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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2026

☐ 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: 001-38943

Personalis, Inc.

(Exact Name of registrant as specified in its charter)


Delaware	27-5411038
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6600 Dumbarton Circle Fremont, California	94555
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 752-1300

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 $0.0001

     PSNL

     The Nasdaq Global 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 ☒ No ☐

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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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

     ☐

     Accelerated filer

     ☐

     Non-accelerated filer

     ☒

     Smaller reporting company

     ☒ 

     Emerging growth company

     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of registrant’s Common Stock outstanding as of April 29, 2026 was 104,721,098.

PERSONALIS, INC.

Form 10-Q

For the Quarterly Period Ended March 31, 2026

TABLE OF CONTENTS


		Page
	Note Regarding Forward-Looking Statements	3
	Summary of Risk Factors	4

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations	7
	Consolidated Statements of Comprehensive Loss	8
	Consolidated Statements of Stockholders’ Equity	9
	Consolidated Statements of Cash Flows	10
	Index to Notes	11
	Notes to Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	74
Item 6.	Exhibits	75
	Signatures	76

Table of Contents

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•

the evolution of cancer therapies and market adoption of our testing services;

•

estimates of our future revenue and the timing thereof, expenses, use of cash and other resources, cost savings, capital requirements, and our needs for additional financing and our ability to obtain financing when needed;

•

future reimbursement and reimbursement rulings and the timing thereof;

•

our business strategies, including our aim to focus on certain indications and the timing thereof;

•

the benefits of our testing services, including their ability to increase the probability of clinical trial success;

•

our ability to enter into and compete effectively in existing and new markets, with existing competitors and new market entrants;

•

our ability to manage and grow our business by expanding our sales to existing customers or introducing our testing services to new customers;

•

our sales, marketing and commercialization plans and strategies, including the expected benefits of and activities to be performed under our Commercialization and Reference Laboratory Agreement with Tempus AI, Inc. ("Tempus");

•

our future business with the U.S. Department of Veterans Affairs' Million Veteran Program ("VA MVP"), ModernaTX, Inc. ("Moderna"), Merck & Co., Inc. ("Merck"), and other collaboration partners and customers;

•

our belief that approval of personalized cancer therapies by the U.S. Food and Drug Administration ("FDA") may drive benefits to our business;

•

our ability to benefit from the scaling of our infrastructure and capacity at our headquarters facility in Fremont;

•

the impact our collaboration agreements and key opinion leaders may have on the broader use of our testing services in the future;

•

the potential impacts of inflation, macroeconomic conditions, and geopolitical conflicts on our business and operations;

•

our ability to establish and maintain intellectual property protection for our testing services or avoid claims of infringement;

•

our success in defending and enforcing our intellectual property rights, including patents;

•

potential effects of government regulation;

•

our ability to hire and retain key personnel; and

•

our ability to maintain proper and effective internal controls.

Actual events or results may differ from those expressed in forward-looking statements. As such, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, prospects, strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “Personalis,” “we,” “us” and “our” refer to Personalis, Inc. and our subsidiary, Personalis (UK) Ltd.

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Summary of Risk Factors

The following is a summary of the principal risks and uncertainties that could materially adversely affect our business, financial condition, or results of operations. You should read this summary together with the more detailed description of risk factors below under the heading “Risk Factors."

Operational, Strategic and Business Risks

•

We have a history of losses and we expect to incur significant losses for the foreseeable future and may not be able to generate sufficient revenue to achieve or sustain profitability.

•

If we are unable to increase sales of our current testing services or successfully develop and commercialize other services, or if we are unable to execute our sales and marketing strategy for our testing services or unable to gain sufficient acceptance in the market, or if we are unable to generate sufficient reimbursement or coverage by insurance or governmental payors for our testing services, we may fail to generate sufficient revenue to achieve profitability and sustain our business.

•

We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our revenue and accounts receivable; in particular, we currently derive a substantial portion of our revenue from three of our largest customers, Moderna, the VA MVP and Merck, and in the past have derived a substantial portion of our revenue from other large customers.

•

Building our clinical diagnostic testing business is subject to a number of reimbursement challenges and we may not be able to establish the medical necessity of our tests for coverage or reimbursement rates that cover our costs.

•

We are pursuing a partner-centric strategy and have key relationships with Tempus, Myriad Genetics, Inc, Moderna, and Merck, among others. These and any other partnering and/or collaboration agreements that we have entered into or may enter into in the future may not be successful, or may terminate, which could adversely impact our business or affect our ability to develop and commercialize our testing services.

•

We rely on a limited number of suppliers, or in some cases, a sole supplier, for some laboratory instruments and materials, and we may not be able to replace or immediately transition to alternative suppliers should we need to do so.

•

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.

•

We have a single facility and if it becomes damaged or inoperable, or we are required to vacate our facility, our ability to sell and provide our testing services and pursue research and development efforts may be jeopardized.

•

If we cannot develop testing services to keep pace with rapid advances in technology, medicine, and science our operating results and competitive position could be harmed.

•

Personalized cancer therapies represent new therapeutic approaches that could result in heightened regulatory scrutiny, delays in clinical development, or delays or inability to achieve regulatory approval, commercialization, or payor coverage, any of which could adversely affect our business.

•

The loss of key members of our executive management team or the inability to hire, retain, or motivate highly skilled personnel could adversely affect our business.

•

We may not be able to manage our future growth effectively, which could make it difficult to execute our business strategy.

•

We may acquire businesses or assets, form joint ventures, or make investments in other companies or technologies that could harm our operating results, dilute stockholders’ ownership, or cause us to incur debt or significant expense.

Regulatory, Legal and Cybersecurity Risks

•

Our tests may be subject to regulatory action if regulatory agencies or authorities determine that our tests do not appropriately comply with statutory and regulatory requirements enforced by the FDA, or equivalent foreign regulatory authorities and/or CLIA requirements for quality laboratory testing or equivalent foreign requirements.

•

Complying with numerous statutes and regulations pertaining to our business is an expensive and time-consuming process, and we may be subject to regulatory action if we or our testing service offerings do not comply with applicable requirements.

•

Our internal information technology systems, or those of our third-party vendors, contractors, or consultants, may fail or suffer security breaches, loss or leakage of data, and other disruptions, which could adversely affect our business.

•

Failure or perceived failure to comply with existing or future laws, regulations, contracts, self-regulatory schemes, standards, and other obligations related to data privacy and security (including security incidents) could harm our business. Compliance or the actual or perceived failure to comply with such obligations could increase the cost of our offerings, limit their use or adoption, and otherwise negatively affect our operating results and business.

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•

Our employees may engage in misconduct or other improper activities, such as noncompliance with regulatory standards and requirements, including the Foreign Corrupt Practices Act of 1977 and other anti-bribery laws, which could cause significant liability for us and harm our reputation.

•

Changes in health care policy could increase our costs, decrease our revenue, and impact sales of and reimbursement for our tests. If we grow our business by developing additional in vitro diagnostic tests, we may be subject to reimbursement challenges.

•

Competitors could take legal action against us for statements that are made by the Company and/or its representatives, which may require us to spend significant time and money, including damages, and could limit our ability to market our tests.

Intellectual Property Risks

•

Litigation or other proceedings or claims of intellectual property infringement, misappropriation, breach of license terms or other violations may require us to spend significant time and money, including damages, and could prevent us from selling our tests.

•

If we cannot license rights to use necessary technologies on reasonable terms, we may not be able to commercialize new services.

•

If we are not able to obtain, maintain and enforce patent protection for our testing services or technologies, our competitors and other third parties could develop and commercialize products, services and technologies similar or identical to ours, and our ability to successfully commercialize testing services, and technologies may be adversely affected.

•

If we are unable to protect the confidentiality of our trade secrets and know-how, our business would be harmed.

•

Our use of “open source” software could subject our proprietary software to general release, adversely affect our ability to sell our testing services, and subject us to possible litigation.

•

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Financial and Market Risks and Risks Related to Owning Our Common Stock

•

Our inability to raise additional capital on acceptable terms in the future may limit our ability to continue to operate our business and further expand our operations.

•

The market price of our common stock may be volatile or may decline steeply or suddenly regardless of our operating performance, we may not be able to meet investor or analyst expectations, and you may lose all or part of your investment.

•

Our quarterly results may fluctuate significantly, which could adversely impact our common stock’s value.

•

Insiders or holders of greater than five percent of our outstanding common stock may exercise significant control over our company and will be able to influence corporate matters.

•

Future sales of shares by existing stockholders, or the perception that such sales could occur, could cause the stock price of our common stock to decline.

•

We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation of the value of our common stock.

•

If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

•

Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our common stock; our amended and restated certificate of incorporation has an exclusive forum provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

•

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

PERSONALIS, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and par value data)


	March 31, 2026			December 31, 2025
Assets
Current assets
Cash and cash equivalents	$	73,594		$	124,245
Short-term investments		159,624			115,708
Accounts receivable, net (1)		13,022			16,203
Inventory and other deferred costs		6,930			6,144
Prepaid expenses and other current assets		5,028			5,651
Total current assets		258,198			267,951
Property and equipment, net		48,438			44,815
Operating lease right-of-use assets		14,957			15,118
Other long-term assets		3,802			6,280
Total assets	$	325,395		$	334,164
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable (2)	$	12,676		$	12,989
Accrued and other current liabilities (2)		22,201			25,079
Contract liabilities (3)		4,168			1,562
Total current liabilities		39,045			39,630
Long-term operating lease liabilities		31,023			31,866
Other long-term liabilities		562			1,483
Total liabilities		70,630			72,979
Commitments and contingencies (Note 11)
Stockholders’ equity
Preferred stock, $0.0001 par value — 10,000,000 shares authorized; none issued		—			—
Common stock, $0.0001 par value — 200,000,000 shares authorized; 104,691,704 and 102,475,891 shares issued and outstanding, respectively		10			10
Additional paid-in capital		916,117			892,331
Accumulated other comprehensive income (loss)		(70	)		104
Accumulated deficit		(661,292	)		(631,260	)
Total stockholders’ equity		254,765			261,185
Total liabilities and stockholders’ equity	$	325,395		$	334,164

(1) Includes related party accounts receivable of $4.5 million and $2.5 million as of March 31, 2026 and December 31, 2025, respectively.

(2) Includes related party liabilities of $4.4 million and $5.7 million as of March 31, 2026 and December 31, 2025, respectively.

(3) Includes related party contract liabilities of $2.7 million and nil as of March 31, 2026 and December 31, 2025, respectively.

See Notes to the Consolidated Financial Statements.

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PERSONALIS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2026			2025
Revenue (1)	$	15,472		$	20,605
Costs and expenses
Cost of revenue		15,191			13,398
Research and development		14,539			12,640
Selling, general and administrative (2)		17,903			12,263
Total costs and expenses		47,633			38,301
Loss from operations		(32,161	)		(17,696	)
Interest income		2,172			2,027
Interest expense		(47	)		(28	)
Other income (expense), net		20			(46	)
Loss before income taxes		(30,016	)		(15,743	)
Provision for income taxes		16			7
Net loss	$	(30,032	)	$	(15,750	)
Net loss per share, basic and diluted	$	(0.29	)	$	(0.18	)
Weighted-average shares outstanding, basic and diluted		104,191,862			87,463,885

(1) Includes related party revenue of $3.1 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively.

(2) Includes related party sales and marketing expenses of $2.9 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively.

See Notes to the Consolidated Financial Statements.

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PERSONALIS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026			2025
Net loss	$	(30,032	)	$	(15,750	)
Other comprehensive income (loss), net of tax
Changes in foreign currency translation adjustments:
Change during period		(26	)		33
Net changes in foreign currency translation adjustments		(26	)		33
Change in unrealized loss on available-for-sale debt securities		(148	)		(28	)
Comprehensive loss	$	(30,206	)	$	(15,745	)

See Notes to the Consolidated Financial Statements.

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PERSONALIS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

For the Three Months Ended March 31, 2026 and 2025

(In thousands, except share data)


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-In		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balance—December 31, 2025		102,475,891	$	10	$	892,331	$	104		$	(631,260	)	$	261,185
Proceeds from sales of common stock under ATM facility, net of commissions		2,127,155		—		20,952		—			—			20,952
Proceeds from exercise of stock options		85,203		—		281		—			—			281
Restricted stock units vested		3,455		—		—		—			—			—
Stock-based compensation		—		—		2,553		—			—			2,553
Foreign currency translation adjustment		—		—		—		(26	)		—			(26	)
Unrealized loss on available-for-sale debt securities		—		—		—		(148	)		—			(148	)
Net loss		—		—		—		—			(30,032	)		(30,032	)
Balance—March 31, 2026		104,691,704	$	10	$	916,117	$	(70	)	$	(661,292	)	$	254,765

Balance—December 31, 2024		85,171,146	$	9	$	752,961	$	(23	)	$	(549,990	)	$	202,957
Proceeds from sales of common stock under ATM facility, net of commissions		3,064,152		—		17,782		—			—			17,782
Proceeds from exercise of stock options		62,022		—		132		—			—			132
Restricted stock units vested		21,970		—		—		—			—			—
Stock-based compensation		—		—		2,219		—			—			2,219
Foreign currency translation adjustment		—		—		—		33			—			33
Unrealized loss on available-for-sale debt securities		—		—		—		(28	)		—			(28	)
Net loss		—		—		—		—			(15,750	)		(15,750	)
Balance—March 31, 2025		88,319,290	$	9	$	773,094	$	(18	)	$	(565,740	)	$	207,345

See Notes to the Consolidated Financial Statements.

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PERSONALIS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(30,032	)	$	(15,750	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation expense		2,553			2,219
Depreciation and amortization		2,371			2,587
Noncash operating lease cost		161			398
Amortization of discount on short-term investments		(1,125	)		(1,084	)
Other		21			(377	)
Changes in operating assets and liabilities
Accounts receivable (1)		3,181			(2,833	)
Inventory and other deferred costs		(786	)		1,017
Prepaid expenses and other assets		663			(1,230	)
Accounts payable (2)		(809	)		2,013
Accrued and other current liabilities (2)		(426	)		(2,742	)
Contract liabilities (3)		2,606			(1,136	)
Operating lease liabilities		(856	)		(993	)
Other long-term liabilities		—			(50	)
Net cash used in operating activities		(22,478	)		(17,961	)
Cash flows from investing activities:
Purchases of available-for-sale debt securities		(67,040	)		(64,281	)
Proceeds from maturities of available-for-sale debt securities		24,100			44,250
Purchases of property and equipment		(3,192	)		(2,511	)
Proceeds from sales of property and equipment (4)		120			—
Net cash used in investing activities		(46,012	)		(22,542	)
Cash flows from financing activities:
Proceeds from sales of common stock under ATM facility, net of commissions		20,952			17,782
Payment of costs related to Tempus and Merck Investment Agreements		—			(106	)
Proceeds from loans		—			2,587
Repayments of loans and finance leases		(1,278	)		(308	)
Payments for finance lease buyout		(2,125	)		—
Proceeds from issuance of common stock under equity incentive plans		281			132
Net cash provided by financing activities		17,830			20,087
Effect of exchange rates on cash, cash equivalents and restricted cash		9			2
Net change in cash, cash equivalents and restricted cash		(50,651	)		(20,414	)
Cash, cash equivalents and restricted cash, beginning of period		126,035			93,205
Cash, cash equivalents and restricted cash, end of period	$	75,384		$	72,791

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	$	73,594		$	71,001
Restricted cash, included in other long-term assets		1,790			1,790
Total cash, cash equivalents and restricted cash	$	75,384		$	72,791

Supplemental cash flow information:
Acquisition of property and equipment included in accounts payable and accrued liabilities	$	3,043		$	261
Finance lease assets were reclassified to property and equipment upon lease buyout		2,246			—

(1) Includes a change in related party receivable of $2.1 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.

(2) Includes a change in related party liabilities of $1.3 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively.

(3) Includes a change in related party contract liabilities of $2.7 million and nil for the three months ended March 31, 2026 and 2025, respectively.

(4) Includes proceeds from a related party of $0.1 million and nil for the three months ended March 31, 2026 and 2025, respectively.

See Notes to the Consolidated Financial Statements.

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PERSONALIS, INC.
INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

		Page
Note 1.	Company and Nature of Business	12
Note 2.	Summary of Significant Accounting Policies	12
Note 3.	Revenue	13
Note 4.	Balance Sheet Details	14
Note 5.	Fair Value Measurements	16
Note 6.	Loans	17
Note 7.	Leases	17
Note 8.	Related Party Transactions	18
Note 9.	Stock-Based Compensation	21
Note 10.	Segment and Geographic Information	23
Note 11.	Commitments and Contingencies	24
Note 12.	Basic and Diluted Net Loss Per Common Share	25

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PERSONALIS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1. Company and Nature of Business

Personalis, Inc. (the "Company" or "Personalis") develops, markets, and sells advanced cancer genomic testing services. The testing services are used by physicians to detect residual or recurrent cancer in patients, monitor cancer response to therapy, and uncover insights for therapy selection. The testing services are used by pharmaceutical companies for translational research, biomarker discovery, the development of personalized cancer therapies, and clinical trials. The Company also provides whole exome sequencing services for other diagnostic companies and whole genome sequencing services for population sequencing initiatives. The principal markets for the Company’s testing services are in the United States and Europe.

The Company is expanding its business model to offer genomic testing services directly to cancer patients in a clinical setting. However, revenue generated from clinical customers was not significant for any periods presented in these consolidated financial statements.

The Company was incorporated in Delaware in February 2011 and began operations in September 2011. The Company formed a wholly owned subsidiary, Personalis (UK) Ltd., in August 2013. The Company operates and manages its business as one reportable operating segment, which is to provide advanced cancer genomic testing services for precision oncology applications, personalized testing, and other tests.

The Company has incurred losses to date and expects to incur additional losses for the foreseeable future. The Company continues to invest the majority of its resources in the development and growth of its business, including investments in research and development and sales and marketing efforts. The Company’s activities have been financed to date primarily through the sale of its equity securities and cash from operations.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim reporting. Certain note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The consolidated financial statements include the accounts of Personalis, Inc. and its wholly owned subsidiary, Personalis (UK) Ltd. All intercompany balances and transactions have been eliminated in consolidation.

The consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2026.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The estimates include, but are not limited to, revenue recognition, useful lives assigned to long-lived assets, discount rates for lease accounting, the valuation of stock options, provisions for income taxes, and fair value of lease right-of-use assets. Actual results could differ from these estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.

Concentration of Credit Risk and Other Risks and Uncertainties

The Company is subject to credit risk from its portfolio of cash and cash equivalents. The Company’s cash and cash equivalents are deposited with high-quality financial institutions. Deposits at these institutions may, at times, exceed federally insured limits. Management believes these financial institutions are financially sound and, accordingly, that minimal credit risk exists.

The Company also invests in investment-grade debt instruments and has policy limits for the amount it can invest in any one type of security, except for securities issued or guaranteed by the U.S. government. The goals of the Company’s investment policy are as follows: preservation of principal; liquidity of investments sufficient to meet cash flow requirements; avoidance of inappropriate concentration and credit risk; competitive after-tax rate of returns; and fiduciary control of cash and investments. Under its investment policy, the Company limits the amounts invested in such securities by credit rating, maturity, investment type, and issuer. As a result, management believes that these financial instruments do not expose the Company to any significant concentrations of credit risk.

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The Company purchases various reagents and sequencing materials from sole-source suppliers. Any extended interruption in the supply of these materials could result in the Company’s inability to secure sufficient materials to conduct business and meet customer demand.

The Company routinely assesses the creditworthiness of its customers and does not require collateral. Historically, the Company has not experienced significant credit losses from accounts receivable. Multiple customers have provided more than 10% of total revenue in the periods presented, or accounted for more than 10% of accounts receivable at each respective balance sheet date, as follows:


	Revenue		Accounts Receivable
	Three Months Ended March 31,		March 31, 2026	December 31, 2025
	2026	2025
Merck & Co., Inc. (1)	19%	*	33%	12%
VA MVP	16%	20%	*	*
Moderna, Inc.	16%	27%	14%	*
Natera, Inc.	*	12%	*	*
Genentech, Inc.	*	*	22%	*
US Department of Veterans Affairs	*	*	*	24%
AstraZeneca UK Ltd	*	*	*	10%

* Less than 10% of revenue or accounts receivable

(1) Consists of related party revenue and related party receivable, respectively.

Significant Accounting Policies

As of March 31, 2026, the Company’s significant accounting policies are consistent with those discussed in Note 2 - “Summary of Significant Accounting Policies” in its consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

New Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item on an interim and annual basis. ASU 2024-03 also requires disclosure of the total amount of selling expenses and the Company's definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Although the new standard requires comparative disclosures for all periods presented, entities will be permitted to begin applying the guidance prospectively. Therefore, comparative disclosures are not required for reporting periods beginning before the effective date. Entities can elect to apply the new standard retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact that adoption of ASU 2024-03 will have on its consolidated financial statement disclosures.

Note 3. Revenue

The Company disaggregates revenue by the following five customer types:

•

Pharma testing services includes sales of testing services and data analytics for clinical trials and research to pharmaceutical companies in support of their oncology drug development programs. Contracts typically contemplate a single project and involve a range of tests and analytics to fulfill the requirements of each particular project.

•

Enterprise sales includes sales of tumor profiling and diagnostic tests directly to another business as an input to their products. The Company is typically contracted to deliver specified tests and analytics in high volume over time. Revenue from the Company's commercial relationship with Natera to provide advanced tumor analysis for use in Natera's molecular residual disease ("MRD") test makes up substantially all of the revenue in this category.

•

Population sequencing includes sales of genomic sequencing services and data analytics to support large-scale genetic research programs. The Company is typically contracted to perform whole genome sequencing and provide data that can be used for analysis across a large volume of samples. All of the revenue within this category is from the Company's partnership with the VA MVP.

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•

Clinical diagnostic includes sales of ultrasensitive, tumor-informed diagnostics tests, ordered by healthcare providers for cancer patients, that can detect cancer recurrence earlier and aids in treatment decision-making. Revenue is derived from Medicare and private insurance reimbursements.

•

Other includes sales of genomic tests and analytics to universities and non-profits.

The following table presents the Company's revenue disaggregated by customer type (in thousands):


	Three Months Ended March 31,
	2026		2025
Pharma testing services (1)	$	10,724	$	13,594
Enterprise sales		393		2,465
Population sequencing		2,500		4,213
Clinical diagnostic		1,431		308
Other		424		25
Total revenue	$	15,472	$	20,605

(1) Includes related party revenue of $3.1 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively.

Contract Assets and Liabilities

The opening and closing balances of receivables and contract liabilities from contracts with customers are shown below (in thousands). Contract assets were immaterial for all periods presented.


	March 31, 2026		December 31, 2025
Opening balances:
Accounts receivable, net	$	16,203	$	8,140

Short-term contract liabilities		1,562		3,100
Total contract liabilities		1,562		3,100

Closing balances:
Accounts receivable, net		13,022		16,203

Short-term contract liabilities		4,168		1,562
Total contract liabilities	$	4,168	$	1,562

Remaining Performance Obligations

Amounts collected in advance of services being provided are deferred as contract liabilities in the consolidated balance sheets. The associated revenue is recognized, and the contract liability is reduced, as the services are subsequently performed. Remaining performance obligations are comprised mainly of contract liabilities, and to a lesser extent, non-cancellable contracts for which the Company has not invoiced and has an obligation to perform, and for which revenue has not yet been recognized in the consolidated financial statements. As of March 31, 2026, amounts related to unfulfilled services under contracts with an original expected duration of more than one year were immaterial. Revenue recognized that was included in the contract liability balance at the beginning of each reporting period was $0.1 million and $1.1 million for the three months ended March 31, 2026 and 2025, respectively.

Note 4. Balance Sheet Details

Inventory and other deferred costs consist of the following (in thousands):


	March 31, 2026		December 31, 2025
Raw materials	$	5,254	$	5,257
Other deferred costs		1,676		887
Total inventory and other deferred costs	$	6,930	$	6,144

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Property and equipment, net consists of the following (in thousands):


	March 31, 2026			December 31, 2025
Machinery and equipment	$	31,992		$	29,647
Computer equipment		19,998			19,998
Computer software		5,024			5,024
Furniture and fixtures		2,310			2,310
Construction in progress		3,645			56
Leasehold improvements		41,691			41,691
Total		104,660			98,726
Less: accumulated depreciation and amortization		(56,222	)		(53,911	)
Property and equipment, net	$	48,438		$	44,815

Depreciation and amortization expense for the three months ended March 31, 2026 and 2025 was $2.3 million and $2.6 million, respectively.

Accrued and other current liabilities consist of the following (in thousands):


	March 31, 2026		December 31, 2025
Accrued compensation	$	5,566	$	6,961
Operating lease liabilities		6,879		6,892
Loans—current portion (Note 6)		879		1,190
Market Development Fees received from Tempus (Note 8)		3,150		4,200
Employee ESPP contributions		913		377
Other current liabilities		4,814		5,459
Total accrued and other current liabilities	$	22,201	$	25,079

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Note 5. Fair Value Measurements

The following tables show the Company’s financial assets measured at fair value on a recurring basis and the level of inputs used in such measurements as of March 31, 2026 and December 31, 2025 (in thousands):


	March 31, 2026
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Fair Value Level
Assets
Cash and cash equivalents:
Cash	$	4,210	$	—	$	—		$	4,210
Money market funds		13,873		—		—			13,873	Level 1
Commercial paper		299		—		—			299	Level 1
Commercial paper		52,234		—		(9	)		52,225	Level 2
U.S. government securities		2,987		—		—			2,987	Level 2
Total cash and cash equivalents		73,603		—		(9	)		73,594
Short-term investments:
Commercial paper		6,164		—		(3	)		6,161	Level 1
Commercial paper		19,301		—		(6	)		19,295	Level 2
Corporate debt securities		5,197		—		(5	)		5,192	Level 1
U.S. agency securities		16,891		—		(15	)		16,876	Level 2
U.S. government securities		112,136		15		(51	)		112,100	Level 2
Total short-term investments		159,689		15		(80	)		159,624
Total assets measured at fair value	$	233,292	$	15	$	(89	)	$	233,218

	December 31, 2025
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Fair Value Level
Assets
Cash and cash equivalents:
Cash	$	4,919	$	—	$	—		$	4,919
Money market funds		45,349		—		—			45,349	Level 1
Commercial paper		498		—		—			498	Level 1
Commercial paper		73,491		—		(12	)		73,479	Level 2
Total cash and cash equivalents		124,257		—		(12	)		124,245
Short-term investments:
Commercial paper		498		—		—			498	Level 1
Commercial paper		12,734		—		(2	)		12,732	Level 2
Corporate debt securities		4,680		1		(2	)		4,679	Level 1
U.S. agency securities		14,138		1		(5	)		14,134	Level 2
U.S. government securities		83,573		92		—			83,665	Level 2
Total short-term investments		115,623		94		(9	)		115,708
Total assets measured at fair value	$	239,880	$	94	$	(21	)	$	239,953

The amortized costs and fair value of marketable debt securities (excluding cash and money market funds), by contractual maturity, at March 31, 2026 are as follows (in thousands):


	March 31, 2026
	Amortized Cost		Fair Value
Less than 1 year	$	213,214	$	213,140
1 to 5 years		1,995		1,995
Total	$	215,209	$	215,135

Unrealized losses have not been recognized as losses in the consolidated statements of operations as the Company neither intends to sell, nor anticipates that it is more likely than not that the Company will be required to sell the securities before recovery of their amortized cost basis. The declines in fair value are due primarily to changes in market interest rates, rather than credit losses.

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Note 6. Loans

Amounts outstanding under loans are as follows (in thousands):


	March 31, 2026			December 31, 2025
Principal	$	944		$	2,143
Less: unamortized discount		(65	)		(91	)
Total carrying amount		879			2,052
Less: current portion (included in accrued and other current liabilities)		(879	)		(1,190	)
Long-term portion (included in other long-term liabilities)	$	—		$	862

Equipment and Software Loans

In July 2022, the Company entered into a secured payment agreement with a financing entity to finance the purchase of internal use software licenses and related ongoing support from a vendor. In January 2025, $0.4 million was outstanding and waived entirely as part of a settlement agreement with the vendor related to a service claim on the ongoing support component of the agreement. The $0.4 million settlement was recognized as a gain and presented as an offset to maintenance costs upon the settlement, included as part of selling, general and administrative in the consolidated statements of operations.

In January 2025, the Company entered into another secured payment agreement to finance the purchase of $2.8 million of internal use software licenses and related ongoing support (the "January 2025 Agreement"). The Company agreed to repay the financed amount in three payments of $0.7 million in February of 2025, $1.2 million in February 2026, and $0.9 million in February 2027. The financing entity and vendor are not related. The payment agreement is noninterest bearing and the Company concluded that the stated zero interest rate did not represent fair and adequate compensation to the financing entity for the use of the related funds. Accordingly, the Company approximated the rate at which it could obtain financing of a similar nature from other sources at the date of the transaction. The resulting imputed interest rate was 8.9% and was used to establish the present value of the payment agreement.

The total initial present value of the January 2025 Agreement was $2.6 million. The discount of $0.2 million is being recognized as interest expense in the consolidated statements of operations over the life of the payment agreement. The first repayment of $0.7 million was billed in March 2025 and paid in April 2025. The second repayment of $1.2 million was billed and paid in January 2026. Interest expense for the three months ended March 31, 2026 and 2025 was immaterial.

Note 7. Leases

In 2021, the Company entered into a noncancelable operating lease for approximately 100,000 square feet in Fremont, California used for laboratory operations and its corporate headquarters. The lease term is 13.5 years and commenced in October 2022. The Company gained early access to the premises for the purpose of constructing and installing tenant improvements, for which the landlord contributed $15.1 million. Such contributions were accounted for as lease incentives and are recognized as reductions to lease expense over the lease term. The lease expires at the end of March 2036 and includes two options to extend the term for a period of five-years per option at market rates. The Company determined the extension options are not reasonably certain to be exercised. The lease includes escalating rent payments.

The Company has a noncancelable operating lease expiring in November 2027 for 31,280 square feet in Menlo Park, California previously used for laboratory operations and its former corporate headquarters. The lease includes escalating rent payments. The Company moved all laboratory operations to the Fremont facility during the third quarter of 2023, resulting in a lease impairment charge at that time. The Company is actively marketing the vacated Menlo Park space for sublease.

The Company has noncancelable operating leases for data center space expiring in 2026. The leases include renewal options that the Company determined are not reasonably certain to be exercised. Separately, the Company also has various other short-term leases.

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As of March 31, 2026, operating leases had a weighted-average remaining lease term of 9.2 years and a weighted-average discount rate of 10.6%. Discount rates are based on estimates of the Company's incremental borrowing rate, as the discount rates implicit in the leases cannot be readily determined. Future lease payments under operating leases as of March 31, 2026 were as follows (in thousands):


	Amount
2026 (remaining nine months)	$	5,387
2027		7,189
2028		5,215
2029		5,371
2030		5,532
2031 and thereafter		31,894
Total future minimum lease payments		60,588
Less: imputed interest		(22,686	)
Present value of future minimum lease payments		37,902
Less: current portion of operating lease liability (included in accrued and other current liabilities)		(6,879	)
Long-term operating lease liabilities	$	31,023

Cash paid for operating lease liabilities, included in cash flows from operating activities in the consolidated statements of cash flows, for the three months ended March 31, 2026 and 2025, was $1.8 million and $2.1 million, respectively.

Components of lease costs were as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Lease cost
Operating lease cost	$	1,149	$	1,479
Short-term lease cost		1		1
Variable lease cost		705		370
Total lease cost	$	1,855	$	1,850

In September 2025, the Company entered into an agreement to lease lab equipment for 36 months with 33 monthly payments of $0.1 million, commencing in January 2026. The Company classified this lease as a finance lease as the agreement contains an early buyout option which the Company was reasonably certain to exercise. Pursuant to the early buyout option, the Company can purchase the equipment and simultaneously terminate the agreement by paying the purchase price of $2.1 million. In accordance with the agreement, in January 2026, the Company exercised the purchase option and paid $2.1 million. The purchase price was recognized as part of finance lease assets and finance lease liabilities. At the time the Company exercised the purchase option, it reclassified the finance lease assets to property and equipment.

As of March 31, 2026, finance lease assets and liabilities were $0.8 million and $1.1 million, respectively. As of December 31, 2025, finance lease assets and liabilities were $3.1 million and $3.2 million, respectively. Finance lease cost was immaterial for the three months ended March 31, 2026.

Finance lease liabilities with payments due within one year are classified as short-term liabilities and reported within the "Accrued and other current liabilities" line in the consolidated balance sheets. Finance lease liabilities with payments due beyond one year are classified as long-term liabilities and reported with the "Other long-term liabilities" line in the consolidated balance sheets.

Note 8. Related Party Transactions

The Company determined that Tempus and Merck Sharp & Dohme LLC ("Merck") are related parties because they own more than 10% of the Company's common stock.

Tempus

Tempus acquired its ownership stake in August 2024 by exercising two warrants issued to Tempus in November 2023 in consideration of Tempus' obligations to Personalis under the Tempus Agreement (as defined below), for an aggregate of 9,218,800 shares of Personalis' common stock at an average exercise price of $2.00 per share, and purchasing an additional 3,500,000 shares of Personalis' common stock at a price per share of $5.07 under an investment agreement entered into with Tempus in August 2024.

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Overview of Tempus Agreement

In November 2023, the Company entered into a Commercialization and Reference Laboratory Agreement (as amended by Amendment No. 1, dated August 16, 2024, Amendment No. 2, dated September 20, 2024, Amendment No. 3, dated December 13, 2024, Amendment No. 4, dated July 8, 2025 and Amendment No. 5, dated September 11, 2025, collectively, the “Tempus Agreement”) with Tempus pursuant to which Tempus markets the Company's NeXT Personal® Dx test in the United States. The Company performs tests ordered by patients through Tempus and the Company bills the patients or payors. The Company compensates Tempus for orders obtained and results delivered on a per-test basis. The term of the Tempus Agreement is six years, which may be extended for successive one-year terms. Either party may terminate the Tempus Agreement for convenience upon 30 months' prior written notice.

Under the Tempus Agreement, the Company conducted development activities to analytically validate NeXT Personal Dx in three indications: breast cancer, lung cancer and immuno-oncology monitoring. In consideration of the Company performing such development activities, in addition to the activation and first milestone fees, Tempus agreed to pay the Company a second milestone fee of $6.0 million (the "Market Development Fee"), payable in six equal quarterly installments.

Separately, the parties are performing co-promotion activities and the Company is compensating Tempus for promotional and commercialization services through the end of 2026.

The Tempus Agreement also granted Tempus access to initial and longitudinal genomic data derived from performance of the tests and Tempus will have the right to use such data. If Tempus licenses such data to a third party and Tempus recognizes revenue from such license, Tempus will pay the Company a percentage of its gross revenues attributable to such license that is in the range of 10% to 20%. Such revenue share shall be payable during the term of the agreement and for 10 years thereafter. There was no revenue share recognized for the three months ended March 31, 2026 and 2025, respectively.

Impact of Tempus Agreement on the Consolidated Financial Statements

For the three months ended March 31, 2026 and 2025, the Company recognized revenue of $0.2 million and an immaterial amount, respectively, related to the Tempus Agreement and recorded it in its consolidated statement of operations. As of March 31, 2026 and December 31, 2025, $0.2 million and $0.4 million, respectively, was outstanding as a receivable from Tempus and is included in accounts receivable in the consolidated balance sheets.

The Market Development Fee for the second milestone is recorded as a liability when received and offset against promotional fees as they are paid by the Company to Tempus. As of September 30, 2025, all of the $6.0 million Market Development Fee for the second milestone has been received.

Amounts of transactions with Tempus during each income statement period presented, along with amounts due from or to Tempus as of each balance sheet date, are as follows (in thousands):


	Income Statement
	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Orders and results delivery fees and net promotional fees—Selling, general and administrative expenses	$	2,901	$	575


	Balance Sheet
	March 31, 2026		December 31, 2025
Accounts payable and accrued and other current liabilities:
Unamortized Market Development Fees	$	3,150	$	4,200
Accounts payable and accrued liabilities to Tempus		1,252		1,542
Total accounts payable and accrued and other current liabilities	$	4,402	$	5,742

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Merck Sharp & Dohme LLC

Investment Agreement with Merck

On December 19, 2024, the Company entered into an investment agreement (the "Merck Investment Agreement") with Merck under which the Company issued and sold 14,044,943 shares of common stock at a price per share of $3.56, representing the last reported closing price of the common stock. The Company received $50.0 million of cash from the sale of the shares and incurred $0.3 million of issuance costs directly related to the sale. Pursuant to the terms of the Merck Investment Agreement, the Company agreed to reserve $10.0 million of the proceeds to open an ISO-certified laboratory in a region outside of the United States, with such region mutually agreed upon by the Company and Merck. This cash was not legally restricted under the Merck Investment Agreement and therefore included in cash and cash equivalents as of March 31, 2026 and December 31, 2025.

Before Merck became a related party in December 2024, the Company entered into a Master Service Agreement (the “Master Agreement”), in June 2017, as amended from time to time, with Merck for the performance of DNA and RNA sequencing analysis and data interpretation services, as well as synthesis and/or analysis of chemical compounds, genetic material and related samples for preclinical research purposes. In February 2024, the Company entered into an amendment whereby Merck engaged the Company to provide clinical laboratory services in connection with Merck's clinical studies.

During the three months ended March 31, 2026 and 2025, the Company invoiced $2.9 million and $0.5 million, respectively, pursuant to the terms of the Master Agreement and recorded as revenue in its consolidated statements of operations. As of March 31, 2026 and December 31, 2025, $4.3 million and $2.0 million, respectively, was outstanding as a receivable from Merck and included in accounts receivable in the consolidated balance sheets.

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Note 9. Stock-Based Compensation

Shares of common stock reserved for issuance under the Company’s equity incentive plans at March 31, 2026 were as follows:


	March 31, 2026
Outstanding stock awards		16,930,068
Reserved for future award grants		6,477,049
Reserved for future ESPP		618,646
Total common stock reserved for stock awards		24,025,763

Service-Based Stock Option Activity

A summary of the Company’s service-based stock option activity (excluding performance-based stock option activity, which is presented separately below) for the three months ended March 31, 2026 is as follows:


	Outstanding Service-Based Options
(in thousands, except share and per share data)	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance—December 31, 2025		12,521,560		$	4.73		7.71	$	51,539
Options granted		3,239,752			6.74
Options exercised		(85,203	)		3.29
Options forfeited or expired		(34,307	)		9.11
Balance—March 31, 2026		15,641,802		$	5.14		7.99	$	33,923
Options vested and exercisable as of March 31, 2026		7,490,122		$	5.19		6.61	$	21,830

Options granted to new hires generally vest over a four-year period, with 25% vesting at the end of one year and the remaining vesting monthly thereafter. Options granted as merit awards generally vest monthly over a three- or four-year period.

The aggregate intrinsic value of unexercised stock options is calculated as the difference between the closing price of the Company’s common stock of $6.37 on March 31, 2026 and the exercise prices of the underlying stock options. Out-of-the money stock options are excluded from aggregate intrinsic value.

The weighted-average grant date fair value of options granted was $5.29 and $2.65 per share for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, the total intrinsic value of options exercised was $0.4 million and $0.1 million, respectively. As of March 31, 2026, the unrecognized stock-based compensation cost of unvested options was $29.2 million, which is expected to be recognized over a weighted-average period of 2.4 years.

Valuation of Service-Based Stock Options

The Company estimated the fair value of service-based stock options using the Black-Scholes option-pricing model. Fair value of stock options is recognized as compensation expense on a straight-line basis over the requisite service periods of the awards. Fair value of stock options was estimated using the following range of assumptions:


	Three Months Ended March 31,
	2026	2025
Expected term (in years)	5.77 - 6.08	5.77 - 6.08
Volatility	97.01 - 97.83%	83.72 - 84.08%
Risk-free interest rate	3.71 - 3.97%	4.15 - 4.50%
Dividend yield	–%	–%

Performance-Based Stock Option Activity

During 2024, the Company granted performance-based stock options ("PSOs") to the executive leadership team. The PSOs were eligible to vest upon attainment of certain Medicare reimbursement coverages (as certified by the Compensation Committee) by the end of 2025 and subject to continuous service by the executives. Fair value was estimated using the Black-Scholes option-pricing model. Total grant-date fair value of the PSOs was $0.3 million. As of December 31, 2025, not all the Medicare reimbursement coverages were obtained and the Company canceled a portion of the PSOs. Accordingly, the Company reversed previously recognized stock-based compensation expense associated with the performance conditions that were not met. As of March 31, 2026, the recognized stock-based compensation cost related to vested PSOs was immaterial.

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A summary of the Company's performance-based stock option activity for the three months ended March 31, 2026 is as follows:


	Outstanding Performance-Based Options
(in thousands, except share and per share data)	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance—December 31, 2025		90,499	$	1.61		8.20	$	575
Balance—March 31, 2026		90,499	$	1.61		7.96	$	431
Options vested and exercisable as of March 31, 2026		90,499	$	1.61		7.96	$	431

Restricted Stock Units ("RSU") Activity and Valuation

A summary of the Company’s RSU activity for the three months ended March 31, 2026 is as follows:


	Unvested Service-Based Restricted Stock Units
(in thousands, except share and per share data)	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Fair Value
Balance—December 31, 2025		131,257		$	3.63	$	1,045
RSUs granted		495,651			6.72
RSUs vested		(3,455	)		10.10		27
RSUs forfeited		(686	)		5.31
Balance—March 31, 2026		622,767		$	6.05	$	3,967

The Company grants RSUs to employees to receive shares of the Company’s common stock. The RSUs awarded are subject to the individual’s continued service to the Company through each applicable vesting date. RSUs granted to new hires generally vest annually over a four-year period. RSUs granted as merit awards generally vest semi-annually over a three- or four-year period. The Company accounts for the fair value of RSUs using the closing market price of the Company’s common stock on the date of grant.

The aggregate fair value of unvested RSUs is calculated using the closing price of the Company’s common stock of $6.37 on March 31, 2026. During the three months ended March 31, 2026 and 2025, the total fair value of shares vested was immaterial and $0.4 million, respectively. As of March 31, 2026, the unrecognized stock-based compensation cost of unvested RSUs was $3.5 million, which is expected to be recognized over a weighted-average period of 2.5 years.

The Company’s default tax withholding method for RSUs is the sell-to-cover method, in which shares with a market value equivalent to the tax withholding obligation are sold on behalf of the holder of the RSUs upon vesting and settlement to cover the tax withholding liability and the cash proceeds from such sales are remitted by the Company to taxing authorities.

Performance-Based RSU Activity

In March 2025, the Company granted performance-based RSUs ("PSUs") to the executive leadership team. A percentage of the number of RSUs will vest based upon achieving the Company's operational target as of the end of 2026, and subject to continuous service by the executives throughout March 2028. Fifty percent of the aggregate number of achieved PSUs (if any) will vest upon certification in March 2027, with the remaining fifty-percent vesting in March 2028. The total grant-date fair value of the PSUs was $2.1 million. As of December 31, 2025, the Company no longer considered the achievement of the operational target to be probable. Accordingly, the Company reversed previously recognized stock-based compensation expense and no stock-based compensation cost was recognized for the year ended December 31, 2025, and the three months ended March 31, 2026.

A summary of the Company's PSUs activity for the three months ended March 31, 2026 is as follows:


	Unvested Performance-Based Restricted Stock Units
(in thousands, except share and per share data)	Number of Shares		Weighted- Average Grant Date Fair Value		Aggregate Fair Value
Balance—December 31, 2025		575,000	$	3.63	$	4,577
Balance—March 31, 2026		575,000	$	3.63	$	3,663

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ESPP Activity and Valuation

During the three months ended March 31, 2026 and 2025, no shares of common stock were purchased under the Employee Stock Purchase Plan ("ESPP"). Additionally, no stock purchase rights were granted during either period.

Stock-Based Compensation Expense

The following is a summary of stock-based compensation expense by award type (in thousands):


	Three Months Ended March 31,
	2026		2025
Service-based stock options	$	2,153	$	1,221
Performance-based stock options		7		35
Service-based RSUs

Personalis, Inc. 10-Q