ADPT 10-K & 10-Q changes, risk factors and insider trading

our expected and potential reliance on biopharmaceutical collaborators for development and clinical testing of therapeutic productdrug candidates, which may fail at any time due to a number of possible unforeseen events;

We have incurred significant losses since our inception. For the year ended December 31, 2024,2025, 20232024 and 2022,2023, we incurred a net loss of $59.5 million, $159.6 million, $225.3 million and $200.4$225.3 million, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $1.3$1.4 billion. We have funded our operations to date principally from the sale of convertible preferred stock and common stock, including the sale of common stock in our initial public offering and follow-on offering, and, to a lesser extent, revenue as well asand transactions pursuant to the Purchase Agreement. We expect to continue to incur significant expenses and operating losses as we continue to invest in the development of products and services utilizing our immune medicine platform to support the validation of additional clinical therapeutic and diagnostic products and services. We will need to generate significant additional revenue to achieve and sustain profitability.

our ability to obtain positive coverage decisions for our tests from additional commercial payerspayors;

the timing of upfront payments from our customers and collaborators;

our ability and that of our collaborators to develop and successfully commercialize our products, including therapeuticdrug productscandidates;

availabilityavailability, extent and extentpricing of reimbursement by governmental and private payors for our products;

business interruptions such as laboratory disruptions, power outages, strikes, acts of terrorism or natural disasters; and our ability to use our net operating loss (“NOL”) carryforwards to offset future taxable income.

Our strategy is to leverage our immune medicine platform to discover, develop and potentially commercialize additional therapeutic and diagnostic products and services forto diagnose and treat various disease states. In particular, for clonoSEQ we are attempting to generate sufficient clinical evidence to support the utility of MRD in additional lymphoid cancers beyond ALL, MM, CLL, DLBCL and MCL while also demonstrating the clinical utility of blood as a sample type for all lymphoid cancers. If we are unable to generate compelling evidence supporting clonoSEQ use in other indications or sample types, we may not succeed in expanding our clonoSEQ product platform.

In our immune medicine business, our focus on immune-repertoire sequencing, target antigen discoverydiscovery, data licensing and developmentTCR-antigen ofprediction therapeutic products, including antibodies and cellular therapies,models faces significant challenges in the identification, validation, development, clinical testingdevelopment and marketing approvaladoption of newproducts products.and services. If we or our collaborators are unable to discover novel targets for our collaborators or demonstrate the value in our datasets and develop transformative immune-based therapies,models, we may not succeed in developing, offering and commercializing new therapeuticproducts products.and services and growing our immune medicine business.

We are seeking to leverage our immune medicine platform to develop a pipeline of future disease-specific research, therapeuticresearch and diagnostic products. For example, we continually expand our immunomics database and TCR-antigen binding with a view toward advancing target antigen discovery to leverage in developing therapies such as prophylactic or therapeutic antibodies. In addition, we are developing certain therapeutic product candidates underenable our collaboration agreement with Genentech by leveraging our platformcollaborators to identifydevelop TCRs that can be engineered into personalized cellular therapeutic products.therapeutics.

Developing new products is a speculative and risky endeavor. Products or services that initially show promise may fail to achieve the desired results or may not achieve acceptable levels of analytical accuracy or clinical utility. We may need to alter our products in development and repeat clinical studies before we identify a potentially successful product or service. Therapeutic product development is expensive, may take years to complete and can have uncertain outcomes. Failure can occur at any stage of the development. If, after development, a product or service appears successful, we or our collaborators (if any) may, depending on the nature of the product or service, still need to obtain FDA and other regulatory clearances, authorizations or approvals before we can market it. The clearance, authorization or approval pathways at the FDA and other regulatory authorities are likely to involve significant time, as well as additional research, development and clinical study expenditures. The FDA or other regulatory authorities may not clear, authorize or approve any future product we develop. Even if we develop a product that receives regulatory clearance, authorization or approval, we or our collaborators would need to commit substantial resources to commercialize, sell and market it before it could be profitable, and the product may never be commercially successful. Additionally, development of any product may be disrupted or made less viable by the development of competing products.

For example, we have purchased and rely on the Illumina NextSeq System and plan to rely in the future on the NovaSeq X system.Plus System. Illumina supplies us with reagents that have been designed for use solely with thisthese sequencersequencers and Illumina is the sole provider of maintenance and repair services for the Illumina NextSeq System and the NovaSeq X Plus System. We also license our laboratory information management software from Illumina and receive services from Illumina related to that software. In addition, Illumina is not obligated to meet all of our requirements for reagent supply. In the event Illumina ceases or slows its production of, or is otherwise unwilling or unable to continue to supply the sequencer reagents necessary for and currently used in our business at or near current pricing, we may be required to purchase different reagents from Illumina or to purchase from a different reagent vendor under terms and conditions which could be less favorable to us. Any disruption in Illumina’s operations or the suppliers of our reagents, materials or other equipment could impact our ability to do business.

In addition, our development laboratory operations could result in any number of errors or defects. Our quality assurance system or product development processes may fail to prevent us from inadvertent problems with samples, sample quality, lab processes including sequencing, software, data upload or analysis, raw materials, reagent manufacturing, assay quality or design, or other components or processes. In addition, our assays may have quality or design errors, and we may have inadequate procedures or instrumentation to process samples, assemble our proprietary primer mixes and commercial materials, upload and analyze data, or otherwise conduct our development laboratory operations. If we provide products or services with undiscovered errors to our customers, our clinical diagnostics may falsely indicate a patient has a disease or fail to detect disease in a patient who requires treatment. We believe our customers are likely to be particularly sensitive to product and service defects, errors and delays, including if our products and services fail to indicate the presence of residual disease with high accuracy from clinical specimens or if we fail to list or inaccurately indicate the presence or absence of disease in our test report. In drug discovery, suchSuch errors may interfere with our collaborators’ clinical studies or result in adverse safety or efficacy profiles for their products in development. This may harm our customers’ businesses and may cause us to incur significant costs, divert the attention of key personnel, encourage regulatory enforcement action against us, create a significant customer relations problem for us and cause our reputation to suffer. We may also be subject to liability claims for damages related to errors or defects in our products. Any of these developments could harm our business and operating results.

Our efforts to develop products leveraging our TCR-antigen binding data may not be successful, and it may not yield the insights that we expect or on a timetable that allows development or commercialization of new therapeuticproducts or diagnostic products.services.

We are using our immunosequencing capabilities, proprietary computational analyses and machine learning models to map and computationally predict at scale binding of TCR sequences to disease antigens, which we believe has multiple high-value therapeutic applications and is relevant to our drug discovery work. However, we may not be successful in developing a sufficiently comprehensive data set or the performance of our ‘digital’ TCR-antigen prediction models may be insufficient for any number of reasons, which may include difficulty in validating signals and challenges in making progress toward algorithmic-based methods that accurately define TCR-antigen signatures of disease. In addition, we may not succeed in accelerating the development of a ‘digital’ TCR-antigen binding prediction model that will allow us to pursue multiple high-value therapeutic applications and achieve our business goals in a timetable that is commercially viable for our products or our collaborators’ products, or at all. As we continue to grow our immunomics database and advance our prediction modeling activities, we may be unable to translate these efforts into commercialization opportunities. Moreover, as our collaboration activities under the Microsoft Agreement arehave winding down,concluded, we may be less successful in pursuing these opportunities.opportunities in the future.

If the performance of our computational and machine learning modeling efforts do not meet our expectations or our needs to accurately validate TCR to antigen associations in a reasonable timeframe, our business model may not be commercially viable. Even if we accelerate our efforts, products derived from our platform technologies may have product specific limitations. If we are unable to make meaningful progress in leveraging our prediction models to successfully develop and in the future commercialize new therapeutic products, diagnostic products or services, our business results will be negatively impacted.

We have limited resources to conduct our operations in both the MRD business and IM business areas, and have not yet fully established infrastructure for sales, marketing or distribution in connection with all of our current or future potential products. We have entered into collaboration agreements under which our collaborators have provided, and may in the future provide, funding and other resources for developing and potentially commercializing our products and services. For example, we recently entered into two non-exclusive immune receptor data agreements with Pfizer, pursuant to which we will use our immune medicine platform and T-cell biology capabilities to identify disease-causing TCRs as potential therapeutic targets in RA, and Pfizer has sole control over clinical development and commercialization of any products developed under the agreements.

We are pursuing potential drug discovery and development opportunities with pharmaceutical companies to develop and commercialize therapeutic products that leverage our immune medicine platform, including TCR-based and antibody-based therapeutic modalities, among others.platform. We may not succeed in discovering targets or advancing therapeutic product candidates in these collaborations and our collaborators may not succeed in developing and commercializing suchtherapeutic products,product candidates, which may cause us not to realize the expected monetary benefits of the collaborations.

Trial Design regulatory authorities or ethical review boards, including IRBs,institutional review boards (“IRBs”), may not authorize commencement of a clinical trial or conduct a clinical trial at a prospective trial site;

Testing clinical trials may fail to satisfy the applicable regulatory requirements of the FDA or other regulatory authorities responsible for oversight of the conduct of clinical trials in other countries;

As of December 31, 2024,2025, we had 619624 full-time employees, and we reduced our workforce last year as part of restructuring plans. See Note 15, Restructurings.employees. If demand for our products and services increases in the future, we may need to expand our workforce, commercial infrastructure and laboratory operations to support demand for our products. If we are unable to support fluctuations in the demand for our products and services, including ensuring that we have adequate capacity to meet potential increased demand as well as other customer requirements (such as turnaround time and service level), our business could suffer. Consequently, we may be required to increase the number of employees, including potential contingent employees as needed, to address demand fluctuations. As we and our collaborators commercialize additional products and services, we may need to incorporate new equipment, implement new technology systems and laboratory processes and hire new personnel with different qualifications. Failure to manage this growth or transition could result in turnaround time delays, higher service costs, declining service quality, deteriorating customer service and slower responses to competitive challenges. A failure in any one of these areas could make it difficult for us to meet market expectations for our products and services and could damage our reputation and the prospects for our business.

Our success depends on the market’s confidence that we can provide immune-driven research, therapeuticresearch and diagnostic products and services that improve clinical outcomes, lower healthcare costs and enable better biopharmaceutical development. Failure of our products and services, or those jointly developed with our collaborators, to perform as expected could significantly impair our operating results and our reputation. We believe patients, clinicians, academic institutions and biopharmaceutical companies are likely to be particularly sensitive to defects, errors, inaccuracies, delays and toxicities in or associated with our products and services. Furthermore, inadequate performance of these products or services may result in lower confidence in our immune medicine platform in general.

We could be adversely affected if we do not develop our drug discovery and clinical diagnostic products, obtain required regulatory and other clearances, authorizations or approvals, obtain or enforce patents covering our discoveries and launch our products before our competitors. Moreover, our competitors may succeed in developing clinical diagnostics and therapies that circumvent our intellectual property rights. Our competitors may succeed in developing and commercializing therapies or diagnostic products that are more accurate, more convenient to use or more cost-effective than our products or could prove to be safer, more effective, more convenient to administer or more cost-effective than any therapeutic products we may develop with our collaborators or that would render our products less competitive or obsolete. We expect competition to intensify in the fields in which we are involved as technical advances in these fields occur and become more widely known. For additional information regarding our competition, see the “Business—Competition” section of this Annual Report on Form 10-K.

We have licensedcompleted a technology transfer process for research use and in some cases clinical use of our technologyclonoSEQ assay to certain international sites including but not limited to sites in France, Germany, Italy, the United Kingdom, Spain, andAustralia, Australia for research use only of our clonoSEQ assayJapan and in some cases, for clinical use of clonoSEQ.Israel. In August 2024, clonoSEQ received IVDR certification in the EU, but our collaborators are only beginning to use clonoSEQ as an IVDR-compliant test in local EU clinical trials. We do not know how long we will be able to retain IVDR certificationcertification, including if regulatory requirements change or necessitate additional validations or approvals. Additionally, aside from this achievement, we have limited experience in obtaining regulatory clearance, authorization or approval in international markets. If we or our collaborators fail to comply with regulatory requirements in international markets or to obtain and maintain required regulatory clearances, authorizations or approvals in international markets, or if those approvals are delayed, our target market will be reduced and our ability to realize the full market potential of our products and services will be unrealized.

increase our sales and marketing efforts to drive market adoption of our life sciences research, immune medicine platform and clinical diagnostics and therapeutics;

Our results of operations could be adversely affected by general conditions in the global economy and financial markets. Changes in these economic conditions can arise suddenly, such as in the case of recent inflation fluctuations. A severe or prolonged economic downturn, as result of a global pandemic or otherwise, could result in a variety of risks to our business, including weakened demand for our products and services and our ability to raise additional capital when needed on favorable terms, if at all. A weak or declining economy could also strain our collaborators, possibly resulting in supply disruption, or cause delays in their payments to us. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

The marketing, sale and use of our products and services could lead to the filing of product or professional liability claims were someone to allege that our products or services failed to perform as designed or intended. We could also be potentially exposed to claims relating to therapeutic failures of products developed and commercialized underby our collaborations, such as a cellular therapy marketed by Genentech that is manufactured based on TCR-related sequences and data we provide.collaborators. We may also be subject to liability for errors in, a misunderstanding of or inappropriate reliance upon, the information we provide in the ordinary course of our business activities. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend. Regardless of merit or eventual outcome, product liability and professional liability claims may result in:

The use of artificial intelligence (“AI”) and machine learning is increasingly being embedded in standard business processes, including in the life sciences and healthcare industries. While we do notWe use AI orand machine learning as an element of any product or service, we do use them to assist in a range of otherbusiness contexts, such as to enhance our operations, technology, prediction models, and internal workflows. We also anticipate AI to be adopted more broadly throughout our organization to manage operational efficiencies, particularly as the technology evolves and improves. However, the use of AI and machine learning presents risks and challenges that could impact our business.business, including as a result of changing regulations and laws. For example, the improper use of data (including personal information, PHI or confidential information) to train AI algorithms could result in violations of our privacy and confidentiality obligations, jeopardize our intellectual property rights, or put us at risk of violating applicable laws and regulations. Furthermore, AI models may be poorly trained or compromised. This could create output from AI tools that might be flawed without appropriate human oversight, resulting in biased data, misinformation or disinformation or the introduction of cybersecurity threats such as malware. AI practices and machine learning tools used by our commercial partners could present similar risks, and any of these outcomes could have a material adverse effect on our business, results of operations, or financial condition.

The insurance coverage and reimbursement status of newly approved products, in a new category of diagnostics and therapeutics,diagnostics, is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for current or future products could limit our ability, and that of our collaborators, to fully commercialize our products and decrease our ability to generate revenue.

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford the clinical diagnostic tests and therapeuticsdrug candidates that we and our collaborators plan to develop and sell. In addition, because our clinical diagnostics and some of our potential therapeutic products will represent new approaches to the research, diagnosis, detection and treatment of diseases, we cannot accurately estimate how our products and services, and those jointly created with our collaborators, would be priced, whether reimbursement could be obtained or any potential revenue generated. Sales of our products will depend substantially, both domestically and internationally, on the extent to which the costs of our products and services are paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize some of our products or services. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment in any of our products or services. If we adopt a self-pay strategy with respect to any products or services, we may experience similar difficulties in the establishment or maintenance of sufficiently high pricing. Changes in the reimbursement landscape may occur, which are outside of our control, and may impact the commercial viability of our products and services.

Moreover, increasing efforts by governmental and third-party payors, in the U.S. and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for newly cleared, authorized or approved devices and medicines and, as a result, they may not cover or provide adequate payment for our clinical diagnostics or the cellular therapies to be sold by us or our collaborators. For example, the U.S. government introduced the Lower Drug Costs Now Act of 2019 to reduce the cost of drugs. This blueprint contains certain measures that HHS is already working to implement. In addition, the No Surprises Act (“NSA”) took effect in January 2022. One of the goals of the NSA is intended to protect patients from “surprise” medical bills resulting from gaps in coverage for services provided by out-of-network providers, such as laboratories, related to patient visits at in-network facilities. The NSA limits the amount out-of-network laboratories may charge a patient for laboratory services ordered during an in-network facility visit and establishes an independent dispute resolution process for determining the amount of reimbursement for the laboratory service in the event that the laboratory and insurer cannot agree on a rate. Moreover, PAMA changed the payment methodology for clinical diagnostic laboratory tests under the CLFS to use the weighted median of private payor rates, as reported by certain laboratories that receive a majority of their Medicare revenue from the CLFS and PFS. To the extent the NSA or PAMA limits the price chargedpayment for our diagnostic products or cellular therapeutics,products, the commercial viability of those products may be adversely affected.

We expect to experience pricing pressures on our clinical diagnostics and cellular therapies sold by us and our collaborators due to the trend toward value-based pricing and coverage, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

Products and services offered on an RUO basis may be subject to regulatory scrutiny.

Under Medicare Part B, payment for most diagnostic laboratory tests is made under the Clinical Laboratory Fee Schedule (“CLFS”),CLFS, which assigns payment amounts to tests based on billing codes. Under thePAMA, Protecting Access to Medicare Act of 2014 (“PAMA”), certainCLIA-certified laboratories that receive the majority of their Medicare revenue from payments made under the CLFS or Medicare’sPFS Physicianand Feethat Schedulehave CLFS revenue more than $12,500 in the relevant period (“applicable laboratories”) are required to report to CMS every three years, or annually for “advanced diagnostic laboratory tests,” commercial payor payment rates and volumes for tests they perform and that are assigned specific billing codes.codes in the reporting period (“applicable information”). PAMA has special provisions relating to “advanced diagnostic laboratory tests,” as defined by the statute, and these provisions affect the rate-setting at the time of launch and the periodicity of rate reporting and revision. Laboratories that fail to report the required payment information may be subject to substantial civil monetary penalties. If,If inwe meet the future,requirements clonoSEQfor oran anyapplicable oflaboratory ourwith testsapplicable areinformation assignedto report for a specificparticular codetest, then we would be required to report commercial payor payment data on those tests. Payments for teststhat billed under miscellaneous codes are determined by the MACs, which also have discretion to change those payment rates.test.

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes and the other financial information appearing elsewhere in this Annual Report on Form 10-K, as well as the other financial information we file with the Securities and Exchange Commission (“SEC”) from time to time. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties relating to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 may be found in Part II, Item 7 under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 20232024 filed with the SEC on FebruaryMarch 29,3, 2024.2025.

Our current product and service offerings in MRD related to the MRD market are our clonoSEQ clinical diagnostic test, offered to clinicians, and our clonoSEQ or MRD assay, offered to biopharmaceutical partners to advance drug development efforts. Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the FDA for the detection and monitoring of MRD in patients with MM, B cell ALL and CLL, and is also available as a CLIA-validated laboratory developed test for patients with other lymphoid cancers, including DLBCL and MCL. In the fourth quarter of 2024, we obtained Medicare coverage for MCL and initiated promotional efforts in MCL. We also recently obtained a new Medicare CLFS rate of $2,007 per test for clonoSEQ and MolDX updated the clonoSEQ episode pricing to $8,029 for all covered indications. This represents a 17% increase from the previous episode price and the previous implied per test rate under the episode structure. In April 2025, Palmetto GBA expanded coverage of clonoSEQ to include single time point testing to monitor for recurrence in patients with a history of MCL. This expanded coverage is in addition to the existing Medicare episode payment structure for clonoSEQ. With the use of clonoSEQ, we are transforming how lymphoid cancers are treated by working with providers, pharmaceutical partners and payors. In an effort to enable easier test ordering, we have workedintegrated to integrate theour clonoSEQ clinical diagnostic test viainto electronic medical record systems, including Epic's comprehensiveAura EMRand systemFlatiron's into the records systemsOncoEMR, of numerous accounts, and continue to make more progress.accounts.

Immune Medicine leverages our proprietary ability to sequence, map, pair and characterize TCRs and BCRs at scale to drive opportunities in cancer and autoimmune disorders. Our immunosequencingcapabilities technology,enable whichus includesto offer an expanding suite of solutions including: immune receptor sequencing, licensing of our Adaptiveproprietary Immunosequencingdata, researchTCR-antigen product,prediction serves as the researchmodels and development engine driving our immunetarget medicinediscovery platform and generates revenue from biopharmaceutical and academic customers.capabilities. We are applying AI and machine learning models to map at scale TCR sequences to the diseases they bind to enable ourcommercial drugofferings discovery efforts. Also inand our drugown discoveryproduct programs,research we use our proprietary capabilities to discover new drug targets and leverage our validated TCR and BCR discovery approaches to discover and develop TCR or antibody therapeutic assets. Our drug discovery efforts include the Genentech Agreement under which we support Genentech in the development of cancer antigen-directed TCR-based cancer cell therapies for the treatment of patients with solid tumors.initiatives.

We recognized revenue of $179.0$277.0 million and $170.3$179.0 million for the year ended December 31, 20242025 and 2023,2024, respectively. Net loss attributable to Adaptive Biotechnologies Corporation was $159.5$59.5 million and $225.3$159.5 million for the year ended December 31, 20242025 and 2023,2024, respectively. We have funded our operations to date principally from the sale of convertible preferred stock and common stock, including the sale of common stock in our initial public offering and follow-on offering, and, to a lesser extent, revenue and the proceeds received from the Purchase Agreement. As of December 31, 20242025 and 2023,2024, we had cash, cash equivalents and marketable securities of $256.0$240.2 million and $346.4$256.0 million, respectively. These balances include $13.1 million and $0.3 million of cash held by Digital Biotechnologies, Inc., respectively.

We derive revenue by providing diagnostic and research services in our MRD and Immune Medicine business areas. Our MRD revenue consists of revenue generated from (1) providing our clonoSEQ report to clinical customers; (2) providing MRD sample testing services to biopharmaceutical customers and certain academic institutions, including investigator-led clinical trials; and (3) providing our clonoSEQ report or results to certain international laboratory sites through technology transfers. We disclose our clonoSEQ test volume, which includes the number of clonoSEQ reports and results we have provided to ordering physicians in the U.S. and international technology transfer sites. These volumes do not include sample results from our biopharmaceutical customers or academic institutions utilizing our MRD services. Our Immune Medicine revenue consists of revenue generated from (1) providing sample testing services for our commercial research product, Adaptive Immunosequencing, to biopharmaceutical customers and academic institutionsImmunosequencing; (2) ourdata collaboration agreements with Genentech and other biopharmaceutical customers in areas of druglicensing and target discovery services; and (3) for years prior to 2023, providing our T-Detectformer COVIDcollaboration testswith toGenentech clinicalunder customers.the Genentech Agreement.

For our clonoSEQ coverage under Medicare, we bill an episode of treatment when we deliver the first eligible test report. This billing contemplates all necessary tests required during a patient’s treatment cycle, which is currently estimated at approximately four tests per patient, including the initial sequence identification test. Revenue recognition commences at the time the initial billable test report is delivered and is based upon cumulative tests delivered to date. Any unrecognized revenue from the initial billable test is recorded as deferred revenue and recognized either as we deliver our estimate of the remaining tests in a patient’s treatment cycle or when the likelihood becomes remote that a patient will receive additional testing. In certain cases, we continue to provide services and incur costs for patients who exceed our number of estimated tests.

Under certain agreements with our biopharmaceutical customers who seek access to our platform to support their therapeutic development activities, revenues are generated from research and development support services that we provide.provide or have developed. These agreements mayhave include substantialincluded non-refundable upfront payments, which we recognize over time as we perform the respective services.payments. Revenue recognized from these activities relateinclude primarilyrevenue torecognized from the former Genentech Agreement.Agreement and a data licensing agreement.

We expect our MRD revenue to increase in both the short term and long term as we continue to increase our MRD clinical testing volume through enhanced penetration in our existing covered patient populations, expand into new patient populations and optimize payor coverage. Our MRD revenue may fluctuate period to period due to the uncertain timing of receipt of our biopharmaceutical customer samples, which may cause uncertainty in the delivery of our products and services, the recognition of milestones related to regulatory approvals of our biopharmaceutical customers’ therapeutics and changes in estimates of our clinical revenue reimbursement rates.

We expect our Immune Medicine revenue to increasedecrease in the longshort term asgiven wethe ortermination ourof collaboratorsthe advanceGenentech therapies to commercialization.Agreement. Our Immune Medicine revenue may fluctuate from period to period due to the timing of expenses incurred, changes in estimates of total anticipated costs related to the Genentech Agreement and other events not within our control, including the recognition of milestones under the Genentech Agreement and the timing of receipt of customer samples from our biopharmaceutical customers.customers and the potential recognition of milestones under our target discovery agreement.

We expect cost of revenue to moderately increase in the short term and to increase in absolute dollars in the long term as we grow our sample testing volume, but the cost per sample to decrease over the long term due to the efficiencies we may gain as assay volume increases from improved utilization of our laboratory capacity, automation and other value engineering initiatives. If our sample volume throughput is reduced, cost of revenue as a percentage of total revenue may be adversely impacted due to fixed overhead costs.

Research and development expenses consist of laboratory materials costs, personnel-related expenses (including salaries, benefits and share-based compensation), equipment costs, allocated facility and information technology costs and contract service expenses. Research and development activities support further development and refinement of existing assays and products, discovery of new technologies and investments in our immune medicine platform. We also include in research and development expenses the costs associated with software development of applications to support future commercial opportunities, as well as development activities to support laboratory scaling and workflow. We are currently conducting research and development activities for several products and services and we typically use our laboratory materials, personnel, facilities, information technology and other development resources across multiple development programs. Additionally, certain of these research and development activities benefit more than one of our product opportunities. We have not historically tracked research and development expenses by specific product candidates.

The costs to support the Genentech Agreement arewere a component of our research and development expenses. Additionally, a component of our research and development expenses are costs supporting clinical and analytical validations to obtain regulatory approval for future clinical products and services. Some of these activities have generated and may in the future generate revenue.

We expect research and development expenses to moderately decrease in the short term and to decrease as a percentage of revenue in the long term, although the percentage may fluctuate from period to period due to the timing and extent of our development and commercialization efforts.

Impairment of long-lived assets expenses include our impairment charges for certain leased office and laboratory space, related long-lived assets (including leasehold improvements and laboratory equipment) and long-lived assets associated with our halted software enhancements. See Note 10, Leases and Note 15, Restructurings of the accompanying notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for details regarding our impairment assessments and considerations.

Statements of Operations Data and Other Financial and Operating Data The following table sets forth our statements of operations data and other financial and operating data for the periods presented (in thousands, except share and per share amounts):

The $42.8$66.8 million increase in MRD revenue was primarily due to a $26.3$52.0 million increase in revenue generated from providing clonoSEQ to clinical customers, a $12.5$7.0 million increase in revenue recognized upon the achievement of regulatory milestones by certain of our biopharmaceutical customers, and a $5.8$5.1 million increase in revenue generated from providing MRD sample testing services to biopharmaceutical customers.customers These increases were partially offset byand a $1.6$2.4 million decreaseincrease in revenue generated from providing MRD sample testing services to investigator-led clinical trials. Our clonoSEQ test volume increased by 35%39% to 105,587 tests delivered in the year ended December 31, 2025 from 76,105 tests delivered in the year ended December 31, 2024 from 56,496 tests delivered in the year ended December 31, 2023.2024.

The $34.1$31.2 million decreaseincrease in Immune Medicine revenue was primarily due to a $29.1$27.8 million decreaseincrease in revenue generated from the Genentech Agreement, whichdriven resultedlargely fromby decreasedthe collaborationtermination expensesof the Genentech Agreement and decreased revenue recognized from the $10.0resulting millionrecognition regulatoryof milestonecash achievedconsideration inreceived Maythat 2023,was previously classified as deferred revenue, and a $5.0$6.0 million increase in revenue generated from a licensing agreement, partially offset by a $2.6 million decrease in sample testing revenue generated from our biopharmaceutical and academic customers.

The $19.2$9.2 million decrease in research and development expenses was primarily attributable to ana $11.6$5.8 million decrease in personnel costscosts, a $3.5 million decrease in allocable facility expenses and a $4.4$3.1 million decrease in laboratory materials and allocated production laboratory expenses, which was driven primarily by decreased investments in drug discovery efforts, including collaboration efforts with Genentech, and decreased investments in TCR-antigen binding development activities, partially offset by an increase in investments related to the MRD business. There was also a $3.9 million decrease in depreciation and other expenses, inclusive of a $2.6 million decrease in costs related to collaboration studies primarily related to Immune Medicine, and a $0.8 million decrease in allocable facilities expenses.efforts. These decreases were partially offset by a $1.5$1.9 million increase in software and cloud services expenses and a $1.3 million increase in depreciation and other expenses.

The $3.8$9.8 million decreaseincrease in sales and marketing expenses was primarily attributable to a $4.1$6.7 million decreaseincrease in personnel costscosts, a $1.7 million increase in consulting costs, a $1.4 million increase in computer and software expenses, a $0.7 million increase in allocated facility and overhead expenses and a $2.0$0.6 million decrease in marketing expenses, which was largely driven by reduced clonoSEQ marketing activities, followed by reduced research and corporate marketing activities. There was also a $0.8 million decreaseincrease in travel and customer event related expenses. These decreasesincreases were partially offset by a $2.1$1.5 million increasedecrease in computermarketing expenses, driven largely by reduced clonoSEQ and softwarecorporate expensesmarketing and a $1.1 million increase in allocated facility and overhead expenses.activities.

The $11.1$0.1 million decrease in general and administrative expenses was primarily attributable to a $5.7$2.7 million decrease in personnel costs, a $3.0 million decrease in building, facility, overheadcosts and depreciation related expenses largely driven by office space transitions made to support laboratory consolidation activities, a $1.8 million decrease in legal fees, a $1.1 million decrease in insurancebuilding, costsfacility and adepreciation $0.9related million decrease in consultant costs.expenses. These decreases were partially offset by a $1.7 million increase in legal fees and a $1.7 million increase in third-party billing service fees.

The $18.2$7.2 million decrease in impairment of long-lived assets expenses was primarily dueattributable to a $25.4 million decrease inthe impairment costsof relatedcertain long-lived assets and our decision to us vacatingvacate certain leased space in Seattle, Washington in October 2023, which was partially offset byas a $7.2result million increase in impairment costs resulting fromof various restructuring activities implemented in 2024.

The $2.2$0.2 million decreaseincrease in interest expense was attributable to a change in our assumptions regarding the timeframe in which our Purchase Agreement will be fully repaid.

(1) Adjusted EBITDA is a non-GAAP financial measure. See “Adjusted EBITDA” below for an explanation of how it is calculated and used by management. Adjusted EBITDA related to our unallocated corporate category is included in the calculation of consolidated Adjusted EBITDA but not shown above in the breakout of segment Adjusted EBITDA.

The $47.6$56.4 million reductionimprovement in MRD Adjusted EBITDA deficit was primarily attributable to a $42.8$66.8 million increase in MRD revenuerevenue, andpartially aoffset reductionby an increase in operating expenses, excluding those identified as reconciling items between segment net loss and adjustedsegment Adjusted EBITDA. The primaryincrease driverin of thethese operating expense reductionexpenses relates primarily to generalsales and administrativemarketing activities.

The $11.9$34.7 million increaseimprovement in Immune Medicine Adjusted EBITDA deficit was primarily attributable to a $34.1$31.2 million reductionincrease in Immune Medicine revenue, which was partiallydriven offsetlargely by revenue generated due to the termination of the Genentech Agreement, and a reduction in operating expenses, excluding those identified as reconciling items between segment net loss and adjustedsegment Adjusted EBITDA. The primary driverdrivers of the operating expense reduction relatesrelate to cost of revenue and research and development activities.

We have incurred losses since inceptioninception, apart from the three month period ended September 30, 2025, and have incurred negative cash flows from operations since inception through the year ended December 31, 2018, and again in the years ended December 31, 2020 through December 31, 2024.2025. As of December 31, 2024,2025, we had an accumulated deficit of $1.3$1.4 billion.

We have funded our operations to date principally from the sale of convertible preferred stock and common stock, and, to a lesser extent, revenue and the proceeds received from the Purchase Agreement. Pursuant to the Purchase Agreement entered into in September 2022, we received net cash proceeds of $124.4 million, after deducting issuance costs. We are also entitled to receive up to $125.0 million in subsequent installments as follows: (i) $75.0 million upon our request occurring no later than September 12, 2025 and (ii) $50.0 million upon our request in connection with certain permitted acquisitions occurring no later than September 12, 2025, in each case subject to certain funding conditions. As of December 31, 2024,2025, we had cash, cash equivalents and marketable securities of $256.0$227.2 million.million, excluding $13.1 million of cash held by Digital Biotechnologies, Inc.

If our available cash, cash equivalents and marketable securities balances and anticipated cash flows are insufficient to satisfy our liquidity requirements, we may request an additional installment under the Purchase Agreement, seek to sell additional equity or convertible debt securities, enter into a credit facility or another form of third-party funding or seek other debt financing. The sale of equity and convertible debt securities may result in dilution to our shareholders and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations. This additional capital may not be available on reasonable terms, or at all.

We plan to utilize the existing cash, cash equivalents and marketable securities on hand primarily to fund our commercial and marketingassay activitiesdevelopment initiatives associated with clonoSEQ, our continued investments in streamlining our laboratory operations and our continued research and development initiatives related to drugmapping discovery.TCRs to antigens and the advancement of our target discovery capabilities. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity. Currently, our funds are held in money market funds and marketable securities consisting of U.S. government treasury and agency securities, corporate bonds and commercial paper.

While we may experience variability in revenue in the near term, over the long-term we expect revenue from our current and future products and services to grow. Accordingly, we expect our accounts receivable and inventory balances to increase. Our levels of accounts receivable may fluctuate relative to our revenue for a number of reasons, including the timing of milestone triggers and related payment of those milestones, as well as reductions in revenue derived from the upfront payment received under the Genentech Agreementmilestones and an increase in revenue generated from clinical customers, which may result in more billings in arrears as opposed to upfront payments. Any increase in accounts receivable and inventory may not be completely offset by increases in accounts payable and accrued expenses, which could result in greater working capital requirements.

Our contractual obligations as of December 31, 20242025 include operating lease obligations of $107.6$93.5 million, which reflects the minimum commitments for our office and laboratory spaces in Seattle, Washington and South San Francisco, California and our warehouse lease in Bothell, Washington. We also have an obligation to pay $1.4 million in non-cancellable undiscounted payments, exclusive of operating and maintenance costs, for a lease not yet commenced as of December 31, 2025. See Note 10, Leases of the accompanying notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information, including the timing of cash payments related to theseour lease obligations. In connection with certain of our lease agreements, we have $2.1 million in letters of credit with one of our financial institutions.

Additionally, pursuant to the Purchase Agreement, the Purchasers have a right to receive Revenue Interests from us based on the Applicable Payment Percentage of the Revenue Base. If only the First Payment has been made, theThe Applicable Payment Percentage shall be five percent of the quarterly Revenue Base. If both the First Payment and Second Payment have been made, the Applicable Payment Percentage shall be eight percent of the quarterly Revenue Base. If each of the First Payment, Second Payment and Third Payment have been made, the applicable payment percentage applied to the Revenue Interest shall be ten percent of the quarterly Revenue Base. Revenue Interest Payments shall be made quarterly within 45 days following the end of each fiscal quarter. If OrbiMed has not received Revenue Interest Payments in the aggregate equal to or greater than the Cumulative Purchaser PaymentsPayment on or prior to September 12, 2028, the revenue interest rate shall be increased to a rate which, if applied retroactively to our cumulative Revenue Base, would have resulted in Revenue Interest Payments equal to the sum of all Cumulative Purchaser Payments.Payment. OrbiMed will be entitled to 100% of the Revenue Interest Payments until it has received the Return Cap, unless full repayment of the amount of the Return Cap has not been made by September 12, 2032, in which case the Return Cap shall be increased to 175% of the Cumulative Purchaser Payments.Payment. As projected revenues change from our initial estimates, the amount of the obligation and timing of payment is likely to change. See Note 11, Revenue Interest Purchase Agreement of the accompanying notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.

Furthermore, in March 2025, we entered into a three-year, $17.5 million commitment for certain cloud services, of which $11.3 million remains as of December 31, 2025. We also have minimum commitments for laboratory material suppliers, which are generally fulfilled within one year, additional software and service license commitments, which are generally fulfilled within one to three years, and royalty commitments.

CashNet cash provided by investing activities duringwas $38.0 million as compared to $77.8 million for the year ended December 31, 20242025 wasand $77.82024, million,respectively. whichThe decrease in net cash provided by investing activities was primarily attributabledue to a decrease in proceeds from maturities of marketable securities of $325.7 million,securities, partially offset by a reduction in purchases of marketable securities of $244.3 million and purchases of property and equipment of $3.7 million.equipment.

We have prepared the consolidated financial statements in accordance with GAAP. Our preparation of these consolidated financial statements requires us to make certain estimates, assumptionsjudgments and judgmentsassumptions that affect the reported amounts of assets,assets and liabilities and the related disclosures at the date of the consolidated financial statements, as well as revenuethe reported amounts of revenues and expenseexpenses recorded during the reportingperiods periods.presented. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas, including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, imputing interest for the Purchase Agreement, the provision for income taxes, including related reserves, the analysis of goodwill impairment and the recoverability and impairment of long-lived assets, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates.

Our revenue arrangements may include upfront payments for the performance of services in the future, which have both fixed and variable consideration. Non-refundable upfront fees and funding for related research and development services are generally considered fixed consideration, while milestone payments are identified as variable consideration.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in AccountingASC Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers.606. For our biopharmaceutical customers, our performance obligations may include sequencing services and services associated with regulatory submission and approval processes. Significant management judgment is applied to determine (1) the measurement of the transaction price, including the constraint on variable consideration,consideration; (2) the allocation of the transaction price to the performance obligations; and (3) the appropriate input- or output-based method to recognize revenue and the extent of progress to date.

To select the measure of progress, we consider the expectations of the performance period which may be based on customer-dependent estimates of samples or internal estimates of the performance period based on both the customer and our expected development timeframes. For our former collaboration with Genentech, we estimateestimated the extent of progress using a proportional performance model that usesused an input method based on costs incurred relative to the total estimated costs of research and development efforts to pursue both the Shared Products and Personalized Product pathways. These estimates arewere based on our internal estimates and development timeframes, which arewere subject to revision based on the potential outcomes for both product pathways, decisions made by Genentech, regulatory feedback or other factors not currently known.then-known. We regularly reviewreviewed our expectations of the extent of progress, including whether any variable consideration iswas no longer constrained, and, if any changes in estimates arewere made, we recognizerecognized revenue using the cumulative catch-up method.

Investing in our common stock involves a high degree of risk. We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this report, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I, Item 1A under the caption “Risk Factors” in our Annual Report filed with the SEC on February 26, 2026. The risk factors may be important to understanding other statements in this report and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in this report. The occurrence of any single risk or any combination of risks could materially and adversely affect our business, operations, product pipeline, operating results, financial condition or liquidity, and consequently, the value of our securities. Further, additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business, financial condition, operating results and prospects. ThereOther than the risk factors set forth below, there have been no material changes to the risk factors described in our Annual Report filed with the SEC on February 26, 2026.

Our current product and service offerings in MRD related to the MRD market are our clonoSEQ clinical diagnostic test, offered to clinicians, and our clonoSEQ or MRD assay, offered to biopharmaceutical partners to advance drug development efforts. Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration for the detection and monitoring of MRD in patients with multiple myeloma, B cell acute lymphoblastic leukemia and chronic lymphocytic leukemia, and is also available as a CLIA-validated laboratory developed test for patients with other lymphoid cancers, including diffuse large B cell lymphoma and mantle cell lymphoma (“MCL”). In the fourth quarter of 2024, we obtained Medicare coverage for MCL and initiated promotional efforts in MCL. We also obtained a new Medicare Clinical Laboratory Fee Schedule rate of $2,007 per test for clonoSEQ and MolDX separately updated the clonoSEQ episode pricing to $8,029 for all covered indications. This represented a 17% increase from the previous episode price. In April 2025, Palmetto GBA expanded coverage of clonoSEQ to include single time point testing to monitor for recurrence in patients with a history of MCL. This expanded coverage is in addition to the existing Medicare episode payment structure for clonoSEQ. With the use of clonoSEQ, we are transforming how lymphoid cancers are treated by working with providers, pharmaceutical partners and payors. In an effort to enable easier test ordering, we have integrated our clonoSEQ test into electronic medical record systems, including Epic SystemSystems Corporation’s Aura and Flatiron Health, Inc.’s OncoEMR®, of numerous accounts.

Immune Medicine leverages our proprietary ability to sequence, map, pair and characterize TCRs and B cell receptors at scale to drive opportunities in cancer and autoimmune disorders. Our capabilities enable us to offer an expanding suite of solutions including: immune receptor sequencing, licensing of our proprietary data, TCR-antigen prediction models and our target discovery capabilities. We are applying artificial intelligence and machine learning models to map at scale TCR sequences to the diseases they bind to enable commercial offerings and our own product research initiatives.

We recognized revenue of $70.9$71.6 million and $52.4$58.9 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $142.4 million and $111.3 million for the six months ended June 30, 2026 and 2025, respectively. Net loss attributable to Adaptive Biotechnologies Corporation was $20.0$39.8 million and $29.9$25.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $59.8 million and $55.5 million for the six months ended June 30, 2026 and 2025, respectively. We have funded our operations to date principally from the sale of convertible preferred stock and common stock, including the sale of common stock in our initial public offering and follow-on offering, revenue and therevenue, proceeds received from the revenue interest purchase agreement we entered into in September 2022 (the “Purchase Agreement”) and proceeds received from the June 2026 issuance of 0% convertible senior notes due 2031 (the “Notes”). As of MarchJune 31,30, 2026 and December 31, 2025, we had cash, cash equivalents and marketable securities of $237.2$371.7 million and $240.2 million, respectively. These balances include $15.3$15.1 million and $13.1 million of cash and cash equivalents held by Digital Biotechnologies, Inc., respectively.

We derive revenue by providing diagnostic and research services in our MRD and Immune Medicine business areas. Our MRD revenue consists of revenue generated from (1) providing our clonoSEQ report to clinical customers; (2) providing MRD sample testing services to biopharmaceutical customers and certain academic institutions, including investigator-led clinical trials; and (3) providing our clonoSEQ report or results to certain international laboratory sites through technology transfers. We disclose our clonoSEQ test volume, which includes the number of clonoSEQ reports and results we have provided to ordering physicians in the United States (“U.S.”) and international technology transfer sites. These volumes do not include sample results from our biopharmaceutical customers or academic institutions utilizing our MRD services. Our Immune Medicine revenue consists of revenue generated from (1) providing sample testing services for our commercial research product, Adaptive Immunosequencing; (2) data licensing and target discovery services; and (3) for periods prior to October 1, 2025, our former collaboration with Genentech, Inc. (“Genentech”) under the worldwide collaboration and license agreement with Genentech (the “Genentech Agreement”).

We expect our Immune Medicine revenue to increasedecrease in the short term.term Ouras we wind down Adaptive Immunosequencing services over the second half of 2026 and focus on target discovery business development efforts. Following the wind down of Adaptive Immunosequencing services, our Immune Medicine revenue may fluctuate from period to period due to the timing of receipt of customer samples from our biopharmaceutical customers and the potential recognition of milestones under our target discovery agreement.agreement and any future licensing agreements.

We expect general and administrative expenses to moderately decreaseincrease in the short term and to decrease as a percentage of revenue in the long term.

Interest expense includes costs associated with our now settled revenue interest liability related toand the Purchase Agreement and noncash interest costs associated with the full amortization of deferred issuance costs related to the Purchase Agreement, as well as the amortization of deferred costs related to issuance of the related deferred issuance costs.Notes. We impute interest expense using the effective interest rate method. We calculate an effective interest rate which will amortize our related obligation to zero over the anticipated repayment period. A significant increase or decrease in or changes in timing of forecasted revenue will prospectively impact our interest expense.

(1) Adjusted EBITDA is a non-GAAP financial measure that we define as net loss attributable to Adaptive Biotechnologies Corporation adjusted for interest and other income, net, interest expense, income tax (expense) benefit, depreciation and amortization expense, impairment costs for long-lived assets, restructuring expense andexpense, share-based compensation expense.expense and revenue interest liability extinguishment loss. See “Adjusted EBITDA” below for a reconciliation between Adjusted EBITDA and net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, and a discussion about the limitations of Adjusted EBITDA.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

The $23.4$16.2 million increase in MRD revenue was primarily due to a $15.8$17.0 million increase in revenue generated from providing clonoSEQ to clinical customers, a $4.5 million increase in revenue recognized upon the achievement of regulatory milestones by certain of our biopharmaceutical customers and a $3.5$4.5 million increase in revenue generated from providing MRD sample testing services to biopharmaceutical customers,customers. These increases were partially offset by a $0.6$5.5 million decrease in revenue generatedrecognized fromupon providingthe MRDachievement sampleof testingregulatory servicesmilestones toby investigator-ledour clinicalbiopharmaceutical trials.customers. Our clonoSEQ test volume increased by 41%43% to 32,59536,111 tests delivered in the three months ended MarchJune 31,30, 2026 from 23,11725,321 tests delivered in the three months ended MarchJune 31,30, 2025.

The $4.9$3.6 million decrease in Immune Medicine revenue was primarily due to a $3.6$3.9 million decrease in revenue generated from the Genentech Agreement, resulting from the termination of the Genentech Agreement in August 2025, andpartially offset by a $1.3$0.4 million decreaseincrease in sample testing revenue generated from our biopharmaceutical and academic customers.

The $1.7$2.2 million increase in cost of revenue was primarily attributable to a $0.9$1.1 million increase in labor and overhead costs and a $0.8 million increase in shipping and handling expenses and a $0.7 million increase in labor and overhead costs.expenses.

The $0.6$5.0 million decrease in research and development expenses was primarily attributable to a $1.0$2.2 million decrease in personnel costs, a $1.9 million decrease in depreciation and other expenses andexpenses, a $0.6$1.3 million decrease in laboratory materials and allocated production laboratory expenses, which was driven primarily by decreased investments in drug discovery and clonoSEQ efforts.efforts, and a $0.5 million decrease in allocable facility expenses. These decreases were partially offset by a $0.7$0.8 million increase in software and cloud services expenses and a $0.4 million increase in personnel costs.expenses.

The $3.3$2.8 million increase in sales and marketing expenses was primarily attributable to a $1.8$1.3 million increase in personnel costs, a $0.8$0.7 million increase in computer and software expenses, a $0.4 million increase in consulting costs and a $0.3 million increase in travel and customer event related expenses and a $0.5 million increase in computer and software expenses.

The $3.6$3.4 million increase in general and administrative expenses was primarily attributable to a $1.7$1.3 million increase in personnellegal costs,expenses, $0.8 million increase in third-party billing service fees, a $0.9$0.5 million increase in computer and software expenses and a $0.8$0.4 million increase in third-partypersonnel billing service fees.costs.

The $0.6$0.1 million decrease in interest and other income, net was primarily attributable to a nominal decrease in net interest income and investment amortization driven by decreased holdings of and interest rates pertaining to our cash, cash equivalents and marketable securities.amortization.

The nominal$0.3 million decrease in interest expense was primarily attributable to athe changeearly insettlement of our assumptionsrevenue regardinginterest liability under the timeframe in which our Purchase Agreement will be fully repaid.Agreement.

The $16.2$7.2 million improvement in MRD Adjusted EBITDA was primarily attributable to a $23.4$16.2 million increase in MRD revenue, partially offset by ana $9.0 million increase in operating expenses, excluding those identified as reconciling items between segment net incomenon-cash and segmentrestructuring net loss, respectively, and segment Adjusted EBITDA.expenses. The increase in these operating expenses relateswas primarily due to a $3.4 million increase in general and administrative expenses driven largely by increased legal expenses, third-party billing service fees and computer and software expenses, a $2.8 million increase in sales and marketing andexpenses generaldriven primarily by increased market access and administrativepersonnel activities.expenses and a $2.5 million increase in cost of revenue expenses driven largely by increased testing volumes.

The $5.3$0.5 million increase in Immune Medicine Adjusted EBITDA deficit was primarily attributable to a $4.9$3.6 million decrease in Immune Medicine revenue, resulting largely from the termination of the Genentech Agreement in August 2025.2025, partially offset by a $3.1 million decrease in operating expenses, excluding segment non-cash and restructuring expenses. The decrease in these operating expenses was primarily due to a decrease in research and development expenses driven largely by reduced personnel and laboratory materials costs.

Adjusted EBITDA is a non-GAAP financial measure that we define as net loss attributable to Adaptive Biotechnologies Corporation adjusted for interest and other income, net, interest expense, income tax (expense) benefit, depreciation and amortization expense, impairment costs for long-lived assets, restructuring expense andexpense, share-based compensation expense.expense and revenue interest liability extinguishment loss. We define our segment Adjusted EBITDA in the same way to the extent the net loss attributable to Adaptive Biotechnologies Corporation and adjustments are allocable to each segment. See Note 13,14, Segment Information of the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report for more information regarding segment Adjusted EBITDA.

Management uses Adjusted EBITDA, including segment Adjusted EBITDA, to evaluate the financial performance of our business and segments and to evaluate the effectiveness of our strategies. We present these figures because we believe itthey isare frequently used by analysts, investors and other interested parties to evaluate companies in our industry and itthey facilitatesfacilitate comparisons on a consistent basis across reporting periods. Further, we believe it is helpful in highlighting trends in our operating results because it excludes items that are not indicative of our core operating performance.

interest income and interest expense, which is an ongoing element of our costs to operate;

long-lived assets impairment costs; and the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations, such as our restructuring activities andactivities, reductions in workforce.workforce and our revenue interest liability extinguishment loss.

(1) Represents costs associated with our now settled revenue interest liability and the noncash interest costs associated with the full amortization of deferred issuance costs related to the Purchase Agreement, as well as the amortization of deferred costs related to issuance of the related deferred issuance costs.Notes. See Note 8,9, Revenue Interest Purchase Agreement and Note 8, Convertible Senior Notes and Capped Call Transactions of the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report for details on theinterest Purchase Agreement.expense.

We have incurred losses since inception, apart from the three month period ended September 30, 2025, and have incurred negative cash flows from operations since inception through MarchJune 31,30, 2026, with the exception of certain 2019 periods for which we had positive cash flows from operations. As of MarchJune 31,30, 2026, we had an accumulated deficit of $1.4 billion.

We have funded our operations to date principally from the sale of convertible preferred stock and common stock, revenue and therevenue, proceeds received from the Purchase Agreement.Agreement and proceeds received from the Notes offering. Pursuant to the Purchase Agreement entered into in September 2022, we received net cash proceeds of $124.4 million, after deducting issuance costs. In June 2026, we issued the Notes, whereby we received net cash proceeds of $128.0 million, after deducting issuance costs paid, costs to extinguish our revenue interest liability under the Purchase Agreement, fees paid for the capped call transactions and costs to repurchase 1,451,800 shares of our common stock. As of MarchJune 31,30, 2026, we had cash, cash equivalents and marketable securities of $221.9$356.7 million, excluding $15.3$15.1 million of cash and cash equivalents held by Digital Biotechnologies, Inc.

We plan to utilize the existing cash, cash equivalents and marketable securities on hand primarily to fund our commercial and assay development initiatives associated with clonoSEQ, our continued research and development initiatives related to mapping TCRs to antigens and the advancement of our target discovery capabilities. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity. Currently, our funds are held in money market funds and marketable securities consisting of U.S. government treasury and agency securities, corporatecommercial bondspaper and commercialcorporate paper.bonds.

While we may experience variability in revenue in the near term, over the long-termlong term we expect revenue from our current and future products and services to grow. Accordingly, we expect our accounts receivable and inventory balances to increase. Our levels of accounts receivable may fluctuate relative to our revenue for a number of reasons, including the timing of milestone triggers and related payment of those milestones and an increase in revenue generated from clinical customers, which may result in more billings in arrears as opposed to upfront payments. Any increase in accounts receivable and inventory may not be completely offset by increases in accounts payable and accrued expenses, which could result in greater working capital requirements.