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Revenue and Accounts Receivable Credit Concentration
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue and Accounts Receivable Credit Concentration

Note 9 – Revenue and Accounts Receivable Credit Concentration

We derive our revenue from two sources: (i) Diagnostic Tests, providing lung diagnostic testing services for healthcare providers associated with our five blood-based tests and (ii) Development Services, providing diagnostic testing services to biopharmaceutical, life sciences, and diagnostic companies.

Diagnostic Tests revenues consist of blood-based lung tests which are recognized in the amount expected to be received in exchange for diagnostic tests when the diagnostic tests are delivered. The Company conducts diagnostic tests and delivers the completed test results to the prescribing physician. The fees for diagnostic tests are billed either to a third party such as Medicare, medical facilities, commercial insurance payers, or to the patient. The Company determines the transaction price related to its diagnostic test contracts by considering the nature of the payer, test type, and historical price concessions granted to groups of customers. For diagnostic test revenue, the Company estimates the transaction price, which is the amount of consideration it expects to be entitled to receive in exchange for providing services based on its historical collection experience, using a portfolio approach. The Company recognizes revenues for diagnostic tests upon delivery of the tests to the physicians requesting the tests.

Development Services revenue is generated from the delivery of our on-market tests, pipeline tests, custom diagnostic testing, and other scientific services from contracts and business agreements with other diagnostics and life science tool partners for a purpose as defined by any individual customer, which is often with biopharmaceutical companies. The performance obligations and related revenue for these sales is defined by a written agreement between the Company and the customer. These services are generally completed upon the delivery of testing results, achievement of contractual milestone(s) as defined in the customer agreements, or over the term of the contract which is generally expected to be completed in one year or less. Revenue for these services is recognized upon delivery of the completed test results, upon completion of the contractual milestone(s), or over the term of the contract.

Revenues consisted of the following (in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Diagnostic Tests

 

$

19,835

 

 

$

17,168

 

 

$

54,049

 

 

$

47,503

 

Development Services

 

 

1,933

 

 

 

983

 

 

 

5,695

 

 

 

3,391

 

Total revenues

 

$

21,768

 

 

$

18,151

 

 

$

59,744

 

 

$

50,894

 

Deferred Revenue

Deferred revenue consists of cash payments from customers received or to be received in advance of delivery. As test results are delivered, the Company recognizes the deferred revenue in ‘Revenues’ in the condensed statements of operations. The Company had $0.7 million in ‘Deferred revenue’ recorded in the condensed balance sheet as of December 31, 2024 and $3.8 million was added throughout 2025 to ‘Deferred revenue’ for up-front cash payments while $1.7 million was recognized in revenues during the nine months ended September 30, 2025. The ‘Deferred revenue’ of $2.8 million recorded in the condensed balance sheet as of September 30, 2025 is expected to be recognized in revenues over the next twelve months as test results are delivered and services are performed. As of September 30, 2025 and December 31, 2024, the Company had $0.1 million in non-current deferred revenue, respectively, recorded within ‘Other long-term liabilities’ in the condensed balance sheets which represent amounts to be recognized in excess of twelve months from the respective balance sheet date.

In September 2025, the Company executed a Development Services contract for which the Company will receive $3.0 million as a non-refundable, up-front payment to be received in the three months ending December 31, 2025. As of September 30, 2025, the $3.0 million is recorded as a receivable in ‘Accounts receivable, net of allowance for credit losses’ and approximately $2.4 million remains in ‘Deferred revenue’ in the condensed balance sheet.

The Company’s customers in excess of 10% of total revenue and their related revenue as a percentage of total revenue were as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

United Healthcare

 

 

11

%

 

 

7

%

 

 

8

%

 

 

8

%

In addition to the above table, we collect reimbursement on behalf of customers covered by Medicare, which accounted for 30% and 34% of the Company’s total revenue for the three and nine months ended September 30, 2025 compared to 40% for both the three and nine months ended September 30, 2024, respectively.

The Company is subject to credit risk from its accounts receivable related to services provided to its customers. The Company’s third-party payors and other customers in excess of 10% of accounts receivable, and their related accounts receivable as a percentage of total accounts receivable were as follows:

 

 

As of

 

 

 

 

September 30, 2025

 

 

December 31, 2024

 

 

Medicare

 

 

16

%

 

 

21

%

 

Bio-Rad Laboratories, Inc.

 

 

22

%

 

 

—

 

 

Daiichi Sankyo

 

 

—

 

 

 

14

%