S. government treasury bills | 413,238 |  |  | 413,238 |  |  | — |  |  | — |
Total short-term marketable securities | 413,238 |  |  | 413,238 |  |  | — |  |  | — |
Total | $ | 538,174 |  |  | $ | 538,174 |  |  | $ | — |  |  | $ | — |

| December 31, 2024
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets: |  |  |  |  |  |  |
Money market funds | $ | 94,697 |  |  | $ | 94,697 |  |  | $ | — |  |  | $ | — |
U.S. government treasury bills | 117,442 |  |  | 117,442 |  |  | — |  |  | — |
Total cash equivalents | 212,139 |  |  | 212,139 |  |  | — |  |  | — |
U.S. government treasury bills | 549,236 |  |  | 549,236 |  |  | — |  |  | — |
Total short-term marketable securities | 549,236 |  |  | 549,236 |  |  | — |  |  | — |
Total | $ | 761,375 |  |  | $ | 761,375 |  |  | $ | — |  |  | $ | — |

The following tables summarize the Company’s cash equivalents and marketable securities’ amortized costs, gross unrealized gains, gross unrealized losses and estimated fair values by significant investment category:

| September 30, 2025
(in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
Money market funds | $ | 124,936 |  |  | $ | — |  |  | $ | — |  |  | $ | 124,936 |
U.S. government treasury bills | 413,108 |  |  | 130 |  |  | — |  |  | 413,238 |
Total | $ | 538,044 |  |  | $ | 130 |  |  | $ | — |  |  | $ | 538,174 |

| December 31, 2024
(in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
Money market funds | $ | 94,697 |  |  | $ | — |  |  | $ | — |  |  | $ | 94,697 |
U.S. government treasury bills | 666,412 |  |  | 266 |  |  | — |  |  | 666,678 |
Total | $ | 761,109 |  |  | $ | 266 |  |  | $ | — |  |  | $ | 761,375 |

All of the Company’s marketable securities had maturities of less than one year.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The Company had one security with a fair value of $18.3 million in an unrealized loss position as of September 30, 2025 and no securities in unrealized loss position as of December 31, 2024. None of the Company’s marketable securities had been in an unrealized loss position for more than one year as of September 30, 2025 and December 31, 2024. 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, 2025 because the change in market value for the security that was in an unrealized loss position resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers. The Company does not intend to sell the money market funds and short term investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 7. LEASES
The Company has entered into operating leases for facilities and equipment used for research and development. Operating leases have remaining lease terms which range from approximately 1 to 8 years, and often include one or more options to renew. These renewal terms can extend the lease term from 5 to 15 years and are included in the lease term when it is reasonably certain that the option will be exercised. The exercise of lease renewal and termination options are at the sole discretion of the Company. The Company also has variable lease payments that are primarily comprised of common area maintenance and utility charges.
The Company’s weighted average remaining lease term was approximately 7.0 years and 7.3 years as of September 30, 2025 and December 31, 2024, respectively. The Company’s weighted average discount rate for operating leases was 2.6% and 2.5% as of September 30, 2025, and December 31, 2024, respectively.
The components of lease costs are as follows:

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Operating lease costs | $ | 4,427 |  |  | $ | 4,563 |  |  | $ | 13,338 |  |  | $ | 14,436 |
Variable lease costs | 1,003 |  |  | 1,124 |  |  | 3,058 |  |  | 3,618 |
Total lease costs | $ | 5,430 |  |  | $ | 5,687 |  |  | $ | 16,396 |  |  | $ | 18,054 |

Future undiscounted lease payments under operating leases as of September 30, 2025 were as follows:

(in thousands) | Amount
Remainder of 2025 | $ | 2,871 |
2026 | 14,921 |
2027 | 8,442 |
2028 | 8,232 |
2029 | 8,448 |
2030 and thereafter | 32,132 |
Total undiscounted lease payments | 75,046 |
Less: Imputed interest | (6,726) |
Less: Tenant improvement allowance* | (9,730) |
Total operating lease liabilities | $ | 58,590 |

_________
*Tenant improvement allowance is estimated to be received as follows: approximately $0.4 million in the next twelve months and $9.3 million thereafter.
Excluded from the lease obligation table above is a commercial lease agreement (the “Lease”) entered into by and between the Company and Sunnyvale Office Acquisition, LLC, as of September 11, 2025, pursuant to which the Company agreed to lease an aggregate of approximately 75,556 rentable square feet for a new corporate headquarters in Sunnyvale, California, which will be recognized as an operating lease upon the lease commencement date. The actual timing of lease commencement for accounting purposes, as well as the Company’s obligation to begin making payments and recognizing rental and other expenses, is dependent upon when the space is made available to the Company and the Company obtains control of the underlying asset. The Company’s current estimate of the total estimated aggregate base rent payments, excluding the renewal option and option to expand into additional space, for this leased office space are approximately $62.1 million.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 8. STOCK-BASED COMPENSATION
Stock-based compensation expense, which includes expense for both equity and liability-classified awards, reported in the condensed consolidated statements of operations, was as follows:

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Cost of screening revenue (exclusive of amortization of intangible assets) | $ | 271 |  |  | $ | 400 |  |  | $ | 1,433 |  |  | $ | 1,321 |
Cost of development services revenue | — |  |  | 178 |  |  | 17 |  |  | 201 |
Research and development | 4,330 |  |  | 6,838 |  |  | 12,089 |  |  | 27,906 |
Sales and marketing | 2,499 |  |  | 2,434 |  |  | 8,300 |  |  | 12,786 |
General and administrative | 7,039 |  |  | 7,599 |  |  | 22,679 |  |  | 30,288 |
Stock-based compensation expense, before taxes | 14,139 |  |  | 17,449 |  |  | 44,518 |  |  | 72,502 |
Related income tax benefits | (637) |  |  | (4,230) |  |  | (5,931) |  |  | (17,598) |
Stock-based compensation expense, net of taxes | $ | 13,502 |  |  | $ | 13,219 |  |  | $ | 38,587 |  |  | $ | 54,904 |

2024 Incentive Award Plan
The GRAIL, Inc. 2024 Incentive Award Plan (the “2024 Plan”) was adopted by GRAIL and approved by Illumina, in its capacity as GRAIL’s sole stockholder, in May 2024. The 2024 Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, performance-based awards, and other stock or cash based awards. The maximum number of shares authorized for issuance under the 2024 Plan increased by 1,694,670 shares to 10,351,487 shares on January 1, 2025 pursuant to the annual automatic evergreen increase provision of the 2024 Plan. As of September 30, 2025, approximately 481,705 shares remained available for future grants under the 2024 Plan.
2024 Inducement Award Plan
The GRAIL, Inc. 2024 Inducement Award Plan (the “2024 Inducement Plan”) was adopted by GRAIL’s board of directors on August 9, 2024. The 2024 Inducement Plan is used exclusively for the grant of equity awards to prospective employees who (i) were not previously employees of GRAIL, or (ii) are returning to GRAIL following a bona fide period of non-employment, in any case, in connection with and as an inducement material to such prospective employee’s entering into employment with GRAIL pursuant to Nasdaq Listing Rule 5635(c)(4). This plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, performance-based awards, and other stock or cash based awards. On May 14, 2025, GRAIL registered an additional 500,000 shares of common stock that may be offered under the 2024 Inducement Plan. The 2024 Inducement Plan does not have a specified limit on the number of shares authorized for issuance.
A summary of the Company’s restricted stock unit activity, issued under the 2024 Plan and 2024 Inducement Plan, is as follows:

| Restricted Stock Units |  | Weighted-Average Grant-Date Fair Value Per Share
(Units in thousands) |  |  |
Outstanding at January 1, 2025 | 5,523 |  | $14.22
Awarded | 2,370 |  | $38.60
Released | (2,268) |  | $15.36
Forfeited | (518) |  | $21.85
Outstanding at September 30, 2025 | 5,107 |  | $24.56

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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Cash-Based Equity Awards and 2024 Transition Incentive Awards
In connection with the Spin-Off in June 2024, outstanding cash-based equity incentive awards (the “Cash-Based Equity Awards”) and certain Cash-Based Equity Awards granted to GRAIL employees, including executives, for retention purposes in the second quarter of 2024 (the “2024 Transition Incentive Awards”), were converted into Company restricted stock units in accordance with the Employee Matters Agreement by dividing the aggregate award value by the volume-weighted average share price over the first four trading days following the Spin-Off. As a result of the modification, the Cash-Based Equity Awards and 2024 Transition Awards, which were liability-classified awards prior to the Spin-Off, were reclassified as equity-classified awards. The Cash-Based Equity Awards and the 2024 Transition Incentive Awards in the amount of $50.3 million and $4.4 million, respectively, were reclassified to Additional Paid-In Capital and converted into 4.0 million and 2.5 million RSUs, respectively. See Note 7 - Stock-based compensation in the 2024 Form 10-K for the year ended December 31, 2024 for further details.
2024 Employee Stock Purchase Plan
The ESPP was adopted by GRAIL and approved by Illumina’s Board of Directors, in its capacity as GRAIL’s sole stockholder, in May 2024. The maximum number of shares authorized for issuance under the ESPP increased by 338,934 shares to 752,955 shares on January 1, 2025 pursuant to the annual automatic evergreen increase provision of the ESPP. As of September 30, 2025, 752,955 shares were available for issuance under the ESPP.
Under the ESPP as currently implemented, eligible employees are offered shares through a six-month offering period commencing in May and November of each year. Employees who participate in the ESPP may elect to have up to 15% of their eligible compensation withheld to purchase shares of the Company’s common stock. The purchase price of the Company’s common stock will be equal to 85% of the lower of the fair market value of the Company’s common stock at the beginning of each offering period or the fair market value of the Company’s common stock at the end of the six-month offering period. The Company’s first offering period began in May 2025 with the first purchase date expected to take place in November 2025. No shares were offered under the ESPP during the three and nine month periods ended September 30, 2024. No shares were issued under the ESPP during the three and nine month periods ended September 30, 2025 or the three and nine month periods ended September 30, 2024.
The fair value of employee stock purchase rights under the ESPP have been estimated with the following assumptions using the Black-Scholes-Merton option-pricing model:

| Three and Nine Months Ended |
| September 30, 2025 |
Weighted-average assumptions: |  |
Expected life (in years) | 0.5 |
Risk-free interest rate | 4.2% |
Expected volatility | 108.7% |
Expected dividend | 0% |
Weighted-average estimated grant date fair value per share | $17.68 |

The expected term represents the term from the first day of the offering period to the purchase date. The risk-free interest rate assumption was based upon observed interest rates of Treasury bills appropriate for the expected term. The expected stock price volatility assumption was estimated using the average of the Company’s historical volatility and average volatility of the Company’s peer companies. The average of the Company’s peer companies and its own volatility is more representative of future stock price trends than the Company’s historical volatility due to its limited history as a public company. Expected dividend yield was 0% as the Company has not paid and does not anticipate paying dividends on its common stock.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
As of September 30, 2025, unrecognized compensation costs related to the ESPP was $0.6 million and is expected to be recognized over a weighted average period of 0.1 years.
Performance-Based Awards
During the nine months ended September 30, 2025, the Company granted performance-based restricted stock unit (“PSU”) awards under the 2024 Plan with vesting conditions tied to achievement of Company-specific performance and continued service. One-third of the PSUs subject to the awards vest upon the achievement of a Company-specific performance condition and the remaining two-thirds of the PSUs subject to the awards vest in substantially equal installments upon each of the first and second anniversaries of the initial vesting date, in each case, subject to the holder’s continued service with the Company through the applicable vesting date. The PSU awards had an aggregate grant date fair value of $1.0 million and expire, to the extent unvested, in May 2035. As of September 30, 2025, it was not probable that the performance conditions associated with the PSU awards will be achieved and, therefore, no stock-based compensation expense has been recognized in the unaudited condensed consolidated financial statements.
The Company also has one performance-based award outstanding for a former employee for which vesting is based on future revenues. The award has an aggregate potential value of up to $78.0 million and expires, to the extent unvested, on August 27, 2030. One-fourth of the total potential value of the award vests immediately upon the achievement of cumulative net revenues in any period of four consecutive fiscal quarters of $500.0 million, $750.0 million, $1.5 billion, and $2.0 billion. The Company assesses the probability of achieving the performance conditions associated with the award on a quarterly basis at each reporting period. If and to the extent that the liability becomes due and payable prior to 12:01 a.m. Eastern Time December 24, 2026 (the “Disposal Funding Period”) and paid by GRAIL, in cash, during the Disposal Funding Period, Illumina shall reimburse GRAIL all or such portion of the liability paid by GRAIL in accordance of the terms of the Separation and Distribution Agreement. As of September 30, 2025, it was not probable that the performance conditions associated with the award will be achieved and, therefore, no stock-based compensation expense, or corresponding loss recovery asset or liability, has been recognized in the unaudited condensed consolidated financial statements.
NOTE 9. LEGAL AND REGULATORY PROCEEDINGS
The Company is subject to various claims, complaints, regulatory proceedings, and legal actions that arise from time to time in the ordinary course of business.
Federal Securities Class Actions
On November 11, 2023, the first of three securities class action complaints was filed against Illumina and certain of its current and former executive officers in the United States District Court for the Southern District of California. The first-filed case is captioned Kangas v. Illumina, Inc. et al., the second-filed case is captioned Roy v. Illumina, Inc. et al., and the third-filed case is captioned Louisiana Sheriffs’ Pension & Relief Fund v. Illumina, Inc. et al. (collectively, the “Actions”). The complaints generally allege, among other things, that defendants made materially false and misleading statements and omitted material facts relating to Illumina’s acquisition of Grail. The complaints seek unspecified damages, interest, fees, and costs. On January 9, 2024, four movants filed motions to consolidate the Actions and to appoint a lead plaintiff (“Lead Plaintiff Motions”). On April 11, 2024, the Court issued an order consolidating the Actions into a single action (captioned in re Illumina, Inc. Securities Litigation No. 23-cv-2082-LL-MMP), and appointed Universal-Investment-Gesellschaft mbH, UI BVK Kapitalverwaltungsgesellschaft mbH, and ACATIS Investment Kapitalverwaltungsgesellschaft mbH as lead plaintiffs. (the “Lead Plaintiffs”). On June 21, 2024, the Lead Plaintiffs filed a consolidated amended complaint. The amended complaint alleges that GRAIL, in addition to Illumina, and certain of their respective current and former directors and others violated sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5 in connection with Illumina's acquisition of GRAIL and disclosures concerning the same. GRAIL has an indemnification obligation for certain current and former directors and officers involved in the matter pursuant to indemnification agreements entered into by these individuals and GRAIL. On September 13, 2024 the plaintiffs further amended the complaint. On November 12, 2024, the Company moved to dismiss Lead Plaintiffs’ second amended complaint for failure to state a claim under Sections 10(b) and 20(a) of the Exchange Act. Lead Plaintiffs
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
filed their opposition to the motion to dismiss on December 20, 2024, and the Company filed its reply in support of its motion to dismiss on February 3, 2025. On September 26, 2025, the court granted the motion to dismiss for failure to state a claim with leave to amend, and ordered the plaintiffs to file an amended complaint, if any, by October 27, 2025. On October 27, 2025, the Lead Plaintiffs filed their third amended complaint. The Company denies the allegations in the complaints and intends to vigorously defend the litigation. In light of the fact that the lawsuits are in an early stage, the Company cannot predict the ultimate outcome of the suits.
Other Legal Matters
Legal matters include various claims, complaints, and legal actions that arise from time to time. In addition to direct involvement in legal matters, the Company has entered into indemnification agreements with each of its current and former directors, executive officers, and certain other officers to provide these directors and officers, and has certain indemnification obligations under the Company’s charter and bylaws to these individuals, which may give rise to liability for the Company even if the Company is not directly named. The Company has indemnification obligations in respect of the Actions and with respect to other legal matters that may arise, or have arisen, from time to time. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows.
The Company is involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to employment matters. In connection with these matters, the Company assesses, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the unaudited condensed consolidated financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Since litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. The Company regularly reviews outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures. The Company may change its estimates if its assessment of the various factors changes and the amount of ultimate loss may differ from estimates, resulting in a material effect on the Company’s business, financial condition, results of operations, and/or cash flows. As of September 30, 2025, the Company is unable to estimate a range of possible loss in excess of the amounts accrued.
Contingencies
Contingencies primarily correspond to claims arising in the ordinary course of business. If necessary, these contingencies will be accrued, to the extent believed to be reasonably estimable to resolve the matter. The accrued contingency amounts are included in other current liabilities. Should the Company not be able to secure the terms it expects, these estimates may change and will be recognized in the period in which they are identified.
In connection with the Spin-Off, Illumina provided the Company with disposal funding in the amount of $932.3 million in accordance with the Separation and Distribution Agreement, which was subject to a clawback feature that lapsed on September 24, 2025.
On June 21, 2024, in connection with the Spin-Off, Illumina and the Company also entered into the Tax Matters Agreement to govern the respective rights, responsibilities and obligations of Illumina and the Company after the Spin-Off with respect to all tax matters and will include restrictions to preserve the tax-free status of the Distribution. The Tax Matters Agreement included a number of restrictions on the Company to preserve the intended tax treatment of the Spin-Off. Breach of any covenant or representation contained in the Tax Matters Agreement will result in liability to specific separation taxes. As of September 30, 2025, as it was not probable that the Company will breach the agreement, no contingent liability was recorded in connection with the Tax Matters Agreement.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 10. RESTRUCTURING
On August 9, 2024, following a portfolio review, the Company’s Board of Directors approved a restructuring plan (“Restructuring Plan”) designed to re-prioritize the Company’s resources to focus on its core multi-cancer early detection (“MCED”) business and reduce overall spend as the Company progresses towards completion of registrational studies and premarket approval application (“PMA”) submission. The Restructuring Plan was substantially completed in the fourth quarter of 2024, and the Company incurred $18.3 million of total restructuring charges from August 9, 2024 through December 31, 2024, consisting primarily of employee severance, benefits, payroll taxes, asset impairments and other associated costs. The following table presents the total restructuring charges by function for the period indicated:

| Three Months Ended September 30, 2025 |  | Nine Months Ended September 30, 2025
(in thousands) | Severance and related benefit costs |  | Other Costs |  | Total |  | Severance and related benefit costs |  | Other Costs |  | Total
Research and development | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (47) |  |  | $ | 111 |  |  | $ | 64 |
Sales and marketing | — |  |  | — |  |  | — |  |  | (83) |  |  | — |  |  | (83) |
General and administrative | — |  |  | — |  |  | — |  |  | (31) |  |  | 16 |  |  | (15) |
Total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (161) |  |  | $ | 127 |  |  | $ | (34) |

As of September 30, 2025, the Company had no remaining restructuring liability. The following table summarizes the restructuring-related liabilities:

(in thousands) | Severance and related benefit costs |  | Other Costs |  | Total
Amount recorded in accrued liabilities as of December 31, 2024 | $ | 806 |  |  | $ | 222 |  |  | $ | 1,028 |
Restructuring charges (adjustments), net | (161) |  |  | 127 |  |  | (34) |
Cash payments made | (645) |  |  | (349) |  |  | (994) |
Amount recorded in accrued liabilities as of September 30, 2025 | $ | — |  |  | $ | — |  |  | $ | — |

NOTE 11. NET LOSS PER SHARE
Prior to the completion of the Spin-Off from Illumina, the Company had no common shares issued and outstanding. In connection with the Spin-Off, on June 24, 2024, there were 31.0 million shares of GRAIL common stock distributed to Illumina stockholders. This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Spin-Off.
The following table presents the calculation of the Company’s basic and diluted net loss per share to common stockholders:

| Three Months Ended |  | Nine Months Ended
(in thousands, except share and per share data) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Numerator |  |  |  |  |  |  |
Net loss | $ | (88,977) |  |  | $ | (125,688) |  |  | $ | (309,175) |  |  | $ | (1,929,939) |
Denominator |  |  |  |  |  |  |
Weighted average shares of common stock—basic and diluted | 36,124,256 |  | 31,880,054 |  | 35,415,266 |  | 31,326,117
Net loss per share to common stockholders |  |  |  |  |  |  |
Basic | $ | (2.46) |  |  | $ | (3.94) |  |  | $ | (8.73) |  |  | $ | (61.61) |
Diluted | $ | (2.46) |  |  | $ | (3.94) |  |  | $ | (8.73) |  |  | $ | (61.61) |

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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented as they had an anti-dilutive effect:

| Three and Nine Months Ended
| September 30, 2025 |  | September 30, 2024
Unvested restricted stock units | 5,077,509 |  | 4,146,221
Employee stock purchase plan | 139,692 |  | —
Shares subject to options to purchase common stock | 104,315 |  | 104,315
Total | 5,321,516 |  | 4,250,536

NOTE 12. TAXES
For interim financial statement purposes, U.S. GAAP provision (benefit) for taxes related to ordinary income is determined by applying an estimated annual effective income tax rate against a company’s ordinary income, subject to certain limitations on the benefit of losses. Provision (benefit) for taxes related to items not characterized as ordinary income is recognized as a discrete item when incurred. The estimation of the Company’s income tax provision requires the use of management forecasts and other estimates, application of statutory income tax rates, and an evaluation of valuation allowances. The Company’s estimated annual effective income tax rate may be revised, if necessary, in each interim period.
The worldwide effective income tax rate for the nine months ended September 30, 2025 and September 30, 2024 was 26.03% and 5.45%, respectively. The increase for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 primarily relates to the Company’s 2024 valuation allowance impacts against pre-tax losses prior to the Spin-off.
The effective tax rate was higher than the 21% U.S. federal statutory rate for the nine months ended September 30, 2025, primarily due to state taxes, offset by discrete tax benefits from stock-based compensation.
The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Interest and penalties related to unrecognized tax benefits are included within income tax expense. For the three months ended September 30, 2025, the Company recorded income tax expense related to its Federal and California research and development credits of $0.5 million and $0.3 million, respectively.
The Company files income tax returns in the U.S. federal jurisdiction and various states. As of the date of this filing, the Company is not currently under examination by income tax authorities in federal, state, or other jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.
As discussed in Note 1 — Organization And Description Of Business, prior to the Spin-Off, for tax purposes, the Company operated as a subsidiary of Illumina and not as a separately regarded taxable entity. Accordingly, the effective worldwide income tax rate for the period prior to the Spin-Off was calculated using the separate return method as if the Company filed income tax returns on both a standalone basis and on a carve-out basis.
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GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 13. SEGMENT INFORMATION
The Company operates and manages its business as one reportable operating segment which provides multi-cancer early detection testing and services. The Company's chief operating decision maker (“CODM”) is the chief executive officer. The chief operating decision maker reviews financial information on an aggregate basis for the purposes of evaluating financial performance and allocating resources based on net income (loss), adjusted gross margin and adjusted EBITDA. Net income (loss) is the measure of segment profit most consistent with U.S. GAAP that is regularly reviewed by the CODM to allocate resources and assess performance. The CODM does not evaluate operating segment performance using asset information.
The following table is representative of the significant expense categories regularly provided to the CODM when managing the Company’s single reporting segment. A reconciliation to the consolidated net loss for the three and nine months ended September 30, 2025 and September 30, 2024 is included in the table below:

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Revenue: |  |  |  |  |  |  |
Screening revenue | $ | 32,807 |  |  | $ | 25,374 |  |  | $ | 96,319 |  |  | $ | 77,076 |
Development services revenue | 3,387 |  |  | 3,278 |  |  | 7,256 |  |  | 10,267 |
Total revenue | 36,194 |  |  | 28,652 |  |  | 103,575 |  |  | 87,343 |
Costs and operating expenses: |  |  |  |  |  |  |
Cost of screening revenue (exclusive of amortization of intangible assets) (1)(2) | 15,910 |  |  | 15,970 |  |  | 52,379 |  |  | 45,481 |
Cost of development services revenue (1)(2) | 544 |  |  | 1,442 |  |  | 2,216 |  |  | 3,499 |
Compensation | 53,375 |  |  | 84,733 |  |  | 173,537 |  |  | 257,578 |
Depreciation and intangible assets amortization expense | 37,646 |  |  | 38,630 |  |  | 112,577 |  |  | 114,808 |
Stock-based compensation | 13,868 |  |  | 16,871 |  |  | 43,068 |  |  | 70,980 |
Professional services | 8,831 |  |  | 11,298 |  |  | 27,353 |  |  | 52,459 |
Cloud computing and information technology | 6,416 |  |  | 7,517 |  |  | 19,537 |  |  | 23,619 |
Clinical studies | 7,835 |  |  | 8,048 |  |  | 20,020 |  |  | 39,280 |
Laboratory supplies and research collaborations | 3,242 |  |  | 8,556 |  |  | 10,421 |  |  | 37,631 |
Facilities | 5,517 |  |  | 6,185 |  |  | 16,510 |  |  | 21,344 |
Other segment expenses (3) | 8,301 |  |  | 12,909 |  |  | 35,709 |  |  | 51,948 |
Goodwill and intangible assets impairment | — |  |  | — |  |  | 28,000 |  |  | 1,420,936 |
Total costs and operating expenses | 161,485 |  |  | 212,159 |  |  | 541,327 |  |  | 2,139,563 |
Loss from Operations | (125,291) |  |  | (183,507) |  |  | (437,752) |  |  | (2,052,220) |
Other income (expense): |  |  |  |  |  |  |
Interest income | 6,107 |  |  | 11,661 |  |  | 20,695 |  |  | 17,367 |
Other income (expense), net | 466 |  |  | (561) |  |  | (929) |  |  | (514) |
Benefit from income taxes | 29,741 |  |  | 46,719 |  |  | 108,811 |  |  | 105,428 |
Net Loss | $ | (88,977) |  |  | $ | (125,688) |  |  | $ | (309,175) |  |  | $ | (1,929,939) |

(1) Cost of screening revenue (exclusive of amortization of intangible assets) and cost of development services revenue include stock-based compensation expense. See Note 8 — Stock-Based Compensation for further details.
(2) Cost of screening revenue (exclusive of amortization of intangible assets) and cost of development services revenue include $1.3 million and $4.9 million of depreciation expense for the three and nine months ended September 30, 2025 and $0.6 million and $3.8 million for the three and nine months ended September 30, 2024.
(3) Other segment expenses primarily includes costs related to contractors and temporary labor, marketing expenses, legal expenses, and credit loss expense.
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Table of Contents
GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 14. RELATED PARTY TRANSACTIONS
Illumina Purchases and Sales
The Company was a subsidiary of Illumina, Inc. between August 19, 2021 to June 23, 2024. Subsequent to the Spin-Off, Illumina retained a 14.5% stake in the Company. As of September 30, 2025, Illumina held 4,502,126 shares of common stock representing a 12.5% stake in the Company. Illumina is both a customer of the Company and a major supplier of the Company’s reagents and capital equipment. Goods and services transactions with Illumina are invoiced and paid when due.
Goods and services transactions with Illumina have been reflected in the unaudited condensed consolidated financial statements as follows:

(in thousands) | September 30, 2025 |  | December 31, 2024
Accounts receivable | $ | 34 |  |  | $ | 65 |
Supplies | 975 |  |  | 3,130 |
Prepaid expenses and other current assets | 62 |  |  | 77 |
Property and equipment, net | 1,636 |  |  | 2,227 |
Accounts payable | 54 |  |  | — |
Accrued liabilities | 94 |  |  | 104 |

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Screening revenue | $ | 50 |  |  | $ | 129 |  |  | $ | 179 |  |  | $ | 366 |
Cost of screening revenue | 1,237 |  |  | 3,658 |  |  | 3,924 |  |  | 9,784 |
Cost of development services revenue | 78 |  |  | 143 |  |  | 260 |  |  | 259 |
Operating expenses—Research and development | 973 |  |  | 6,588 |  |  | 2,947 |  |  | 16,700 |
Operating expenses—General and administrative | — |  |  | 1 |  |  | — |  |  | 104 |

In June 2024, the Company entered into an amendment to its Supply and Commercialization Agreement with Illumina. Under the terms of the amended agreement, regardless of whether its products incorporate any Illumina technology, the Company has agreed to pay to Illumina a high single-digit royalty, subject to certain reductions, in perpetuity on net sales generated by its products or revenues otherwise generated or received by the Company, subject to certain exceptions, in the field of oncology. Per the terms of the Separation and Distribution Agreement with Illumina, the royalty arrangement is suspended until the earlier of December 24, 2026 or any earlier change of control of the Company, at which time a high-single digit royalty payments will be payable.
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Table of Contents
GRAIL, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Contributions from Member, Net
The following related party transactions between the Company and Illumina have been included in these unaudited condensed consolidated financial statements. As there was no intercompany loan agreement between Illumina and GRAIL and because these transactions had no history of being settled and were not settled per the terms of the Separation and Distribution Agreement, the total net effect of these transactions are reflected in the condensed consolidated statements of cash flows as cash provided by financing activities and in the condensed consolidated balance sheets as contributions from member, net, in member’s equity. The following table presents the components of the net transfers to and from Illumina prior to the Spin-Off:

| Nine Months Ended
(in thousands) | September 30, 2024
Cash funding received from Illumina | $ | 1,244,300 |
Total contributions from member, net | $ | 1,244,300 |

NOTE 15. SUBSEQUENT EVENTS
On October 16, 2025, the Company entered into a stock purchase agreement (the “Samsung Stock Purchase Agreement”), by and among the Company, Samsung C&T Corporation (“Samsung C&T”), Samsung Electronics Singapore Pte. Ltd. (together with Samsung C&T, the “Samsung Investors”) and Samsung Electronics Co., Ltd. (“Samsung Electronics”), providing for the issuance and sale by the Company to the Samsung Investors in a private placement of an aggregate of 1,570,308 shares of GRAIL’s common stock, at a purchase price of $70.05 per share, upon the terms and conditions set forth in the Samsung Stock Purchase Agreement, including closing conditions, for aggregate gross proceeds of approximately $110.0 million (the “Samsung Investment”).
The closing of the Samsung Investment is subject to the satisfaction of certain conditions including, but not limited to, obtaining regulatory approvals and the execution of strategic collaboration agreements by January 31, 2026. See Item 1A. “Risk Factors” for more details. The Company intends to use the net proceeds from the Samsung Investment to fund its commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes. The Company is subject to a number of obligations described in the Samsung Stock Purchase Agreement. The Samsung Stock Purchase Agreement contains customary representations, warranties and agreements by the Company, indemnification obligations of the Company and the Samsung Investors for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), and other obligations of the parties.
On October 21, 2025, the Company, pursuant to a securities purchase agreement (the “Private Placement Purchase Agreement”) with the purchasers named therein, (each an “Investor”), completed the sale and issuance in a private placement of an aggregate of 2,640,970 shares of GRAIL’s common stock, or, for certain investors in lieu of GRAIL’s common stock, an aggregate 1,998,573 prefunded warrants to purchase shares of GRAIL’s common stock, with an exercise price of $0.001 per share (the “Pre-Funded Warrants”), at a price of $70.05 per share (or per Pre-Funded Warrants in lieu thereof, less the nominal exercise price of $0.001 per share) for aggregate gross proceeds of approximately $325.0 million, before deducting private placement expenses. The Company intends to use the net proceeds from the Private Placement to fund its commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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 5, 2025) for the year ended December 31, 2024 (“the 2024 Form 10-K”) and the section entitled “Cautionary Statement Concerning Forward-Looking Statements” of this Form 10-Q.
GRAIL, LLC, previously named SDG Ops, LLC, was formed in the state of Delaware as a wholly owned subsidiary of Illumina, Inc. (“Illumina”). SDG Ops, LLC, along with SDG Ops, Inc., a Delaware corporation and wholly owned subsidiary of Illumina, were formed for the purpose of completing a merger transaction between GRAIL, Inc., and Illumina (the “Acquisition”) in order to carry on the business of GRAIL, Inc. and its subsidiaries.
On September 20, 2020, GRAIL, Inc., Illumina and its subsidiaries, SDG Ops, LLC, and SDG Ops, Inc., entered into an agreement and plan of merger (the “Merger Agreement”). On August 18, 2021 (the “Closing Date”), Illumina completed its acquisition of GRAIL, Inc. According to the terms and conditions of the Merger Agreement, SDG Ops, Inc. and GRAIL, Inc. merged, with GRAIL, Inc. surviving and became a wholly owned subsidiary of Illumina (the “First Merger”). Immediately following the First Merger and as part of the same overall transaction, GRAIL, Inc., as the surviving corporation, merged with SDG Ops, LLC (the “Second Merger”). According to the terms and conditions of the Merger Agreement, SDG Ops, LLC became the surviving company and was renamed GRAIL, LLC.
On June 24, 2024, Illumina completed the spin-off of GRAIL (the “Spin-Off”) through a distribution of approximately 85.5% of our outstanding common stock to the holders of record of Illumina’s common stock as of the close of business on June 13, 2024 (the “Distribution”). As a result of this Distribution, GRAIL became an independent public entity.
In 2021, in connection with the Acquisition, the European Commission accepted a request for a referral of the Acquisition for European Union merger review. Although the European Commission’s assertion of jurisdiction was set aside by the Court of Justice of the European Union on September 3, 2024, GRAIL was held separate from Illumina from October 29, 2021 until the completion of the Distribution under binding hold separate commitments implemented pursuant to orders issued by the European Commission.
Unless the context otherwise requires, references to "GRAIL," “we,” “us,” and the "Company" refer to (i) GRAIL, LLC and its consolidated subsidiaries prior to the Spin-Off as a carve-out business of Illumina and (ii) GRAIL, Inc. and its subsidiaries following the Spin-Off.
Overview
Our Business
We are an innovative commercial-stage healthcare company focused on saving lives and shifting the paradigm in early cancer detection. 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 Galleri test is a commercially available screening test for early detection of multiple types of cancer, which we termed multi-cancer early detection (“MCED”). We believe Galleri is clinically validated based on the results of its clinical studies completed to date, including the results of its foundational case-control Circulating Cell-free Genome Atlas (“CCGA”) study and interventional PATHFINDER study in the intended use population, which together enrolled more than 21,000 participants. In these studies, Galleri demonstrated an ability to detect a shared cancer signal across more than 50 types of cancer, accurately predict the specific organ or tissue type where the cancer signal originated, and yield high positive predictive values (“PPV”) and low false positive rates, all from a simple blood draw. As announced in May 2025, data from the prevalent screening round of the NHS-Galleri Trial demonstrated
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consistent performance as compared to PATHFINDER in c ancer signal of origin (“CSO”) accuracy and specificity, and substantially higher PPV. In October 2025, performance and safety results from the first approximately 25,000 participants of our PATHFINDER 2 study were presented at the European Society of Medical Oncology (“ESMO”) Congress 2025, which showed a PPV of 61.6%, specificity of 99.6% and CSO accuracy of 92%. In addition, the data demonstrated that adding Galleri to recommended screenings for breast, cervical, colorectal, and lung cancers (USPSTF grade A and B recommendations) led to a more than seven-fold increase in the number of cancers found within a year, and an approximately three-fold increase when added to standard-of-care screening for breast, cervical, colorectal, lung, and prostate cancers (USPSTF grade A, B, and C recommendations).
Galleri results can help guide next steps for diagnosis of cancer by healthcare providers in required follow-up diagnostic testing. The high CSO accuracy demonstrated in our PATHFINDER 2 study led to efficient diagnostic workups. Diagnostic resolution took a median of 46 days, and only 0.6% of all participants had an invasive procedure (159/25,114). Invasive procedures were two times more common in participants with cancer than in those without.
We launched Galleri in the United States in mid-2021. We have sold approximately 420,000 commercial Galleri tests through September 30, 2025, including more than 128,000 in the first nine months of 2025, which have detected some of the most aggressive cancers in early stages including, among others, endometrial, esophageal, gastric, head and neck, liver, pancreatic, and rectal cancers.
Since our inception, we have incurred net losses each year. We incurred net losses of $89.0 million and $125.7 million for the three months ended September 30, 2025 and September 30, 2024, respectively and $309.2 million and $1.9 billion for the nine months ended September 30, 2025 and September 30, 2024, respectively (see “Basis of Presentation” below for a description of applicable fiscal periods). Adjusted EBITDA was $(71.7) million and $(108.2) million for the three months ended September 30, 2025 and September 30, 2024, respectively and $(248.8) million and $(399.5) million for the nine months ended September 30, 2025 and September 30, 2024, respectively. Adjusted EBITDA is a n on-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. Substantially all of our net losses resulted from the application of pushdown accounting, including goodwill and intangible assets impairments, amortization of intangible assets, as well as our research and development programs, general and administrative (“G&A”) costs associated with our operations and sales and marketing costs associated with commercializing our products. Additionally, due to the application of pushdown accounting, our balance sheet includes intangible assets recognized by Illumina in connection with their acquisition of us that may be subject to additional impairment over time. 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 commercialization of existing products.
Strategic Collaboration with Samsung and $110 million Equity Investment
In October 2025, we announced a strategic collaboration with Samsung C&T Corporation (“Samsung C&T”), Samsung Electronics Singapore Pte. Ltd. (together with Samsung C&T, the “Samsung Investors”) and Samsung Electronics Co., Ltd. (“Samsung Electronics”). As part of this strategic collaboration, we and Samsung C&T intend to work 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, such as supporting longitudinal genomic-lifestyle clinical research and the integration of Samsung Electronics’ health data platform with our technologies and data. The beginning of any strategic collaboration activities with Samsung C&T or Samsung Electronics is subject to negotiation and execution of final agreements.
In connection with this strategic collaboration, we entered into a stock purchase agreement (the “Samsung Stock Purchase Agreement”), with the Samsung Investors and Samsung Electronics, providing for the issuance and sale by us to the Samsung Investors in a private placement of 1,570,308 shares of our common stock, at a purchase price of $70.05 per share, upon the terms and conditions set forth in the Samsung Stock Purchase Agreement, for aggregate gross proceeds of approximately $110.0 million (the “Samsung Investment”).
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The closing of the Samsung Investment is subject to the satisfaction of certain conditions including, but not limited to (i) the satisfaction of certain regulatory approvals or clearances, including with respect to the Committee on Foreign Investment in the United States (“CFIUS”); (ii) the execution of a business collaboration agreement by the Company and Samsung C&T by January 31, 2026 relating to, among other things, Samsung C&T’s exclusive right to commercialize the Company’s Galleri test, and obligation not to commercialize any other multi-cancer early detection test, in Korea, the funding of such commercialization by Samsung C&T, and a right of first negotiation for commercial rights to Japan and Singapore (iii) the execution of a strategic and operational collaboration agreement, in the form attached to the Stock Purchase Agreement, by the Company and Samsung Electronics by January 31, 2026, and (iv) certain other customary closing conditions. We are subject to a number of obligations described in the Samsung Stock Purchase Agreement. See Item 1A. “Risk Factors”.
We intend to use the net proceeds from the Samsung Investment to fund our commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes.
$325 million Private Placement Financing
On October 21, 2025 (the “Closing Date”), we, pursuant to a securities purchase agreement (the “Private Placement Purchase Agreement”) with the purchasers named therein (each an “Investor”), completed the sale and issuance in a private placement of an aggregate of 2,640,970 shares of our common stock, or, for certain investors in lieu of our common stock, an aggregate of 1,998,573 prefunded warrants to purchase shares of our common stock, with an exercise price of $0.001 per share (the “Pre-Funded Warrants”), at a price of $70.05 per Share (or per Pre-Funded Warrants in lieu thereof, less the nominal exercise price of $0.001 per share) (the “Private Placement”) for aggregate gross proceeds of approximately $325.0 million, before deducting private placement expenses. We intend to use the net proceeds from the Private Placement to fund our commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes.
The Pre-Funded Warrants are immediately exercisable until exercised in full, subject to the Beneficial Ownership Limitation (as described below). The Pre-Funded Warrants include cashless exercise rights. Under the terms of the Pre-Funded Warrants, a holder will not be entitled to exercise any portion of any such warrant, if, upon giving effect to such exercise, the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates, any other persons acting as a group together with the holder or any of the holder’s affiliates) would exceed 4.99% or 9.99%, as applicable (unless an Investor shall have elected otherwise), of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such warrant, which percentage may be increased at the holder’s election upon 61 days’ notice to the Company, provided that such percentage may in no event exceed 19.99% (the “Beneficial Ownership Limitation”).
In addition, on October 18, 2025, in connection with the Private Placement Purchase Agreement, we entered into a registration rights agreement (the “Registration Rights Agreement”) with all of the Investors. Pursuant to the Registration Rights Agreement, we agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) within 30 days after the Closing Date, for purposes of registering the resale of the shares of our common stock and the shares of our common stock issuable upon exercise of the Pre-Funded Warrants purchased in the Private Placement. We agreed to use reasonable best efforts to cause such registration statement to be declared effective by the SEC on the earlier of (a) 60 days after the registration statement is filed or (b) 5 business days after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review.
Prevalent Screening Round Results from the NHS-Galleri Trial
In May 2025, we completed a review of Galleri test performance results in the intervention arm from the prevalent screening round of the registrational NHS-Galleri Trial. The prevalent screening round is the first round of blood draws (of the three total blood draw rounds in the trial) with one year of follow up.
Data from the prevalent screening round showed a substantially higher PPV than that observed in the PATHFINDER study and CSO accuracy and specificity that were consistent with that observed in the PATHFINDER study. In the PATHFINDER study, the results of which were previously published in The Lancet,
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Galleri demonstrated a PPV of 43%, CSO accuracy of 88%, and specificity of 99.5%. There were no serious safety concerns in the prevalent screening round of the NHS-Galleri Trial.
The NHS-Galleri Trial is a fully enrolled prospective randomized controlled clinical utility trial of over 140,000 participants between the ages of 50 and 77 at the time of enrollment, to evaluate the implementation of Galleri alongside the existing NHS standard of care screenings. The primary endpoint of the NHS-Galleri Trial is to evaluate Galleri’s ability to move forward the stage of cancer diagnosis relative to standard of care. An analysis of data from the NHS-Galleri Trial will be conducted sequentially across three pre-specified cancer groupings. First, we will assess whether such data demonstrates a statistically significant reduction in stage III and IV cancer in a pre-specified group of 12 cancer types that together represent approximately two-thirds of cancer deaths in the UK and US. If a statistically significant reduction is found, the primary objective of the NHS-Galleri Trial will be met. A subsequent analysis will assess whether the data demonstrates a significant reduction in all routinely staged cancer types other than prostate cancer. If the second evaluation also shows a significant reduction, then all stageable cancers, including prostate, will be analyzed. This stepwise approach concentrates first on cancers where there are the greatest unmet needs and where earlier detection could have the greatest potential impact on outcomes. Secondary endpoints include collecting outcomes reported by participants with a cancer signal detected test over several time points, including an assessment of participants’ anxiety, satisfaction with Galleri, and attitudes regarding standard of care screening. The NHS-Galleri Trial is designed to provide for three blood draws over a two-year period, with the first draw taken at enrollment, plus 12 months additional follow up after the last blood draw. Cancer screening trials designed to show clinical utility are commonly conducted over three years with an annual screening interval, because data can be influenced by the fact that the first screening round detects many prevalent late-stage asymptomatic cancers that have not yet been diagnosed. This and other factors are likely to cause final results of the three year trial to differ from a review of the first round results.
Although the NHS-Galleri Trial is not designed or statistically powered to detect a reduction in cancer-specific mortality, we believe the trial will provide relevant insights, including through modeled benchmarking against NHS cancer patients and a novel “nested mortality” analysis that focuses on where screening would confer benefit—among test-positive individuals—by retrospectively testing stored samples from control participants who are later diagnosed with cancer. In addition, observed cancer-specific mortality will be reported at three and six years after the final screen.
We plan to submit data from the prevalent screening round of the NHS-Galleri trial, the first 25,000 participants in the PATHFINDER 2 study, and a bridging analysis (comparing and measuring concordance of the version of Galleri used in the PATHFINDER 2 study and the NHS-Galleri Trial with the updated version of the Galleri test that we plan to submit to the FDA for premarket approval) as part of our PMA in the first quarter of 2026. Final clinical utility results from all three years of the trial are expected in mid-2026.
Results from the PATHFINDER 2 Registrational Study
PATHFINDER 2 is a prospective, multi-center, interventional study evaluating the safety and performance of Galleri in a population of individuals aged 50 years and older who are eligible for guideline-recommended cancer screening in the United States. PATHFINDER 2 was initiated in 2021 and includes 35,878 adults in the United States and Canada aged 50 years and older with no clinical suspicion of cancer. In June 2025, we announced positive top-line performance and safety results from a pre-specified analysis of the first 25,578 participants in the registrational study.
In October 2025, performance and safety results from the first approximately 25,000 participants of our PATHFINDER 2 study were presented at the European Society of Medical Oncology (“ESMO”) Congress 2025. Data from the analyzable performance cohort of 23,161 participants with 12 months of follow-up demonstrated that adding Galleri to recommended screenings for breast, cervical, colorectal, and lung cancers (USPSTF grade A and B recommendations) led to a more than seven-fold increase in the number of cancers found within a year, and an approximately three times as many cancers when added to standard-of-care screening for breast, cervical, colorectal, lung, and prostate cancers (USPSTF A, B, and C recommendations). Approximately three-quarters of the cancers detected by Galleri do not have standard of care screening options. Approximately 0.9% of participants received a cancer signal detected result. Additionally, among participants who received a cancer signal detected from Galleri and had a confirmed new cancer diagnosis (true positive), more than half (53.5%) of the new cancers detected were stage I or II and more than two-thirds (69.3%) were stage I, II or III.
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Data demonstrated a PPV of 61.6%, specificity of 99.6%, resulting in a false positive rate of 0.4%, and CSO accuracy of 92%. The high CSO accuracy led to efficient diagnostic workups, with a median time to diagnostic resolution of 46 days following test results, and only 0.6% of all participants had an invasive procedure, with invasive procedures two times more common in participants with cancer than in those without. Data also demonstrated episode sensitivity, or the ability to detect cancer that could be confirmed within 12 months after the blood draw, was 73.7% for the 12 cancer types that together represent approximately two-thirds of cancer deaths and 40.4% for all cancer types. No serious, study-related adverse events were reported during the diagnostic workup.
We plan to submit the data from the first approximately 25,000 participants in the PATHFINDER 2 study, the prevalent screening round of the NHS-Galleri Trial, and a bridging analysis (comparing and measuring concordance of the version of Galleri used in the PATHFINDER 2 study and the NHS-Galleri Trial with the updated version of the Galleri test that we plan to submit to the FDA for premarket approval) as part of our PMA in the first quarter of 2026.
In 2021, we published modeling data in Cancer Epidemiology, Biomarkers & Prevention (Cancer Epidemiol Biomarkers Prev. 2021; 30:460-8) that estimated the potential impact of MCED testing on mortality reduction based on test performance in our CCGA-2 study and using 2006 to 2015 data from the Surveillance, Epidemiology, and End Results Program of the U.S. National Cancer Institute (“SEER”) for ages 50-79. In applying the results from our PATHFINDER 2 and CCGA-3 studies to this modeling data, we estimate that in a population of approximately 107 million individuals between the ages of 50-79 in the United States, adding Galleri to recommended screenings for breast, cervical, colorectal, and lung cancers (USPSTF A and B recommendations) could result in the detection of an additional approximately 480,000 cancer cases. The updated model shows that the use of Galleri together with standard of care screenings could lead to the detection of three times as many cancer cases overall as compared to standard of care screenings alone, with only approximately 4.6% more incremental false positives. We estimate that identification of many more cancer cases with a limited number of additional false positives would reduce the cost to diagnose one cancer by approximately 65%.
Results from SYMPLIFY Extended Registry Data
In October 2025, we and the University of Oxford announced that positive long-term results from an extended registry follow-up of the SYMPLIFY study were presented at the Early Detection of Cancer Conference (“EDCC”). SYMPLIFY is a prospective multi-center observational study and represents the first large-scale evaluation of an MCED test in symptomatic patients who were referred from the primary care setting due to clinical suspicion of cancer. This patient population represents a distinct patient population from the asymptomatic screening population assessed in the PATHFINDER and PATHFINDER 2 studies and the NHS-Galleri Trial. This study was initiated in July 2021 and completed enrollment in November 2021. The study enrolled 6,238 patients, aged 18 years and older, in England and Wales who were referred for urgent imaging, endoscopy or other diagnostic modalities to investigate symptoms suspicious for possible cancer. Of the total enrolled patients, there were 5,461 evaluable patients who achieved diagnostic resolution. The Company’s test was performed in batches, blinded to clinical outcome, and the test’s cancer signal detected and cancer signal origin prediction results were compared with the diagnosis obtained by standard of care pathways to assess test performance.
The primary analysis of the SYMPLIFY study, previously published in The Lancet Oncology, supported the feasibility of using the Galleri test to assist clinicians with decisions regarding referral from primary care. In that analysis, which followed participants until diagnostic resolution or up to nine months, Galleri demonstrated a PPV of 75.5% and CSO accuracy of 84.8%. Patients reported to have a false positive Galleri result were followed for 24 months in national cancer registries for England and Wales. The updated analysis presented at EDCC showed that 35.4% (28 of 79) of participants initially believed to have a false positive Galleri result were later diagnosed with cancer during the 24 month follow up period. This reduction in false positives to 51 from 79 resulted in an increase of PPV in this symptomatic population to 84.2% from 75.5%, and 27 of these 28 participants had a correct CSO prediction. These updated results demonstrate the importance of continued follow-up after a cancer signal is detected.
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Real World Evidence Results
In April 2025, we presented results from more than 100,000 patients at the American Association for Cancer Research Annual Meeting collected in a real-world setting from over 9,000 healthcare providers across the U.S. who ordered Galleri tests and had results returned to their patients. Clinical cancer outcomes were voluntarily provided by ordering providers to GRAIL. In this population, 1,011 patients received a positive Galleri test result. Of those, 459 patients had follow up information reported to us by their provider. 411 of those patients had a completed diagnostic workup, 259 of whom had received their Galleri test for asymptomatic screening. Test performance in these 259 patients was consistent with that observed in our prior clinical studies for asymptomatic screening, with a PPV of the Galleri test of 49% and CSO accuracy of 87%. Because of differences in sample size, age distributions, the limitations of collecting data in a real-world setting through voluntary reporting, the importance of work ups and other factors, these results are not directly comparable to the results of our clinical studies, such as our PATHFINDER or PATHFINDER 2 studies or the prevalent screening round or full trial results of our NHS-Galleri Trial.
Separation from Illumina
On June 24, 2024, Illumina completed the previously announced spin-off of GRAIL (the “Spin-Off”). The Spin-Off was completed through a distribution of approximately 85.5% of our outstanding common stock to the holders of record of Illumina’s common stock as of the close of business on June 13, 2024 (the “Distribution”), which resulted in the issuance of 31,049,148 shares of common stock. As a result of this Distribution, GRAIL became an independent public entity. GRAIL’s common stock is listed under the ticker symbol “GRAL” on the Nasdaq Stock Exchange.
We entered into or adopted agreements that provide a framework for the relationship between us and Illumina in connection with the Spin-Off. See Note 1 — Organization And Description Of Business for details. In connection with the Spin-Off, certain equity and liability classified awards were converted in accordance with the Employee Matters Agreement. As a result of the separation, our member’s equity balance was reclassified to additional paid-in capital.
On June 21, 2024, in connection with the Spin-Off, we received a cash contribution of $932.3 million from Illumina. In connection with the Spin-Off, we incurred $22.2 million of legal and professional fees in the nine month period ended September 30, 2024 related to the 2021 acquisition of GRAIL by Illumina, and corresponding antitrust litigation, including compliance with the hold separate arrangements imposed by the European Commission, and divestiture of GRAIL from Illumina through the Spin-Off. See “Non-GAAP Financial Measures — Adjusted EBITDA” for further details. In addition, from 2021 to 2024, we spent $143.8 million on legal and professional service fees related to the antitrust litigation and compliance with the hold separate order and transaction costs related to Illumina’s acquisition of GRAIL and the Spin-Off.
Restructuring Plan
On Augu st 9, 2024, following a portfolio review, our Board of Directors (the “Board”) approved a restructuring plan (“Restructuring Plan”) designed to reprioritize our resources to focus on our core MCED business and reduce overall spend as we progress towards completion of registrational studies and premarket approval application (“PMA”) submission to the U.S. Food and Drug Administration (“FDA”) for Galleri.
As a result, we have taken actions to streamline our commercial sales forces and focus their field-based activities on the current customers expected to be more productive and high priority opportunities. We maintained sales force coverage for the majority of our current Galleri volume and active prescribers. As part of this approach, we also streamlined our current and planned investment in our enterprise business, which included our employer and life insurance businesses. Reductions in the commercial organization included management layers and commercial roles without sales responsibilities. In addition to reductions in the commercial organization, we made reductions in medical affairs teams involved with U.S. Galleri provider engagement.
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We also substantially decreased investment and planned investment in research and development activities related to our product programs beyond Galleri, including our diagnostic aid for cancer (“DAC”) and minimal residual disease programs. In addition, we made reductions in general and administrative expenses to reflect the focus on the MCED opportunity. We plan to continue to invest in our biopharmaceutical partnerships and work with our partners to leverage our proprietary methylation technology in precision oncology applications.
The decision was based on cost-reduction initiatives intended to reduce our ongoing operating expenses and maximize shareholder value.
The Restructuring Plan included a reduction in our existing headcount and planned 2024 hires of approximately 30%, inclusive of 350 then full-time employees, or approximately 25% of the workforce in place as of June 30, 2024.
The Restructuring Plan was substantially completed in the fourth quarter of 2024, and we incurred $18.3 million of total charges through the fourth quarter of 2024, consisting primarily of employee severance, benefits, payroll taxes, and other associated costs. For the three and nine months ended September 30, 2025, we incurred an immaterial amount of restructuring charges.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared on a standalone basis using the consolidated financial statements and accounting records of Illumina prior to the Spin-Off, and the accounting records of GRAIL, Inc. subsequent to the Spin-Off. These unaudited condensed consolidated financial statements reflect our consolidated historical financial position, results of operations and cash flows as historically managed, in accordance with GAAP. The unaudited condensed consolidated financial statements may not be indicative of our future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been, and may not include all expenses that would have been incurred, had GRAIL been operated as an independent, publicly traded company during the periods presented prior to the Spin-Off. Certain situations require management to make estimates based on judgments and assumptions, which may affect the reported amounts of assets and respective disclosures at the date of the financial statements. Management’s judgments and assumptions may also affect the reported amounts of net sales and expenses during the reporting periods. Actual results could differ from these management estimates.
While GRAIL was a subsidiary of Illumina, GRAIL’s fiscal year was the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. The three months ended September 30, 2025 and September 30, 2024, respectively, were both 13 weeks. Upon the closing of the Spin-Off, GRAIL adopted a fiscal year end of December 31.
Illumina’s acquisition of GRAIL on August 18, 2021 represented a change of control with respect to GRAIL. Given GRAIL, Inc. merged with SDG Ops, Inc., which then merged with SDG Ops LLC, authoritative guidance (ASC 805-50-30) required pushdown accounting to be applied for the Second Merger amongst entities under common control. As a result of the application of pushdown accounting, the separately issued financial statements of GRAIL reflect Illumina’s basis in the assets and liabilities of GRAIL which were remeasured to fair value as of the Closing Date. Intangible assets included developed technology, in-process research and development, and trade names, as well as goodwill.
We have incurred and expect to incur additional costs as a separate public company, and particularly as we transition to a large accelerated filer as of December 31, 2026 and are subject to enhanced reporting and internal control requirements under the Sarbanes-Oxley Act of 2002. These additional costs are primarily related to certain supporting functions that may differ from and be higher than the costs historically incurred or allocated to us.
The additional costs we expect to incur as a separate public company are summarized as follows:
•Accounting and audit related costs, professional services, and new systems and software to support the accounting, financial reporting, and audits as a standalone public company;
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•Professional service costs, for additional support to enhance our capabilities in areas such as investor relations, accounting, financial reporting, treasury, risk management, and equity administration, among others; and
•Corporate governance costs, including but not limited to board of directors compensation and expenses, insurance, legal and other professional services fees, annual report and proxy statement costs, SEC filing fees, transfer agent fees, and stock exchange listing fees.
In addition, we have entered into a supply and commercialization agreement with Illumina. Under the terms of the agreement, regardless of whether our products incorporate any Illumina technology, we have agreed to pay to Illumina a high single-digit royalty, subject to certain reductions, in perpetuity on net sales generated by our products or revenues otherwise generated or received by us, subject to certain exceptions, in the field of oncology. Per the terms of the Separation and Distribution Agreement with Illumina, the royalty arrangement is suspended until the earlier of December 24, 2026 or any earlier GRAIL Change of Control (as defined in that agreement), at which time the high single-digit royalty will become payable.
Certain factors could impact the nature and amount of these separate public company costs, including the finalization of our staffing and infrastructure needs.
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 private 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 plan to pursue FDA approval to help support broad access for Galleri in the United States. We plan to complete a PMA submission with the FDA in the first quarter of 2026. The timing of this submission is subject to various risks and other factors, including the finalization of our clinical evidence package, including our bridging analyses, and our ongoing discussions with the FDA. Obtaining PMA approval can take several years from the time an application is submitted, if at all. Moreover, the FDA requirements that will govern MCED tests, as well as the breadth and nature of data we must provide the FDA to support the proposed intended use, may be subject to change, and as such it is difficult to predict what information we will need to submit to obtain approval of a PMA from the FDA for a proposed intended use or at all. Moreover, the regulatory requirements surrounding the pathway to PMA for LDTs may be subject to change, including through a recent court decision that has successfully challenged the FDA’s authority to implement medical device requirements with respect to LDTs. We continue to interact with the FDA regarding the data we must provide the FDA to support our PMA submission for the proposed intended use. We believe that FDA approval, if obtained, could unlock coverage from large commercial payors in the United States and we are supporting proposed legislation in the United States to enable coverage of FDA-approved MCED tests by Medicare. If we obtain FDA approval, we expect to pursue inclusion of Galleri in the USPSTF’s guideline recommendation, although such inclusion is not certain even with FDA approval. We believe such inclusion would further increase adoption and market acceptance of our tests. Over time, to the extent Galleri becomes more accessible in the United States, we may opt to reduce pricing in order to access a broader population base and accelerate adoption. In the United Kingdom, we are working with NHS England (the “NHS”) to complete our NHS-Galleri Trial. The NHS will evaluate the final results from the NHS-Galleri Trial, which are expected to be available in mid-2026, before determining whether to implement the Galleri test in the NHS. 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 believe our work with the NHS and data
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generated from our NHS-Galleri Trial, if favorable, could help facilitate adoption in other single-payor systems around the world and support evidence of clinical utility worldwide.
•International expansion. A component of our long-term growth strategy is to expand our commercial reach internationally. We have expanded our research internationally into the United Kingdom through our partnership with NHS England in the NHS-Galleri Trial, and we expect to launch Galleri in the United Kingdom, subject to the results of our NHS-Galleri Trial. We continue to evaluate international expansion opportunities and we have begun expansion in select additional geographies through distributors, including most recently through our proposed strategic collaboration with Samsung C&T in Korea. We expect to continue selectively engaging with international opportunities over time.
•Continued development of, and competition within, the market for MCED testing. Multi-cancer early detection is a relatively 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 have launched co mmercially 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 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, digital health platforms, health systems, employers, payors, 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 September 30, 2025, we have entered into commercial partnerships, including with leading digital health platforms, healthcare systems, employers, payors, and life insurance providers, and have established a network of over 16,000 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 across channels that vary based on the size and type of account that is offering the test. F or certain customers, we also offer rebates or discounts. 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. We also expect to increase demand from new customers through our efforts to further develop the market for MCED testing.
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•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: CCGA, NHS-Galleri, PATHFINDER, PATHFINDER 2, 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 our research and development expenses to decrease over the next three years as, in conjunction with our portfolio review, we determined to decrease investment in product programs beyond Galleri. Additionally, some of our large clinical trials are moving into the data follow-up phase, an updated commercial version of our Galleri test incorporating an automated platform was deployed in 2024 and we expect that we have substantially completed development of the Galleri test version that we will submit with our PMA. We will continue to prioritize key objectives for Galleri, including finalization of our clinical evidence package and submission of our PMA application.
•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 commercial version of Galleri in commercial channels. This version incorporates an industrial scale platform with significant automation 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.
While each of these areas presents significant opportunities for us, they also pose significant risks and challenges that we must address. See the “Risk Factors” section of our 2024 Form 10-K and Item 1A. “Risk Factors” of this Form 10-Q, alongside other information set forth in this Form 10-Q and in other documents that we file with the SEC, for more information. 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 period, 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.
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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, payors, and life insurance providers. Galleri is not currently broadly reimbursed. Galleri test pricing is generally based on our list price, with discounts across channels that vary based on the size and type of account that is offering the test. F or certain customers, we also offer rebates or discounts. 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.
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 DAC 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, 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.
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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 developm ent 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 expect our research and development expenses to decrease over the next three years as, in conjunction with our portfolio review, we determined to decrease investment in product programs beyond Galleri. Additionally, some of our large clinical studies and development of our automated platform are expected to substantially conclude in this period.
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. The cost of identifiable intangible assets with finite lives, such as trade names, are amortized on a straight-line basis over the assets’ respective estimated useful lives of 9 years. We expect our sales and marketing expense s to remain flat-to-increasing and continue to decrease as a percentage of revenue over the next three years and long term.
General and Administrative
G&A 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, medical affairs and management information systems personnel. Also included are professional fees, legal costs, including patent and trademark-related expenses and educational activities. The related party amount in the prior year period represents allocated stock administration expenses from Illumina. W e 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 remain flat-to-increasing and continue to decrease as a percentage of revenue over the next three years and long term.
Goodwill and Intangible Assets Impairments
Upon the Acquisition, excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, was recognized by Illumina as goodwill. As a result of the application of pushdown accounting, the separately issued financial statements of GRAIL reflect the goodwill recorded by Illumina upon the Acquisition.
We evaluate intangible assets for impairment annually or more frequently if an event occurs or circumstances change in the interim that would more likely than not reduce the fair value of the asset below its carrying amount. See Note 4 — Goodwill and Intangible Assets included in this Form 10-Q.
Interest Income
Interest income consists primarily of interest income earned on our cash, cash equivalents, and short-term marketable securities.
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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
Upon closing of the Acquisition, as a wholly owned subsidiary of Illumina, we were no longer subject to U.S. income tax on a standalone basis and U.S. income tax was combined into Illumina’s consolidated income tax return as a subsidiary of Illumina. However, for financial statement purposes, between the closing of the Acquisition and the Spin-Off, we elected to compute our income tax provision, including current and deferred taxes, as if we filed a separate income tax return and were not included in Illumina’s consolidated return for the period GRAIL was owned by Illumina. Including the provision for income taxes in our standalone financials is more representative of our financial position as a standalone company. As such, the income tax provisions and related deferred tax assets and liabilities reflected in our financial statements for the periods prior to the Spin-Off have been estimated as if we were a separate taxpayer.
Under this method, various tax attributes, such as net operating losses and tax credits, are also presented on a separate return basis. For income tax purposes, since prior to the Spin-Off, we were not a separate taxpayer and merely a subsidiary of Illumina, these tax attributes, including net operating losses and tax credits, are the property of Illumina and have either already been utilized by Illumina in its consolidated or combined income tax returns or will be utilized by Illumina in its returns in the future. Accordingly, such tax attributes will not be available to us as a standalone entity on our income tax returns in t he future; therefore, in connection with the Spin-off, we recorded an entry to additional paid in capital in order to remove the tax-effected deferred tax assets, net of any valuation allowance, for the tax attributes that remained the property of Illumina. Beginning in 2024 after the Spin-off, as a standalone entity, GRAIL will file tax returns on its own behalf and its deferred taxes and actual income tax rate may differ from those in historical periods.
As of the Spin-off, the Company is no longer a subsidiary of Illumina and computes its tax provision in accordance with ASC 740 and has computed the income tax provision, including the current and deferred taxes under Grail, Inc., as a publicly traded company.
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Results of Operations
Comparisons of the Three and Nine Months Ended September 30, 2025 and September 30, 2024
The following table summarizes our results of operations for the periods indicated:

| Three Months Ended |  | Nine Months Ended |  |
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024 |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |  |  |
Screening revenue | $ | 32,807 |  |  | $ | 25,374 |  |  | $ | 96,319 |  |  | $ | 77,076 |  |  |  |  |
Development services revenue | 3,387 |  |  | 3,278 |  |  | 7,256 |  |  | 10,267 |  |  |  |  |
Total revenue | 36,194 |  |  | 28,652 |  |  | 103,575 |  |  | 87,343 |  |  |  |  |
Costs and operating expenses: |  |  |  |  |  |  |  |  |  |  |
Cost of screening revenue (exclusive of amortization of intangible assets) | 15,910 |  |  | 15,970 |  |  | 52,379 |  |  | 45,481 |  |  |  |  |
Cost of development services revenue | 544 |  |  | 1,442 |  |  | 2,216 |  |  | 3,499 |  |  |  |  |
Cost of revenue — amortization of intangible assets | 33,473 |  |  | 33,473 |  |  | 100,417 |  |  | 100,417 |  |  |  |  |
Research and development | 48,647 |  |  | 78,231 |  |  | 148,898 |  |  | 274,052 |  |  |  |  |
Sales and marketing | 25,503 |  |  | 35,625 |  |  | 89,021 |  |  | 123,433 |  |  |  |  |
General and administrative | 37,408 |  |  | 47,418 |  |  | 120,396 |  |  | 171,745 |  |  |  |  |
Goodwill and intangible impairment | — |  |  | — |  |  | 28,000 |  |  | 1,420,936 |  |  |  |  |
Total costs and operating expenses | 161,485 |  |  | 212,159 |  |  | 541,327 |  |  | 2,139,563 |  |  |  |  |
Loss from operations | (125,291) |  |  | (183,507) |  |  | (437,752) |  |  | (2,052,220) |  |  |  |  |
Other income: |  |  |  |  |  |  |  |  |  |  |
Interest income | 6,107 |  |  | 11,661 |  |  | 20,695 |  |  | 17,367 |  |  |  |  |
Other income (expense), net | 466 |  |  | (561) |  |  | (929) |  |  | (514) |  |  |  |  |
Total other income, net | 6,573 |  |  | 11,100 |  |  | 19,766 |  |  | 16,853 |  |  |  |  |
Loss before income taxes | (118,718) |  |  | (172,407) |  |  | (417,986) |  |  | (2,035,367) |  |  |  |  |
Benefit from income taxes | 29,741 |  |  | 46,719 |  |  | 108,811 |  |  | 105,428 |  |  |  |  |
Net loss | $ | (88,977) |  |  | $ | (125,688) |  |  | $ | (309,175) |  |  | $ | (1,929,939) |  |  |  |  |

Comparison of the Three Months Ended September 30, 2025 and September 30, 2024
Revenue

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Screening revenue | $ | 32,807 |  |  | $ | 25,374 |  |  | $ | 7,433 |  |  | 29 | %

Screening Revenue
The increase in screening revenue of $7.4 million was primarily attributable to a 39% increase in Galleri sales volume, partially offset by a 7% decrease in ASP. The Galleri sales volume increased in the third quarter of 2025 as a result of the continued ramp in our commercial activity, expansion of our network of ordering providers, additional commercial partnerships and new promotional campaigns.
Cost of Screening Revenue (Exclusive of Amortization of Intangible Assets)

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Cost of screening revenue (exclusive of amortization of intangible assets) | $ | 15,910 |  |  | $ | 15,970 |  |  | $ | (60) |  |  | — | %

The cost of screening revenue (excluding amortization of intangible assets) remained flat, primarily due to an increase in test volume offset by lower variable cost per sample of Galleri testing performed on our automated platform and a clinical validation activity, which resulted in higher fixed costs being allocated to operating expenses.
Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of screening revenue decreased 14%, mainly due to lower costs of Galleri testing performed on our automated platform, partially offset by the 7% decrease in ASP and higher sample reprocessing costs.
Research and Development
Research and development expenses for the three months ended September 30, 2025 and September 30, 2024 were as follows:

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Compensation expenses | $ | 24,437 |  |  | $ | 43,317 |  |  | $ | (18,880) |  |  | (44 | %)
Clinical studies | 7,835 |  |  | 8,048 |  |  | (213) |  |  | (3) | %
Laboratory supplies and research collaboration expenses | 3,242 |  |  | 8,556 |  |  | (5,314) |  |  | (62 | %)
Allocated expenses | 6,050 |  |  | 8,905 |  |  | (2,855) |  |  | (32) | %
Depreciation expenses | 2,498 |  |  | 2,648 |  |  | (150) |  |  | (6 | %)
Other expenses | 4,585 |  |  | 6,757 |  |  | (2,172) |  |  | (32) | %
Total research and development | $ | 48,647 |  |  | $ | 78,231 |  |  | $ | (29,584) |  |  | (38 | %)

The decrease in research and development expenses of $29.6 million was primarily attributable to decreases in compensation expenses, laboratory supplies and research collaboration expenses, allocated expenses, and other expenses.
The decrease of $18.9 million in compensation expenses was primarily related to a decrease of $8.8 million in severance and benefits, a decrease of $8.7 million in salaries and wages, and a decrease of $2.5 million in stock-based compensation primarily due to the reduction in workforce related to the Restructuring Plan, partially offset by an increase of $1.1 million in variable compensation expense primarily due to the one-time benefit recorded in the prior period related to the Restructuring Plan.
The decrease in laboratory supplies and research collaboration expenses of $5.3 million was primarily driven by the substantial completion of the development and validation of our automated platform at the end of 2024 as well as the completion of enrollment in our PATHFINDER 2 study and completion of final study visits in our NHS-Galleri Trial.
The decrease of $2.9 million in allocated expenses was primarily attributable to ongoing cost reduction efforts, which resulted in lower software, IT, and facilities expenses being allocated to the research and development function.
The decrease of $2.2 million in other expenses was primarily driven by a $0.8 million decrease in the use of contractors and temporary labor, a decrease of $0.7 million in cloud computing, and a decrease of $0.6 million in professional services due to cost optimization efforts.
Sales and Marketing

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Sales and marketing | $ | 25,503 |  |  | $ | 35,625 |  |  | $ | (10,122) |  |  | (28 | %)

The decrease in sales and marketing expenses of $10.1 million was primarily attributable to a decrease of $7.6 million in compensation expenses primarily related to a decrease in severance and benefits of $4.8 million and a decrease in salaries and wages of $3.2 million primarily due to the reduction in workforce related to the Restructuring Plan, partially offset by an increase of $0.4 million primarily related to variable compensation expense due to the one-time benefit recorded in the prior period related to the Restructuring Plan. Third-party marketing professional services expenses decreased by $2.2 million due to cost optimization efforts.
General and Administrative

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
General and administrative | $ | 37,408 |  |  | $ | 47,418 |  |  | $ | (10,010) |  |  | (21 | %)

The decrease in general and administrative expenses of $10.0 million was primarily attributable to a decrease of $6.7 million in compensation expenses primarily related to a decrease of $5.6 million in severance and benefits and a decrease of $1.5 million in salaries and wages due to the reduction in workforce related to the Restructuring Plan, partially offset by an increase of $0.9 million in variable compensation due to the one-time benefit recorded in the prior period related to the Restructuring Plan. Legal and professional services expenses decreased by $2.5 million primarily due to lower outside counsel and litigation related spend and consulting fees. Costs associated with the use of contractors and temporary labor decreased by $2.2 million due to cost optimization efforts. Other general and administrative costs increased by $1.4 million primarily due to increases in allocated expenses primarily due to changes in headcount resulting from the reduction in workforce related to the Restructuring Plan.
Interest Income

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Interest income | $ | 6,107 |  |  | $ | 11,661 |  |  | $ | (5,554) |  |  | (48 | %)

The decrease in interest income of $5.6 million was primarily driven by a decrease in interest earned on our money market funds and short-term marketable securities primarily due to decreases in the average balance on hand and a decrease in interest yield.
Other Income (Expense)

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Other income (expense), net | $ | 466 |  |  | $ | (561) |  |  | $ | 1,027 |  |  | (183 | %)

The increase in other income of $1.0 million was primarily a result of the fluctuation of foreign currency exchange rates.
Benefit from Income Taxes

| Three Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Benefit from income taxes | $ | 29,741 |  |  | $ | 46,719 |  |  | $ | (16,978) |  |  | (36 | %)

The decrease in benefit from income taxes of $17.0 million was primarily driven by the decrease in the loss before income taxes for the three months ended September 30, 2025 when compared to the loss before income taxes for the three months ended September 30, 2024.
Comparison of the Nine Months Ended September 30, 2025 and September 30, 2024
Revenue

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Screening revenue | $ | 96,319 |  |  | $ | 77,076 |  |  | $ | 19,243 |  |  | 25 | %
Development services revenue | 7,256 |  |  | 10,267 |  |  | (3,011) |  |  | (29 | %)
Total revenue | $ | 103,575 |  |  | $ | 87,343 |  |  | $ | 16,232 |  |  | 19 | %

Screening Revenue
The increase in screening revenue of $19.2 million was primarily attributable to a 33% increase in Galleri sales volume, partially offset by a 6% decrease in ASP. The Galleri sales volume increased in the first nine months of 2025 as a result of the continued ramp in our commercial activity and partnerships, expansion of our network of ordering providers, and new promotional campaigns.
Development Services Revenue
The decrease in development services revenue of $3.0 million was primarily due to a decrease of $1.9
million in revenue from pilots with biopharmaceutical partners, a decrease of $0.5 million in revenue earned from research services, and a decrease of $0.5 million in other services revenue.
Cost of Screening Revenue (Exclusive of Amortization of Intangible Assets)

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Cost of screening revenue (exclusive of amortization of intangible assets) | $ | 52,379 |  |  | $ | 45,481 |  |  | $ | 6,898 |  |  | 15 | %

The increase in cost of screening revenue (exclusive of amortization of intangible assets) of $6.9 million was primarily due to an increase in test volume.
Cost of screening revenue (exclusive of amortization of intangible assets) as a percent of screening revenue decreased 5% mainly due to the reduction in variable costs of Galleri testing performed on our automated platform, partially offset by a 6% decrease in ASP and higher sample reprocessing costs.
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Cost of Development Services Revenue

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Cost of development services revenue | $ | 2,216 |  |  | $ | 3,499 |  |  | $ | (1,283) |  |  | (37 | %)

The decrease in cost of development services revenue of $1.3 million was primarily attributable to a decrease in other services revenue and development services projects completed during the periods.
Research and Development
Research and development expenses for the nine months ended September 30, 2025 and September 30, 2024 were as follows:

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Compensation expenses | $ | 78,125 |  |  | $ | 138,398 |  |  | $ | (60,273) |  |  | (44 | %)
Clinical studies | 20,020 |  |  | 39,280 |  |  | (19,260) |  |  | (49 | %)
Allocated expenses | 18,737 |  |  | 28,985 |  |  | (10,248) |  |  | (35) | %
Laboratory supplies and research collaboration expenses | 10,421 |  |  | 37,631 |  |  | (27,210) |  |  | (72 | %)
Depreciation expenses | 7,904 |  |  | 8,695 |  |  | (791) |  |  | (9 | %)
Other expenses | 13,691 |  |  | 21,063 |  |  | (7,372) |  |  | (35 | %)
Total research and development | $ | 148,898 |  |  | $ | 274,052 |  |  | $ | (125,154) |  |  | (46 | %)

The decrease in research and development expenses of $125.2 million was primarily attributable to decreases in compensation expenses, laboratory supplies and research collaboration expenses, clinical study expenses, allocated expenses, and other expenses.
The decrease of $60.3 million in compensation expenses was primarily related to a decrease of $34.8 million in salaries and wages, a decrease of $15.8 million in stock-based compensation, a decrease of $8.0 million in severance and benefits, and a decrease of $1.7 million in variable compensation expense primarily due to the reduction in workforce related to the Restructuring Plan.
The decrease in clinical studies of $19.3 million was primarily attributable to a decrease of $22.3 million primarily related to completion of enrollment in our PATHFINDER 2 study and completion of final study visits in our NHS-Galleri Trial, partially offset by an increase of $3.0 million due to enrollment in our REACH/Galleri-Medicare study.
The decrease of $10.2 million in allocated expenses was primarily attributable to ongoing cost reduction efforts, which resulted in lower software, IT, and facilities expenses being allocated to the research and development function, as well as reduced headcount.
The decrease in laboratory supplies and research collaboration expenses of $27.2 million was primarily driven by the substantial completion of the development and validation of our automated platform at the end of 2024 as well as the completion of enrollment in our PATHFINDER 2 study and completion of final study visits in our NHS-Galleri Trial.
The decrease of $7.4 million in other expenses was primarily driven by a decrease of $3.0 million in the use of contractors and temporary labor, a decrease of $2.2 million in professional services, and a decrease of $1.6 million in cloud computing expenses due to cost optimization efforts.
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Sales and Marketing

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Sales and marketing | $ | 89,021 |  |  | $ | 123,433 |  |  | (34,412) |  |  | (28) | %

The decrease in sales and marketing expenses of $34.4 million was primarily attributable to a decrease of $26.5 million in compensation expenses primarily related to a decrease in salaries and wages of $17.2 million, a decrease in severance and benefits of $4.8 million, and a decrease in stock-based compensation of $4.5 million primarily due to the reduction in workforce related to the Restructuring Plan. Third-party marketing professional services expenses decreased by $6.5 million due to cost optimization efforts. Other expenses decreased by $1.4 million primarily driven by decreases in the use of contractors and temporary labor as well as reductions in allocated expenses due to cost optimization efforts.
General and Administrative

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
General and administrative | $ | 120,396 |  |  | $ | 171,745 |  |  | $ | (51,349) |  |  | (30 | %)

The decrease in general and administrative expenses of $51.3 million was primarily attributable to decreases in legal and professional services expenses and compensation related expenses. Legal and professional services expenses decreased by $24.1 million primarily due to no longer incurring legal and professional service fees related to compliance with the European Commission hold separate order and transaction costs related to our Spin-Off, completed on June 24, 2024. Compensation expenses decreased by $23.4 million primarily related to a decrease in salaries and wages of $9.7 million, a decrease in stock-based compensation of $7.6 million, and a decrease in severance and benefits of $6.1 million primarily due to the reduction in workforce related to the Restructuring Plan. Costs associated with the use of contractors and temporary labor decreased by $5.8 million due to cost optimization efforts. Other general and administrative costs increased by $2.0 million primarily due to increases in allocated expenses primarily driven by changes in headcount resulting from the reduction in workforce related to the Restructuring Plan.
Goodwill and Intangible Impairment

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Goodwill and intangible impairment | $ | 28,000 |  |  | $ | 1,420,936 |  |  | $ | (1,392,936) |  |  | (98 | %)

Goodwill and intangible impairment decreased $1.4 billion due to a goodwill impairment charge of $888.9 million resulting from the difference between the carrying value of our reporting unit and its fair value and an IPR&D impairment charge of $532 million resulting from the difference between the Company’s IPR&D carrying value and its estimated fair value, recognized during the second quarter of 2024, partially offset by an IPR&D impairment charge of $28 million resulting from the difference between the Company’s IPR&D carrying value and its estimated fair value recognized during the third quarter of 2025.
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Interest Income

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Interest income | $ | 20,695 |  |  | $ | 17,367 |  |  | $ | 3,328 |  |  | 19 | %

The increase in interest income of $3.3 million was primarily driven by an increase in interest earned on our money market funds and short-term marketable securities primarily due to an increase in the average balance on hand.
Benefit from Income Taxes

| Nine Months Ended |  | Change
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | $ |  | %
Benefit from income taxes | $ | 108,811 |  |  | $ | 105,428 |  |  | $ | 3,383 |  |  | 3 | %

The increase in benefit from income taxes of $3.4 million was primarily driven by the increase in effective tax rate for the nine months ended September 30, 2025 when compared to the effective tax rate for the nine months ended September 30, 2024. The increase in effective tax rate for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 primarily relates to the Company’s 2024 valuation allowance impacts against pre-tax losses prior to the Spin-off.
Non-GAAP Financial Measures
In addition to our results provided throughout this Form 10-Q that are determined in accordance with GAAP, this Form 10-Q also includes the following non-GAAP financial measures for the three and nine months ended September 30, 2025 and September 30, 2024, which information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes included elsewhere in this Form 10-Q:
Adjusted Gross Profit/(Loss)
Adjusted Gross Profit/(Loss) 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 depreciation and amortization, and the impact of our financing methods and income taxes.
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We calculate Adjusted Gross Profit/(Loss) 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/(Loss) 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.

| Three Months Ended |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Gross loss (1) | $ | (13,733) |  |  | $ | (22,233) |  |  | $ | (51,437) |  |  | $ | (62,054) |
Amortization of intangible assets | 33,473 |  |  | 33,473 |  |  | 100,417 |  |  | 100,417 |
Stock-based compensation | 271 |  |  | 578 |  |  | 1,450 |  |  | 1,522 |
Adjusted Gross Profit | $ | 20,011 |  |  | $ | 11,818 |  |  | $ | 50,430 |  |  | $ | 39,885 |

(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.
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 income (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 or income 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.
We calculate Adjusted EBITDA as net income (loss) adjusted to exclude interest (income) expense, income tax expense (benefit), depreciation, impairment of goodwill and intangible assets, and amortization of intangible assets, which represent intangible assets resulting from pushdown accounting, legal and professional services fees related to the Acquisition and corresponding antitrust litigation, including compliance with the hold separate arrangements imposed by the European Commission, and our divestment from Illumina, restructuring charges, and stock-based compensation. We believe that the items subject to these further adjustments are not indicative of our ongoing operations due to their nature, especially considering the impact of certain items as a result of the Acquisition.
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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 |  | Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Net loss | $ | (88,977) |  |  | $ | (125,688) |  |  | $ | (309,175) |  |  | $ | (1,929,939) |
Adjusted to exclude the following: |  |  |  |  |  |  |
Interest income | (6,107) |  |  | (11,661) |  |  | (20,695) |  |  | (17,367) |
Benefit from income tax expense | (29,741) |  |  | (46,719) |  |  | (108,811) |  |  | (105,428) |
Amortization of intangible assets (1) | 34,583 |  |  | 34,583 |  |  | 103,750 |  |  | 103,750 |
Depreciation | 4,399 |  |  | 4,647 |  |  | 13,686 |  |  | 14,865 |
Goodwill and intangible impairment (2) | — |  |  | — |  |  | 28,000 |  |  | 1,420,936 |
Illumina/GRAIL merger & divestiture legal and professional services costs (3) | — |  |  | 226 |  |  | — |  |  | 22,158 |
Stock-based compensation(4) | 14,139 |  |  | 17,449 |  |  | 44,518 |  |  | 72,502 |
Restructuring(5) | — |  |  | 19,007 |  |  | (34) |  |  | 19,007 |
Adjusted EBITDA | $ | (71,704) |  |  | $ | (108,156) |  |  | $ | (248,761) |  |  | $ | (399,516) |

1.Represents amortization of intangible assets, including developed technology and trade names.
2.Reflects impairment of goodwill and intangible assets recognized as a result of the Acquisition.
3.Represents legal and professional services costs associated with the Acquisition and corresponding antitrust litigation, including compliance with the hold separate arrangements imposed by the European Commission, and legal and professional services costs associated with the divestiture.
4.Represents all stock-based compensation recognized on our standalone financial statements for the periods presented.
5.Represents employee severance, benefits, payroll taxes, and other costs associated with the Restructuring Plan.
Liquidity and Capital Resources
Sources of Liquidity
From inception through the closing date of Illumina’s acquisition of GRAIL, we had funded our operations primarily through the sale and issuance of redeemable convertible preferred stock and receipt of continuation payments from Illumina. Post- Acquisition until completion of the Spin-Off, we received funding on a quarterly basis directly from Illumina. While we generate revenue from screening and development services, these revenues have not been sufficient to fund all operations. On June 21, 2024, in connection with the Spin-Off we received a cash contribution of $932.3 million from Illumina. As of September 30, 2025, our cash and cash equivalents totaled $126.9 million and our short-term marketable securities totaled $413.2 million.
On October 16, 2025, the Company entered into the Samsung Stock Purchase Agreement relating to the Samsung Investment, with expected aggregate gross proceeds of approximately $110.0 million. We intend to use the net proceeds from the Samsung Investment to fund our commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes.
The closing of the Samsung Investment is subject to the satisfaction of certain conditions including, but not limited to obtaining regulatory approvals and the execution of strategic collaboration agreements by January 31, 2026. We are subject to a number of obligations described in the Samsung Stock Purchase Agreement. See Item 1A. “Risk Factors”.
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On October 21, 2025, we completed the Private Placement for aggregate gross proceeds of approximately $325.0 million, before deducting private placement expenses. We intend to use the net proceeds from the Private Placement to fund our commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes.
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 $10.1 billion which include charges for impairment of goodwill and intangible 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 will be sufficient to meet our working capital and capital expenditure needs into 2030, 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 are also restricted in our ability to raise money through certain transactions or with certain parties pursuant to the terms of the Tax Matters Agreement we entered into with Illumina on June 24, 2024 in connection with the Spin-Off. 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.
The following table summarizes our cash flows for the periods presented:

| Nine Months Ended
(in thousands) | September 30, 2025 |  | September 30, 2024
Net cash used in operating activities | $ | (235,222) |  |  | $ | (483,666) |
Net cash provided by (used in) investing activities | 151,653 |  |  | (4,905) |
Net cash provided by financing activities | — |  |  | 1,244,300 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (148) |  |  | 228 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | $ | (83,717) |  |  | $ | 755,957 |

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 nine months ended September 30, 2025 and September 30,
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2024, cash paid for annual bonuses accrued during the prior year was $24.2 million and $25.9 million, respectively.
Net Cash Used in Operating Activities
During the nine months ended September 30, 2025, net cash used in operating activities consisted of a net loss of $309.2 million offset by non-cash charges of $66.4 million and cash provided by changes in our operating assets and liabilities of $7.5 million. The non-cash adjustments primarily consisted of depreciation and amortization of $117.4 million, stock-based compensation expense of $44.5 million, and intangible impairment expense of $28.0 million, which was partially offset by a non-cash benefit of $108.8 million relating to deferred taxes and amortization of discount on marketable securities of $16.6 million. Changes in operating assets and liabilities was predominantly driven by a decrease in accounts receivable of $3.5 million, a decrease in prepaids and other current assets of $3.3 million, an increase in accrued and other liabilities of $0.9 million, a decrease in net operating lease assets and liabilities of $0.8 million, and a decrease in supplies of $0.5 million, partially offset by a decrease in accounts payable of $1.4 million.
During the nine months ended September 30, 2024, net cash used in operating activities consisted of a net loss of $1.9 billion, $53.8 million cash payments for equity awards, and cash used by changes in our operating assets and liabilities of $7.9 million, partially offset by non-cash charges of $1.5 billion. The non-cash adjustments primarily consisted of goodwill and intangible impairment expense of $1.4 billion, depreciation and amortization of $118.6 million and stock-based compensation expense of $72.5 million, which was partially offset by a non-cash benefit of $105.0 million relating to deferred taxes. Changes in operating assets and liabilities was predominantly driven by a decrease in accounts payable of $12.2 million, an increase in prepaids and other current assets of $1.3 million, partially offset by an increase in accrued and other liabilities of $1.8 million, a decrease in accounts receivable of $1.7 million, a decrease in net operating lease assets and liabilities of $1.5 million, and a decrease in supplies of $0.5 million.
Net Cash Provided by (Used in) Investing Activities
During the nine months ended September 30, 2025, net cash provided by investing activities primarily consisted of proceeds from maturities of marketable securities of $894.4 million, partially offset by purchases of marketable securities of $741.9 million and $0.8 million for capital expenditures primarily related to purchases of machinery and equipment for use in our laboratories.
During the nine months ended September 30, 2024, net cash used in investing activities primarily consisted of $4.9 million for capital expenditures primarily related to purchases of machinery and equipment for use in our laboratories.
Net Cash Provided by Financing Activities
During the nine months ended September 30, 2025, there was no cash provided by or used in financing activities.
During the nine months ended September 30, 2024, net cash provided by financing activities primarily consisted of $1.2 billion in funding received from Illumina.
Material Cash Requirements
With the exception of future cash requirements associated with our Sunnyvale, California lease, there have been no material changes to our material cash requirements from those disclosed in our 2024 Form 10-K. The 11-year lease term for our Sunnyvale, California lease will commence on October 1, 2026. We expect the lease commencement date for accounting purposes to be in the first half of 2026. See Note 7 — Leases for more information regarding this lease. The aggregate expected additional future payments under the Sunnyvale, California lease are $62.1 million, of which $0.5 million is payable within one year. Refer to Notes 8 and 9 to our Consolidated Financial Statements of our 2024 Form 10-K for a discussion of our operating lease obligations and purchase commitments, respectively.
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Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results of operations is based on our unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those disclosed within the consolidated financial statements for the year ended December 31, 2024 included in our 2024 Form 10-K, except as described below.
Stock- Based Compensation Expense - 2024 Employee Stock Purchase Plan
Our first ESPP offering period began in May 2025 with the first purchase date expected to take place in November 2025. The fair value of shares to be issued under our ESPP is determined using the Black-Scholes-Merton option-pricing model at the commencement of 6-month purchase periods in May and November of each year. The model assumptions include expected volatility, term, dividends, and the risk-free interest rate. The expected stock price volatility assumption was estimated using the average of our historical volatility and average volatility of our peer companies. The average of our peer companies and our own volatility is more representative of future stock price trends than our historical volatility due to our limited history as a public company. The expected term represents the term from the first day of the offering period to the purchase date. The expected dividend yield is determined to be 0% given that we have never declared or paid cash dividends on our common stock and do not anticipate paying such cash dividends. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards. Stock-based compensation for our ESPP is expensed using a straight-line attribution method over the offering period. Additionally, forfeitures are accounted for as incurred.
Indefinite-Lived Intangible Assets Impairment
Indefinite-lived intangible assets consist of GRAIL’s IPR&D and were measured by Illumina at fair value as of the Closing Date. We test indefinite-lived intangible assets for impairment annually or more frequently if an event occurs or circumstances change in the interim that would more likely than not reduce the fair value of the asset below its carrying amount. Indefinite-lived intangible assets are considered to be impaired when the carrying value of a reporting unit or asset exceeds its fair value. The estimates and assumptions used in our assessment represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. For the indefinite-lived intangible assets impairment analysis performed during the second quarter of 2025, the discount rate estimate was derived from the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide. The assumptions used are inherently subject to uncertainty and we note that small changes in these assumptions could have a significant impact on the concluded value.
JOBS Act
We are an emerging growth company 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.
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We will remain an emerging growth company (“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 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.
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Sensitivity
We are exposed to market risk related to changes in interest rates related primarily to our cash, cash equivalents and marketable securities. We had cash and cash equivalents of $126.9 million a s of September 30, 2025, which consisted primarily of bank deposits and money market funds. As of September 30, 2025, we had short-term marketable securities of $413.2 million. Our short-term marketable securities are held in U.S. government treasury bills. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of the interest rates in the United States. The primary objective of our investment activities is to preserve capital to fund our operations. We do not enter into investments for trading or speculative purposes.
Our investments are subject to interest rate risk and could fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio and the low-risk profile of our investments, a hypothetical 10% relative change in interest rates during any of the periods presented would not have had a material impact on our unaudited Condensed Consolidated Financial Statements.
Foreign Currency Sensitivity
The majority of our transactions occur in U.S. dollars. However, we do have certain transactions that are denominated in currencies other than the U.S. dollar, primarily the British pound, and we therefore are subject to foreign exchange risk. The fluctuation in the value of the U.S. dollar against the foreign currencies affects the reported amounts of expenses, assets, and liabilities associated with certain activities. We do not currently engage in any hedging activity to reduce our potential exposure to currency fluctuations, although we may choose to do so in the future. A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have had a material impact on our unaudited Condensed Consolidated Financial Statements.
Item 4. Controls and Procedures
Limitation on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
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Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Form 10‑Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.
C ha nges in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
For information with respect to Legal Proceedings, see Note 9 — Legal And Regulatory Proceedings to our unaudited condensed consolidated financial statements included in this Form 10-Q.
Item 1A. Risk Factors
Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or the healthcare industry as well as risks that affect businesses in general. In addition to the information set forth in this Form 10-Q, you should consider carefully the factors discussed in Part I, Item 1A. “Risk Factors” in our 2024 Form 10-K. The risks and uncertainties disclosed in such Annual Report and in this Form 10-Q could materially adversely affect our business, financial condition, cash flows or results of operations and thus our stock price.
These risk factors may be important to understanding other statements in this Form 10-Q and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q. Because of such risk factors, as well as other factors affecting our financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
The Samsung Investment is subject to closing conditions, including conditions beyond our control, and no assurance can be given that closing will take place on the timeline currently anticipated, or at all, or that we will achieve our goals under the definitive agreements to be entered into with Samsung C&T and/or Samsung Electronics. Any failure to close the Samsung Investment or achieve such goals could adversely impact our business, financial conditions, results of operations and liquidity.
On October 16, 2025, we entered into a stock purchase agreement (the “Samsung Stock Purchase Agreement”) with Samsung C&T Corporation (“Samsung C&T”), Samsung Electronics Singapore Pte. Ltd. (together with Samsung C&T, the “Samsung Investors”) and Samsung Electronics Co., Ltd. (“Samsung Electronics”), providing for the issuance and sale by us to the Samsung Investors in a private placement of an aggregate of 1,570,308 shares of our common stock, at a purchase price of $70.05 per share, upon the terms and conditions set forth in the Samsung Stock Purchase Agreement (the “Samsung Investment”). The Samsung Investment is subject to the satisfaction of certain closing conditions set forth in the Samsung Stock Purchase Agreement, including, but not limited to: (i) the satisfaction of certain regulatory approvals or clearances, including with respect to the Committee on Foreign Investment in the United States (“CFIUS”); (ii) the execution of a business collaboration agreement between us and Samsung C&T by January 31, 2026 relating to, among other things, Samsung C&T’s exclusive right to commercialize our Galleri test, and obligation not to commercialize any other multi-cancer early detection test, in Korea, the funding of such commercialization by Samsung C&T, a right of first negotiation for commercial rights to Japan and Singapore and commencement conditions with respect to negotiating and implementing a Korea-based laboratory; (iii) the execution of a strategic and operational collaboration agreement between us and Samsung Electronics by January 31, 2026; and (vi) certain other customary closing conditions. The agreements to be entered into in connection with such conditions are subject to the parties negotiating and entering into definitive agreements and the conditions included within the applicable definitive documents. The Samsung Stock Purchase Agreement requires Samsung C&T and us to negotiate the business collaboration agreement in good faith, and requires all parties to use commercially reasonable efforts to enter into the business collaboration agreement and the strategic opportunities collaboration agreement.
We may experience delays and difficulties in satisfying the conditions for closing of the Samsung Investment, and no assurance can be given that closing will take place on the timeline currently anticipated or at all. Some of the closing conditions are outside of our control and it is possible that not all of the closing conditions for the Samsung Investment will be satisfied or that we will not receive the expected proceeds on the timeline currently anticipated or at all. For example, the Samsung Investment is subject to, among others, certain regulatory approvals and clearances, including with respect to CFIUS. In addition, certain closing conditions require us,
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Samsung C&T, and Samsung Electronics to successfully negotiate and enter into definitive agreements. The final terms of all such definitive agreements are not yet established and such negotiation and execution, notwithstanding the term sheet attached to the Samsung Stock Purchase Agreement, may take longer than expected or may not be possible to accomplish on terms acceptable to us, or at all. This risk is higher with respect to terms that are not fully reflected in the term sheet, such as the commencement conditions for negotiation and implementation of a Korea-based laboratory.
In addition, even if we are successful in closing the Samsung Investment and in negotiating and executing definitive agreements, no assurance can be given that any agreement we may reach will achieve our goals or be on terms that prove to be economically or strategically beneficial to us. For example, we may not recognize or accomplish our strategic objectives under the business collaboration agreement or strategic and operational collaboration agreement, or may ultimately find ourselves restricted by the terms that we have negotiated under such agreements.
Any such adverse developments, including any failure to close the Samsung Investment, could adversely impact our business, financial condition, results of operations and liquidity.
Our business and results of operations will suffer if we fail to perform effectively.
There are market participants in the cancer detection space both in the United States and abroad, including Exact Sciences Corporation and Guardant Health, Inc., who have each introduced MCED products into the market in 2025. In addition, Adela, Inc., DELFI Diagnostics, Inc., Exai Bio, Inc., Freenome Inc. and Harbinger Health and Natera, Inc. within the United States and AnchorDx, Anpac Bio-Medical Science Co., Ltd., Burning Rock Biotech Limited, Datar Cancer Genetics, Elypta AB, Gene Solutions JSC, Insighta, Singlera Genomics, Inc. and Seekin, Inc. outside of the United States, among others, have stated that they are attempting to develop tests designed to detect certain types of cancer, including some that will use cell free DNA (“cfDNA”) analyses. The precision oncology market includes companies such as Roche/Foundation Medicine, Inc., Natera, Inc., Guardant, Inc., Tempus AI, Inc., Clearnote Health, NeoGenomics Laboratories, Personalis, Inc., Twist Bioscience Corp. and Adaptive Biotechnologies Corp., among others. These companies have or may have greater financial, technical, and other resources, such as larger research and development staff, well-established marketing and sales forces, existing integrated systems connected to health practices’ electronic health or medical records to facilitate product ordering and results delivery, may have different strategies to obtain reimbursement for their products, may deploy more effective sales and marketing campaigns or may operate in jurisdictions where lower standards of evidence are required to bring products to market. These companies may succeed in developing, acquiring, or licensing, on an exclusive basis or otherwise, or providers, payers, patients and other stakeholders may believe that these companies or other new market entrants may have tests or services that are more effective, have higher performance, or are less costly than our products. In addition, established medical technology, biotechnology, or pharmaceutical companies may invest to accelerate discovery and development of tests that could make our products less successful than we anticipate. For example, large and long-tenured healthcare, life sciences, or technology companies may initiate research and development of MCED and bring significant resources and disruption to the cancer detection space.
Our ability to perform successfully will depend largely on our ability to:
•demonstrate compelling advantages in the performance and convenience of our products, including on a cost efficient basis;
•achieve market acceptance of our products by healthcare providers and patients, including through our reputation;
•achieve adequate coverage and reimbursement by third-party payors for our products;
•differentiate our product from future tests and products of third parties;
•attract qualified scientific, data science, clinical development, product development, and commercial personnel;
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•obtain, maintain, defend, and enforce patent and other proprietary protection as necessary for our products;
•obtain and maintain any necessary or desirable marketing authorizations or certifications from regulators in the United States and other jurisdictions, and notified bodies;
•integrate product ordering and results delivery into practices’ electronic health or medical records systems;
•successfully collaborate with institutions in the discovery, development, and commercialization of our products; and
•successfully expand our operations and implement a successful sales and marketing strategy to support commercialization.
We may not be able to perform effectively if we are unable to accomplish one or more of these or similar objectives.
Our products or future products may not perform as expected, and the results of our clinical studies may not support the launch or use of our products or future products and may not comply with the requirements, or be replicated in later studies or in the post-market or real-world setting, required to support a commercial opportunity or for any necessary or desirable regulatory clearances, approvals, or certifications, or reimbursement or coverage.
Our success depends on our ability to provide reliable, high-quality products that perform as indicated in our product labeling, marketing, and advertising material, as well as our ability to complete clinical studies and comply with applicable regulatory requirements that enable us to commercialize our products and future products. Our commercial product, Galleri, which we have launched as a laboratory developed test (“LDT”) in the United States and for which we are pursuing a premarket approval application (“PMA”) with the U.S. Food and Drug Administration (the “FDA”) and our precision oncology portfolio, which we currently offer on a research-use-only basis, and any future products in development, may not perform as expected. Results from our ongoing or future studies, or from the post-market or real-world setting, involving current or future products or our methylation platform may be inconsistent with certain results obtained from our previous studies, or from interim results initially reported on those studies. In addition, results from our ongoing or future studies may not support certain product launch opportunities.
GRAIL intends to submit data from the prevalent screening round of the NHS-Galleri Trial as part of its evidence package for FDA premarket approval. The prevalent screening round is the first round of blood draws (of the three total blood draw rounds in the trial) with one year of follow up. The first early analysis was prepared for the NHS to determine whether the results were compelling enough to commence an implementation pilot in England prior to the final trial results. In May 2024, the NHS determined not to initiate the pilot on the basis of those available data and will evaluate the final results from the NHS-Galleri Trial, which are expected to be available in 2026, before determining whether to implement the Galleri test in the NHS. 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 disclosed information regarding the prevalent screening round of the NHS-Galleri Trial. We plan to submit the full prevalent screening round analysis from the NHS-Galleri Trial, together with data from the first approximately 25,000 participants in the PATHFINDER 2 study, and a bridging analysis (comparing and measuring concordance of the version of Galleri used in the NHS-Galleri Trial and PATHFINDER 2 study with the updated version of the Galleri test that we plan to submit to the FDA for premarket approval) as part of our premarket approval application in the first quarter of 2026. Various factors are likely to cause the final results to differ from a review of the first round results only. For example, cancer screening trials designed to show clinical utility are commonly conducted over three years with an annual screening period, because data from the first screening round only can be influenced by the fact that screening detects many prevalent late-stage asymptomatic cancers that have not yet been diagnosed. It is possible that the final results will be unsuitable or unavailable, which could have a significant adverse impact on the success of our commercial efforts for Galleri, our ability to achieve FDA authorization at all or within our anticipated timelines, our brand and reputation, our business, and our growth prospects. Furthermore, other studies have been or may be conducted
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in populations (such as our SUMMIT study which was conducted in a population of tobacco users) or under other circumstances which make their results more complicated to interpret or result in data that is more difficult to compare. In addition, as Galleri and our research-use-only offering are currently available to customers and others, any analyses or studies, including those conducted by third parties, that use our current or future products, or that examine elements of our methylation platform, may produce results that are inconsistent to evaluate independently or comparatively from our own studies. If any such inconsistent results were to be produced, either before or after launch of a product or future product, our reputation, business, financial condition, results of operations, and growth prospects would suffer.
Our products require a number of complex and sophisticated biochemical and bioinformatics processes, which could be adversely impacted by a number of different factors. An operational or technological failure in one of these complex processes or fluctuations in external variables may result in performance characteristics, such as sensitivity or specificity rates, that are lower than we anticipate or that vary between test runs or in a higher than anticipated number of tests that fail to produce results. In addition, we continue to evaluate and refine our algorithms and other processes under development. These refinements may inadvertently result in unanticipated issues that may reduce our performance characteristics, such as sensitivity or specificity rates, or otherwise adversely affect the performance of our tests and their results. Galleri was launched in the United States as an LDT in mid-2021 and an updated commercial version of the Galleri test was launched in December 2024. We plan to complete a PMA submission for a further updated version of our Galleri test, for which we expect we have substantially completed development. We may also be required or decide voluntarily to seek clearance or approval from the FDA for future products or alternative versions of our Galleri test.
In 2024, the FDA finalized a regulation pursuant to which LDTs would be subject to the FDA’s medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years (the “LDT Final Rule”). On March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices subject to the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), and remanded the matter to the FDA for further consideration. It remains uncertain what impact this ruling may have on the FDA’s authority to review marketing applications for LDTs or to take enforcement action against LDTs. If the FDA imposes new or different requirements for marketing applications of LDTs to be reviewable in light of the District Court’s decision, LDT manufacturers seeking FDA review may be required to establish that the test is a medical device subject to the FD&C Act, which could involve significant modification to test configurations, processes, or operations. If we could not ultimately obtain marketing authorization for our Galleri test or other tests where required or appropriate, our business would be substantially harmed. It is possible that the District Court’s decision may limit the FDA’s authority to review or approve tests that are in the process of pursuing marketing authorization, or that we may need to perform additional activities to support FDA review of our products as a result of this ruling.
Moreover, the FDA, other regulators, and notified bodies may require that we generate additional clinical data to support any clearance, approval, or certification we may seek, which could result in delays, increased costs, or other limitations or negative impacts on our ability to receive such clearance, approval, or certification, if at all, including narrowed indication or labeling than expected or desired. For additional information, see “-Risks Relating to Regulation and Legal Compliance-The regulatory clearance, approval, or certification processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming, and unpredictable. If we are ultimately unable to obtain any necessary or desirable regulatory approvals, clearances, or certifications, or if such approvals, clearances, or certifications are significantly delayed, our business will be substantially harmed.” in our 2024 Form 10-K.
Further, we plan to improve our products to enhance performance, offerings, scalability, and/or cost of sales. However, we may not be successful in transitioning our products to a new or enhanced version or iteration. Product development involves a lengthy and complex process and we may be unable to commercialize, validate, or improve performance of any of our products on a timely basis, or at all. For example, to the extent an enhanced, modified or updated version of an existing product is developed, we may be required to conduct a non-inferiority study or bridging analysis involving such version as compared to the relevant then-current version of the test using data (for example, clinical data and/or real world evidence data obtained through Galleri’s commercial use as an LDT), or could be required to undertake other regulatory requirements if the enhanced, modified or updated version is not considered similar enough to the then- current version to conduct a non-inferiority study. With respect to Galleri, we intend to conduct one or more bridging studies to measure and evaluate concordance,
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performance and safety of the subsequent, updated version of Galleri (for which we plan to submit our PMA) as compared to the version of Galleri used in our registrational trials. We plan to conduct any such bridging studies using previously collected clinical study data and other samples. Any such bridging study will need to be agreed upon with regulatory authorities and may be unsuccessful or insufficient to support approval. If unsuccessful or insufficient, we would be required to revert to a prior version of the test and forgo, or be delayed in, implementing any perceived or potential updates, including enhancements, or further enhance, modify or update to a new version of the test and run additional bridging studies. Reverting to a prior version of the test or running additional bridging studies may cause delays in our PMA submission timeline. Additionally, planned improvements to our products may cause unintentional technical, logistical or other issues. In late 2024, we began use of an updated commercial version of Galleri in commercial channels. This version incorporates an industrial scale platform with significant automation 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. We also expect that we have substantially completed development of the Galleri test version on a similar industrial scale platform that we will submit for PMA review. If we are unable to adequately prevent these issues from occurring, or to adequately identify and remedy these issues, we may experience reputational harm, lose customers and revenue, need to offer discounts, require additional expenditures, delay our PMA application, or suffer other negative consequences. Our failure to successfully develop new and/or improved products (including new versions of existing products) on a timely basis could have a material adverse effect on our results of operations and business.
Data from our clinical trials that we announce or publish from time to time before our trials are complete may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may publicly disclose preliminary or topline data from our clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the topline or preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available. Audits, internal or external, including by the FDA’s Bioresearch Monitoring (“BIMO”) program, of our studies or associated data, can require substantial amounts of time, personnel, and other resources to comply with, and may not be anticipated.
From time to time, we may also disclose interim data from our clinical studies. Interim data from these studies that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as subject enrollment continues and more data become available. Adverse differences between interim data and top-line, preliminary, or final data could significantly harm our business prospects. Further, disclosure of interim data by us or by third parties could result in volatility in the price of our common stock.
In particular, in the United Kingdom, we are working with NHS England to complete our NHS-Galleri Trial. In May 2024, the NHS determined, based on data from an early analysis of Galleri test performance results in the intervention arm from the prevalent screening round of the NHS-Galleri Trial, not to initiate an implementation pilot in England prior to the final trial results. We submitted to NHS England and plan to submit to the FDA information from the prevalent screening round. Various factors are likely to cause the final results to differ from the prevalent screening round results. Further, it is possible that the early preliminary, interim or final data may not be as we expect, may be inconsistent with prior NHS-Galleri Trial data, or with other studies we have conducted, or may be unsuitable to the NHS or the FDA. Similarly, in October 2025, performance and safety results from the first approximately 25,000 participants of the PATHFINDER 2 study were presented at the European Society of Medical Oncology (“ESMO”) Congress 2025. PATHFINDER 2 was initiated in 2021 to evaluate the safety and performance of the Galleri test when added to standard of care single cancer screening in 35,878 adults aged 50
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years and older with no clinical suspicion of cancer. As a result, not all data from our PATHFINDER 2 study has been reported, and as we continue to follow up the remaining approximately 10,000 participants in the study, we may find results that are not what we expect or that may be inconsistent with data previously presented. While we are not intending to include data from these 10,000 patients in our planned PMA submission, these data will be an important part of our future submission to, and communications with, the FDA to support our PMA. Any unexpected, unsuitable, or inconsistent results could have a significant adverse impact on the success of our commercial efforts for Galleri, our ability to achieve FDA authorization at all or within our anticipated timelines, our ability to achieve CMS or private payor reimbursement or coverage, our brand and reputation, our business, and our growth prospects.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, and our ability to receive regulatory clearance or approval or commercialize a particular product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding our business. If the data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to commercialize or obtain regulatory clearance or approval for our products may be harmed, which could harm our reputation, business, operating results, prospects or financial condition.
We face risks associated with tariffs and other trade and global macroeconomic restrictions, which may have a material adverse impact on our results of operations and financial condition.
Our business is subject to risks associated with conducting business internationally. For example, some parties with whom we have collaborative relationships are located outside the United States, including in the United Kingdom and Israel. Additionally, while a significant majority of our supplier spend is with vendors located within the United States, whose products are produced in the United States, we also rely on suppliers and vendors located outside of the United States or who produce the products that we use outside the United States, including in China, Mexico, South Africa and various European Union member states. We expect to continue to increase our international presence over time, which could increase these risks or introduce new risks. Accordingly, our future results could be harmed by a variety of factors, including:
•economic weakness, including inflation, or political instability, in particular non-U.S. economies and markets;
•challenges enforcing our contractual and intellectual property rights, especially in those foreign jurisdictions that do not respect and protect intellectual property rights to the same extent as the United States;
•trade protection measures, import or export controls and licensing requirements (including possible restrictions on licensing intellectual property to certain non-U.S. persons) or other restrictive actions by U.S. or non-U.S. governments;
•changes in non-U.S. laws, regulations and customs, tariffs, and trade barriers;
•changes in non-U.S. laws, regulations, and policies related to data privacy, data protection, and cybersecurity in the transfer or transmittal of data across boundaries and geographies;
•exchange rate risk we may face from denominating a portion of our transactions in currencies other than the U.S. dollar;
•changes in a specific country’s or region’s political or economic environment;
•negative consequences from changes in tax laws;
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•negative consequences from changes in U.S. national security laws, including those governing non-U.S. investors’ ownership of U.S. biotech and other technology companies and U.S. companies’ ability to enter into joint ventures with non-U.S. entities;
•compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad, or for non-U.S. employees in the United States;
•workforce uncertainty in countries where labor unrest is more common than in the United States;
•difficulties associated with staffing and managing international operations, including differing labor relations;
•potential liability under the Foreign Corrupt Practices Act (“FCPA”) or comparable foreign laws; and
•business interruptions resulting from geopolitical actions, including war and terrorism, such as recent conflicts in the Middle East, pandemics, or natural disasters more common in certain regions, including earthquakes, typhoons, floods, and fires; and
•negative consequences to our relationships with our customers, partners, and other collaborators in the event of impact to suppliers or our business internationally due to restrictive actions by U.S. or non-U.S. governments or changes in U.S. or non-U.S. laws.
In addition, in recent years, U.S. administrations have publicly supported potential trade proposals that may affect U.S. trade relations with other countries. It is unclear at this point how, if at all, such actions or other potential actions, including under the most recent U.S. Presidential administration, may impact our business or operations, and the uncertainty surrounding these matters might create difficulties in our efforts to partner with certain healthcare providers, suppliers, and insurance carriers. For example, the United States has maintained elevated tariffs and targeted trade measures on imports from China and has signaled continued use of reciprocal and sector-specific actions that could expand or shift over time. Enforcement focused on Chinese supply chains—such as tighter anti-transshipment scrutiny and product-specific actions—has increased compliance complexity and could disrupt sourcing, raise input costs, and constrain pricing or margins. Similar policies may be applied or adjusted with respect to other countries, and ongoing policy changes or legal challenges could lead to further volatility in rates, coverage, and enforcement. Such actions could increase our expenses, reduce our margins or increase our prices, make it difficult to obtain inputs we need for our products or have a material adverse effect on the broader economy. These risks and impacts may be exacerbated by additional tariffs in the United States or retaliatory tariffs imposed by other governments.
Our success depends in part on our ability to attract and retain the best available personnel with the necessary qualifications, which in a competitive global market means that our recruitment efforts should not be limited entirely to the United States. To the extent U.S. immigration-related policies, laws, rules, proclamations or orders restrict our ability to attract, or increase the cost of attracting, international talent, this could adversely impact our business and results of operations. For example, the current U.S. administration's decision, announced September 19, 2025, that, subject to limited exceptions, petitions for H-1B visas should be approved only if they are accompanied by a payment of $100,000, could hamper our recruitment efforts for any new personnel who require such a visa. Additional changes in U.S. immigration policies, rules, laws or orders could further increase our recruitment costs or delay key projects that require specialized expertise. In addition, restrictions or delays in the issuance of other visas or in immigration processing could adversely affect our ability to collaborate effectively with our employees outside the United States and to retain the qualified personnel needed for our operations.
Moreover, future operational expansion into other geographies will subject us to additional political and regulatory regimes that will require us to invest further in compliance efforts and may result in additional risks, including, among others, exposure to various and potentially conflicting regulations, international sanctions and compliance rules, country-specific requirements for testing, approval, and processing of patient information and biological samples, as well as the risks associated with political and macroeconomic climates in any such geographies. For example, the potential commercialization of Galleri with the NHS, subject to the results of the NHS-Galleri Trial, may be delayed or otherwise impacted if there is a change in the government in the United
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Kingdom. These and other risks associated with our planned international operations may materially and adversely affect our business, costs and growth prospects.
We also face risks from our international operations for Galleri, our precision oncology portfolio and other products we may develop. Our clinical trials to date have been conducted in the United States and the United Kingdom, and use of our tests in populations outside of these regions could result in differences in performance. Any performance differences experienced in screening populations outside of the United States or United Kingdom could result in customer dissatisfaction, reputational harm, real world data or adverse events that would be reportable to the FDA or other regulators, regulatory actions by regulators in international jurisdictions and other risks, all of which could have a material and adverse impact on our business, regulatory pathway, results of operations and growth prospects.
Our ability to successfully and efficiently conduct any required in-country studies in other countries or regions in which we seek to expand may also be impacted, or may be impossible, due to the regulatory requirements of such countries. Some countries may require that we carry out testing of our products or future products through government partnerships, which may be difficult to navigate or which may limit our ability to deliver the results we intend. Moreover, the demographics in other countries or regions may differ vastly, such that study results may not appear as successful, due to, for example, a lower incidence of cancer in the local population. Such outcomes may adversely impact demand for our products in other countries. Finally, our ability to expand internationally may be limited by the availability of international laboratory space or requirements that will permit us to store, collect, and analyze biological samples required for current or future products, including space that could be made available through potential partners in such countries or regions. These and other unknown risks make it difficult for us to assess the potential success of our international expansion and the costs associated therewith. For additional information, see “—Risks Relating to Regulation and Legal Compliance.”
Changes in funding, leadership, resources or prioritization, or other disruptions, in the U.S. or international government, including at the FDA, other government agencies, and notified bodies, could hinder our ability to develop, approve, certify, commercialize or receive reimbursement for our test.
Our ability to develop, approve, certify, commercialize or receive reimbursement for our test depends on interactions with, decisions of and approvals and payments by the U.S. and other governments. The ability of the FDA, foreign regulatory agencies, and notified bodies to review and clear, approve, or certify new products or changes to existing products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s, foreign regulatory agencies’, and notified bodies’ ability to hire and retain key personnel and accept the payment of user fees, government shutdowns, and other events that may otherwise affect the FDA’s, foreign regulatory agencies’ and notified bodies’ ability to perform routine functions. For example, in January 2025, federal employees were offered the option to make a deferred resignation and in April 2025 approximately 3,500 FDA staff positions were eliminated. These reductions in staff, and any future reductions, impact the workforce and resources of the FDA available to review products such as ours. Average review times at the FDA, foreign regulatory agencies, and notified bodies have fluctuated in recent years as a result of these factors. Disruptions at the FDA, other agencies, and notified bodies may also slow the time necessary for new medical devices or modifications to cleared, approved, or certified medical devices to be reviewed and/or approved, or certified by necessary government agencies or notified bodies, which would adversely affect our business.
For example, in recent years, the U.S. government has shut down several times, including an extended shutdown beginning on October 1, 2025. These shutdowns could have a broad range of negative effects on our business. For example, certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. We also receive certain government reimbursement payments for tests provided to patients in our REACH clinical trial, and these payments may be delayed or not provided if the government remains shutdown, or they are not budgeted for as part of any continuing resolution. In the future, this risk could be amplified as we continue to seek, and hope to achieve, additional government reimbursement for our test. Additionally, the government shutdown may occupy the attention of legislators or provide a difficult political environment for other legislative agenda topics, which could prevent or delay passage of legislation we support, such as the proposed legislation to enable coverage of FDA-approved MCED tests by Medicare. If a prolonged government shutdown occurs, or occurs again in the future, we could suffer any of these negative effects, or others, any of which could have a material adverse effect on our business.
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In addition, global health crises have impacted the ability of the FDA, foreign regulatory agencies, and notified bodies to perform their regular activities. For example, during the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points and the FDA has had to manage submission review times. Significant impact on the ability of the FDA, other regulatory authorities, or notified bodies to timely review and process our regulatory submissions, could have a material adverse effect on our business.
In the EU, for example, notified bodies must be officially designated to certify products and services in accordance with the EU IVDR. Their designation process, which is significantly stricter under the new Regulation, has experienced considerable delays due to the COVID-19 pandemic. Despite a recent increase in designations, the current number of notified bodies designated under the new Regulation remains significantly lower than the number of notified bodies designated under the previous regime. The current designated notified bodies are therefore facing a backlog of requests as a consequence of which review times have lengthened. This has been one of the reasons for the recent extension of the transitional provisions under the EU IVDR. Despite these recent developments, the way we are conducting or intend to conduct our business in the EU and the EEA and the ability of the applicable notified body to timely review and process our regulatory submissions and perform its audits may still be impacted, and our ability to commercially launch Galleri in the EU and EEA could be delayed.
We have launched Galleri as an LDT in the United States. In 2024, the FDA finalized a regulation that has been successfully challenged in federal court, pursuant to which the FDA planned to subject LDTs to medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years. A federal court recently vacated this rule.
While we plan to complete our PMA submission seeking regulatory approval from the FDA for Galleri, we launched Galleri in the United States as an LDT. LDTs are in vitro diagnostic (“IVD”) tests that are intended for clinical use and are designed, manufactured, and used within a single laboratory certified for high complexity testing under CLIA. The FDA has historically exercised enforcement discretion and has not enforced certain otherwise applicable FDA requirements, including premarket review, with respect to LDTs, with certain exceptions such as in the case of tests for public health emergencies, where the tests are available directly to the consumer, where the tests represented a significant public health concern, or where the FDA has concerns that a company’s performance claims related to its tests are not sufficiently validated by clinical data.
Even under that enforcement discretion policy, the FDA has issued warning letters to and safety communications about IVD device manufacturers for commercializing laboratory tests that were purported to be LDTs but that the FDA alleged failed to meet the definition of an LDT or otherwise were not subject to the FDA’s enforcement discretion policy.
Even for those LDTs that were subject to the historical enforcement discretion policy, the FDA for a number of years stated its intention to modify this policy and impose applicable medical device requirements to LDTs more broadly. To this end, on May 6, 2024, the FDA issued the LDT Final Rule in an effort to clarify the FDA’s historical view that LDTs are medical devices subject to the requirements applicable to other IVDs, and to phase out its enforcement discretion policy over a period of four years from issuance of the LDT Final Rule.
However, on March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices, and remanded the matter to the FDA for further consideration (the “LDT Final Rule Decision”). The decision was not appealed.
Further, if the FDA is unable to review LDTs, we may be required to make changes to our PMA application, our laboratory testing or other elements of our test platform, or otherwise take actions to allow the FDA to treat Galleri or future tests as medical devices, notwithstanding the LDT Final Rule Decision. These changes could require us to change the PMA application we have begun, which could delay our PMA application or any potential approval, require additional expenditures, require additional development and validation on the changes we may decide to make and could subject us to additional regulation by the FDA. If we are not able to manage these risks and changes, there could be a material adverse effect on our business and operations. In addition, further efforts by the FDA or Congress to impose more regulation on LDTs could create a negative public perception about the validity, safety, effectiveness, or performance of LDTs, including our products, that could adversely affect patient, provider, and customer perception about, and confidence in, our products.
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Moreover, the FDA may assert that we are improperly marketing our tests, including Galleri, as LDTs and may assert we do not comply with applicable medical device requirements, and in such cases may take enforcement action against us and/or require us to seek premarket review and obtain marketing authorizations, which may require that we cease marketing any LDT products until such marketing authorizations are obtained or the relevant applications are submitted. There can be no assurance that we will be able to obtain any required marketing authorization for our tests or that any labeling claims will be consistent with the claims we have made or intend to make for such products when launched as LDTs, or that such claims would be adequate to support continued adoption of and reimbursement for our products. In the event we are required to seek FDA marketing authorization for any current or planned products, the FDA may request that we provide additional analyses and information beyond that which we intend to produce based on the designs of our current and planned clinical studies, or that we modify or narrow our intended use or product claims. It is possible that the FDA, among other things, could disagree with our interpretation of data we have relied on to support our LDT launches for our intended uses. If we are required to provide additional analyses or additional data or perform additional clinical studies beyond those we currently contemplate to support the intended uses of our products or future products, our planned commercial launches may be delayed and we may be required to cease commercialization of any products we currently market as LDTs. A delay in the launch of our products or new versions of existing products, or significantly narrowing their intended uses, could negatively impact our financial condition and results of operations.
In addition, Congress has, for over the past decade, considered a number of proposals, which if enacted, would subject LDTs to additional regulatory requirements. For example, in recent years, Congress has worked on legislation to create a novel regulatory framework governing a new category of FDA-regulated products, referred to as in vitro clinical tests (“IVCTs”), which would govern LDTs and would be separate and distinct from the existing medical device regulatory framework. For example, most recently, in March 2023, the Verifying Accurate Leading-edge IVCT Development Act of 2023 (the “VALID Act”) was introduced. The bill would have established a risk-based approach to imposing requirements related to premarket review, quality systems, and labeling requirements on all IVCTs, including LDTs, but would grandfather certain LDTs marketed before the effective date of the bill and exempt them from certain requirements. It is unclear whether legislative proposals such as the VALID Act (including any proposals that would, in contrast, reduce FDA oversight of LDTs) will be introduced or passed by Congress or signed into law by the President. Depending on the approach adopted under any potential legislation or regulation, certain LDTs (likely those of higher risk) may be required to undergo some form of premarket review, potentially with a transition period for compliance and a grandfathering provision. Any such legislation could substantially alter our commercial offering and marketing of LDTs and negatively impact our financial condition and results of operations. Additionally, as a result of the District Court decision the regulatory environment around LDTs could be significantly relaxed, which could increase competition and reduce the effectiveness of our regulatory and reimbursement strategy.
If the FDA does not have authority to regulate LDTs as medical devices, there could be significant impacts to us and our industry, and our ability to compete could be impaired.
We have invested significantly in pursuing a PMA for Galleri, including conducting our NHS-Galleri Trial and PATHFINDER 2 study to support our PMA. We believe PMA approval for Galleri, if obtained, could bolster our position in the MCED market, and increase or accelerate provider and patient adoption, commercial and government reimbursement and coverage, and international opportunities. In the event the FDA is not able to exercise its medical device authority with respect to LDTs, our competitors or potential competitors in the MCED market may face less stringent regulatory requirements to enter the market or to continue to market their tests and we may face increased competition in our industry, and adapting to the new regulatory and competitive environment could be difficult, costly and time-consuming. If we are not able to adapt to the changed regulatory environment and increased competition, our business and prospects could be materially impacted.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) None.
(b) None.
(c) None.
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Item 6. Exhibits
The following documents are filed as exhibits hereto:

Exhibit Number |  | Exhibit Description |  | Incorporated by Reference |  | Filed Herewith
|  | Form |  | Date |  | Number |
2.1 |  | Separation and Distribution Agreement, dated June 21, 2024, between Illumina, Inc. and GRAIL, Inc. |  | 8-K |  | 6/24/24 |  | 2.1 |  |
3.1 |  | Certificate of Incorporation of GRAIL, Inc., dated June 21, 2024 |  | S-8 |  | 6/21/24 |  | 3.1 |  |
3.2 |  | Amended and Restated Bylaws of GRAIL, Inc., dated June 21, 2024 |  | S-8 |  | 6/21/24 |  | 4.2 |  |
3.3 |  | Certificate of Conversion |  | 8-K |  | 6/24/24 |  | 3.3 |  |
4.1 |  | F orm o f P re-F unded W arrant t o P urchase C ommon S tock |  | 8-K |  | 10/20/25 |  | 4.1 |  |
10.1 |  | Lease, dated September 11, 2025, by and between GRAIL, Inc. and Sunnyvale Office Acquisition, LLC |  | 8-K |  | 9/18/25 |  | 10.1 |  |
10.2^ |  | Stock Purchase Agreement, dated as of October 16, 2025, by and among GRAIL, Inc., Samsung C&T Corporation, Samsung Electronics Singapore Pte., Ltd. and Samsung Electronics Co., Ltd. |  | 8-K |  | 10/16/25 |  | 10.1 |  |
10.3† |  | Securities Purchase Agreement, dated as of October 18, 2025, by and among GRAIL, Inc. and the Investors named therein |  | 8-K |  | 10/20/25 |  | 10.1 |  |
10.4† |  | Registration Rights Agreement, dated as of October 18, 2025, by and among GRAIL, Inc. and the Investors named therein |  | 8-K |  | 10/20/25 |  | 10.2 |  |
31.1 |  | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  | *
31.2 |  | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  | *
32.1+ |  | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  | **
32.2+ |  | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  | **
101.INS |  | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document |  |  |  |  |  |  |  | ***
101.SCH |  | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |  |  |  |  |  |  |  | ***
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |  |  |  |  | ***
101.DEF |  | Inline XBRL Extension Definition Linkbase Document |  |  |  |  |  |  |  | ***
101.LAB |  | Inline XBRL Taxonomy Label Linkbase Document |  |  |  |  |  |  |  | ***
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  |  |  |  | ***
104 |  | Cover Page Interactive Data File (embedded within the Inline XBRL document) |  |  |  |  |  |  |  | ***

_________
^ Certain portions of this exhibit have been omitted as the Company has determined that the omitted information is (i) not material and (ii) the type of information that the Company customarily and actually treats as private or confidential.
† Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon
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request by the Securities and Exchange Commission; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, for any exhibits or schedules so furnished.
+ This certification accompanies the Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
* Filed herewith
** Furnished herewith
*** Submitted electronically herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  | GRAIL, Inc.
Date: | November 13, 2025 | By: | /s/ Robert Ragusa
|  |  | Robert Ragusa Chief Executive Officer (Principal Executive Officer)
Date: | November 13, 2025 | By: | /s/ Aaron Freidin
|  |  | Aaron Freidin Chief Financial Officer (Principal Financial Officer)

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