XML 30 R11.htm IDEA: XBRL DOCUMENT v3.25.1
RESTRUCTURING
 3 Months Ended
Mar. 31, 2025
Restructuring and Related Activities [Abstract]  
RESTRUCTURING
NOTE 5. RESTRUCTURING
2025 Restructuring
In the first quarter of 2025, we implemented an expense reduction initiative aimed at lowering our annualized run-rate operating expenses. These actions, which included workforce reductions and other cost-saving measures, were part of a broader strategic shift to prioritize the adoption of HiFi sequencing.
A summary of the pre-tax restructuring charges are as follows:
(In thousands)
Three Months Ended March 31, 2025Cumulative amount incurred to date
Employee separation costs (1)
$4,649 $4,649 
Total restructuring charges
$4,649 $4,649 
(1) $2.5 million was recorded in sales, general and administrative expense and $2.1 million in research and development expense.
Charges included employee separation costs comprised of approximately $2.4 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification (WARN) Act and approximately $2.2 million of severance costs.
In connection with the restructuring and strategic shift, we incurred an additional $388.2 million in costs. These include $359.3 million of accelerated amortization of certain intangible assets, $15.0 million of IPR&D impairment charges, $7.7 million related to excess inventory due to decreased external demand and $3.8 million for estimated losses on purchase commitments tied to anticipated future excess inventory included in cost of revenue, and $2.4 million of accelerated depreciation of fixed assets. See Note 3. Balance Sheet Components for additional information on the IPR&D impairment assessment and the change in estimated useful life of the intangible asset and accelerated amortization.
A summary of the liabilities related to the restructuring is as follows:
(In thousands, excluding non-cash activities)
Employee Separation Costs
Total
Expense recorded in Q1 2025
$4,649 $4,649 
Cash paid in Q1 2025
— — 
Amount recorded in current liabilities
as of March 31, 2025
$4,649 $4,649 
Estimated total restructuring costs to still be incurred$— $— 
2024 Restructuring
In the second quarter of 2024, we implemented an expense reduction initiative that included workforce reductions, the closing of our San Diego office, and other actions to reduce annualized run-rate operating expenses.
A summary of the pre-tax restructuring charges are as follows:
(In thousands)
Three Months Ended March 31, 2025Cumulative amount incurred to date
Employee separation costs$— $10,008 
Other costs975 16,189 
Total restructuring charges(1)
$975 $26,197 
(1) For the three months ended March 31, 2025, $1.0 million was recorded in sales, general and administrative expense.
Cumulative charges incurred to date include $15.9 million in sales, general and administrative expense; $5.9 million in research and development expense; and $4.4 million in cost of revenue.
Cumulative charges incurred to date include employee separation costs comprised of approximately $5.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification (WARN) Act and approximately $4.5 million of severance costs.
Other costs in the three months ended March 31, 2025 are primarily related to a lease termination fee and other costs related to our exit of the San Diego office. Other costs in cumulative charges incurred to date are primarily related to accelerated amortization and depreciation of $8.1 million for the right-of-use asset, leasehold improvements, and furniture and fixtures relating to the abandonment of the San Diego office. We also incurred cumulative charges to date for excess inventory of $3.6 million primarily relating to a decrease in internal demand resulting from the expense reduction initiatives which were recognized in cost of product revenues. The accelerated amortization and depreciation, which was recognized in sales, general and administrative expense, was determined as a result of the Company's change in estimate pertaining to its remaining useful life of the San Diego office utilizing the estimated date on which it planned to abandon the San Diego office. The lease liability pertaining to the San Diego office was also remeasured during the three months ended June 30, 2024 resulting in a reduction in the operating lease liability balance of $4.4 million, which was offset against the right-of-use asset on the condensed consolidated balance sheets. We fully exited our San Diego office in September 2024.
A summary of the liabilities related to the restructuring is as follows:
(In thousands)
Other Costs
Total
Amount recorded in current liabilities as of December 31, 2024$170 $170 
Additional expense recorded$975 $975 
Cash payments(581)(581)
Amount recorded in current liabilities as of March 31, 2025
$564 $564 
Estimated total restructuring costs to still be incurred$— $— 
The table above excludes noncash activities and amounts incurred relating to the San Diego office lease liability. The ending balance of the San Diego office lease liability as of March 31, 2025 is $1.8 million, and is included in operating lease liabilities, current on the condensed consolidated balance sheets.