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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in Item 1 of in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the heading “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, 2025. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025. See the section titled “Special Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless context requires otherwise, references to “we,” “us,” “our,” “Caris,” or “the Company” here refer to Caris Life Sciences, Inc. together with its wholly owned subsidiaries.

We are a leading, patient-centric, next-generation AIleading TechBio company and precision medicine pioneer.company. We develop and commercialize innovative solutions to transform healthcare through the use of comprehensive molecular information and AI/ML algorithms at scale. Our entire portfolio of precision medicine solutions is designed to benefit patients, with an initial focus on oncology, and serves the clinical, academic, and biopharma markets.

We founded Caris in 2008 with the belief and vision that combining a vast set of consistently generated molecular information with robust data-driven insights could realize the potential of precision medicine for patients. We have spent the last 18 years developing and building our portfolio of comprehensive, proprietary molecular profiling solutions and generating what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology based on tests we have run on over 1,070,0001,130,000 cases as of MarchJune 31,30, 2026. Our Caris Molecular Intelligence platform is purpose-built to leverage the convergence of next-generation sequencing (“NGS”), artificial intelligence (“AI”) and machine learning (“ML”) technologies, and high-performance computing. The power of our differentiated Caris platform has enabled us to develop the latest generation of advanced precision medicine diagnostic solutions designed to address the entire cancer care continuum, including early detection, minimal residual disease (“MRD”) tracking, therapy selection, and treatment monitoring, as well as to create molecular signatures and discover and develop novel precision medicine therapeutics.

Our Molecular Intelligence product portfolio consists of our MI Profile Platform, our whole exome sequencing (“WES”)/whole transcriptome sequencing (“WTS”) tissue-based molecular profiling solutions that have generated the majority of our revenue to date, our Caris Assure Platform, our WES/WTS blood-based molecular profiling solutions, and our Precision Whole Genome Platform, our whole genome sequencing (“WGS”) blood- and tissue-based profiling solutions. Our purpose-built, proprietary multi-omic profiling solutions capture and analyze molecular information from tissue and blood in a comprehensive manner. We believe this approach best positions us to provide actionable treatment pathways from targeted therapies to drive superior clinical outcomes for patients while also generating a rich dataset to power insights and innovation. Our molecular profiling solutions and the data generated by our multi-omic technology platform also provide value to our biopharma partners, such as Moderna, AbbVie, Xencor, Merck KGaA and Genentech, through partnerships that aim to increase the probability of technical and regulatory success of their therapeutic pipelines.

To our knowledge, we remain the only genomic profiling company to consistently utilize WES and WTS as standard practice on every eligible patient sample. Our in-depth profiling of patient samples has led to the creation of what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology.oncology, which now also serves as the foundation for our digital solutions such as Caris MI Clarity.

With our broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024 and2024, the FDA approval of MI Cancer Seek as a companion diagnostic in the fourth quarter of 2024 followed by the broad commercial launch of MI Cancer Seek in the first quarter of 2025 as the NGS component of the MI Profile Platform, and the commercial launches of Caris ChromoSeq, Caris Detect, and Caris MI Clarity in the second quarter of 2026, we believe that increased testing volumes and the continued expansion of our menu of molecular profiling volumesand digital solutions will meaningfully contribute to our growth in 2026 and beyond.

For the three months ended MarchJune 31,30, 2026 and 2025, we generated total revenue of $216.2$263.7 million and $120.9$181.4 million, respectively, and incurred a net loss of $0.5$0.6 million and $102.6$71.8 million, respectively. For the six months ended June 30, 2026 and 2025, we generated total revenue of $479.9 million and $302.3 million, respectively, and incurred a net loss of $1.1 million and $174.4 million, respectively. Our Adjusted EBITDA was $26.2$55.7 million and $(36.2)$16.7 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $81.9 million and $(19.5) million for the six months ended June 30, 2026 and 2025, respectively. While we have achieved net profit for the three months ended September 30, 2025 and December 31, 2025, we may continue to incur net losses in the near future, and our expenses are expected to increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to launch and drive market adoption of our solutions. Cash flow from operations was $32.9$61.4 million and $(31.324.0) million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Our free cash flow was $22.5$28.9 million and $(34.028.1) million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. For additional information regarding Adjusted EBITDA and free cash flow, each non-GAAP financial measures, see “—Non-GAAP Financial Measures.” Additionally, as of MarchJune 31,30, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $825.7$794.9 million, and the aggregate principal amount of debt outstanding under our existing term loan was $400.0 million. For additional information regarding our liquidity and capital resources, see “—Liquidity and Capital Resources.”

•Market acceptance and commercial success of our solutions. Our success and future growth will depend on maintaining and expanding market acceptance of our current and future molecular profiling solutions along with commercial success of these solutions across existing and new customers. Our MI Profile and Caris Assureclinical case volumes have continued to increase over time. Changes in our case volumes and the pricing of our solutions, however, are generally not impacted by the cancer type. For the three months ended MarchJune 31,30, 2026 and 2025, the number of clinical cases was 52,80059,200 and 45,900,50,000, respectively. For the six months ended June 30, 2026 and 2025, the number of clinical cases was 112,000 and 95,900, respectively. We commercially launched our MI Cancer Seek solution in January 2025 as the WES/WTS NGS component of our MI Profile platform. We initiated the broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024. Realizing the potential of Caris Assure and our future solutions, including Caris Detect,Detect across the cancer treatment continuum is a key component of our business strategy. The commercial success of our solutions will depend upon, among other things, additional validation studies and clinical trials that demonstrate the effectiveness of our solutions, particularly for early detection, multi-cancer early detection (“MCED”), MRD tracking, and treatment monitoring, and the continued adoption of Caris Assure and the adoption of our other solutions, including Caris ChromoSeq, Caris MI Clarity and Caris Detect, by patients, the medical community, and third-party payers. In addition, we expect that our ability to maintain and expand our sales, marketing, and distribution capabilities to support the increased adoption of our molecular profiling solutions will be a key factor in our success.

•Development and introduction of new solutions. Our business success will also depend on our ability to develop and commercialize new solutions. We plan to continue to invest in the enhancement of our molecular profiling solutions, the development of new solutions to achieve meaningful innovation in precision oncology and other disease states, and the expansion of our clinico-genomic datasets to drive breakthrough science. We intend to expand the application of Caris Assure to early detection, MCED, MRD tracking, and treatment monitoring. Our ability to develop and commercialize new solutions and services could face many challenges that could impact our future performance and results of operations. Such challenges include, but are not limited to, obtaining regulatory approvals; completing certain clinical development activities, validation studies, and/or clinical trials; having guidelines or recommendations for healthcare providers, administrators, payers, and patient communities relating to such solutions; and receiving favorable exposure in peer-reviewed publications and from key opinion leaders (“KOLs”).

•Scaling infrastructure to meet increasing demand. Our financial results are also dependent upon our ability to support current and future levels of demand for our solutions, including MI ProfileProfile, Caris Assure, Caris Detect, Caris MI Clarity, and Caris Assure.ChromoSeq. As the volumes of our current and new molecular profiling solutions continue to grow, we will need to simultaneously increase our capacity for sample intake and storage, enhance our customer service, improve our billing and general business processes, expand our internal quality assurance programs, incorporate new equipment, implement new technology systems and processes, expand laboratory capacity, and otherwise extend our operational capabilities to support comprehensive genomic analyses at a larger scale while retaining expected turnaround times. This may result in us purchasing additional equipment, constructing additional facilities, hiring additional qualified labor, and implementing new systems, technology, controls, and procedures. As such, our capital expenditures and cost of services may increase as we continue our efforts to expand capacity. In addition, revenue may be impacted in the event that we are not able to meet the increase in demand.

Molecular profiling services revenue is generated from the provision of precision oncology solutions to ordering physicians utilizing MI Profile, MI Cancer Seek (NGS component of MI Profile), Caris Assure, Caris Detect, Caris MI Clarity, and Caris Assure.ChromoSeq. Revenue is recorded when performance obligations are satisfied, which is deemed to be when the results of the profiling services are provided to the ordering physicians, including certain hospitals, cancer centers, and institutions. Revenue is recorded at the amount that reflects the consideration to which we expect to be entitled from customers and third-party payers in exchange for providing such services.

Other income (expense),expense, net consists of items related to foreign currency gains and losses, loss on debt extinguishment, and additional immaterial items.

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

Total revenue was $216.2$263.7 million for the three months ended MarchJune 31,30, 2026, compared to $120.9$181.4 million for the three months ended MarchJune 31,30, 2025, an increase of $95.3$82.3 million, or 78.8%.45.4%.

Molecular profiling services revenue increased to $210.8$252.3 million for the three months ended MarchJune 31,30, 2026, from $114.1$162.9 million for the three months ended MarchJune 31,30, 2025, an increase of $96.7$89.3 million, or 84.8%.54.8%. The increase was driven primarily by higher clinical case volume and higher reimbursement, including improved average selling prices resulting from enhanced contracting. Clinical cases increased from approximately 50,000 for the three months ended June 30, 2025, to approximately 59,200 for the three months ended June 30, 2026.

Revenue from clinical cases for patients covered by Medicare represented approximately 41.2%38.9% and 54.3%49.7% of our molecular profiling services revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Pharma research and development services revenue decreased to $5.4$11.5 million for the three months ended MarchJune 31,30, 2026, from $6.8$18.5 million for the three months ended MarchJune 31,30, 2025, a decrease of $1.5$7.0 million, or 21.4%.38.0%. The decrease is a result of the timing of delivery of services under the applicable agreements.

Cost of services - Molecular profiling services was $72.9$81.3 million for the three months ended MarchJune 31,30, 2026, compared to $60.9$65.3 million for the three months ended MarchJune 31,30, 2025, an increase of $12.0$16.0 million, or 19.7%.24.5%.

The blood laboratory contributed ana $8.6$10.4 million increase, in addition to an increase within the tissue laboratory of $3.4$5.5 million. The blood laboratory increase was primarily driven by an increase in materials and related testing costs of $8.1$8.6 million, an increase in labor costs of $0.7$1.2 million, and a $0.7$0.9 million increase in utilities, rent, and allocated overhead, offset by a decrease in depreciation expense of $0.8 million. The tissue laboratory increase was driven primarily by an increase in materials and related testing costs of $1.9$2.3 million, and an increase in labor costs of $2.6$3.6 million, offset by a decrease in depreciation expense of $0.6$0.4 million.

Cost of services - Pharma research and development services was $1.9$2.8 million for the three months ended MarchJune 31,30, 2026, compared to $3.0$2.4 million for the three months ended MarchJune 31,30, 2025, aan decreaseincrease of $1.0$0.4 million, or 34.3%.16.6%. The decreaseincrease was driven primarily by aan decreaseincrease in materials and related testing costs of $0.7$0.1 million, and aan $0.5 million decrease in utilities, rent, and allocated overhead, offset by a decreaseincrease in labor costs of $0.4$0.2 million.

Gross profit, calculated as total revenue less cost of services, was $141.3$179.6 million for the three months ended MarchJune 31,30, 2026, compared to $57.1$113.7 million for the three months ended MarchJune 31,30, 2025, an increase of $84.3$65.9 million, or 147.7%,58.0%, primarily due to the increase in molecular profiling services revenue.

Selling and marketing expenses were $45.0$53.8 million for the three months ended MarchJune 31,30, 2026, compared to $39.8$42.3 million for the three months ended MarchJune 31,30, 2025, an increase of $5.2$11.5 million, or 13.1%.27.2%. This increase was primarily due to a $2.3$6.9 million increase in personnel costs related to supportour existingsales solutions,team andexpansion, a $2.6$1.3 million increase in professional servicesservices, anda $2.4 million increase in travel and marketing expenses, and a $0.9 million increase in software licensing expenses.

General and administrative expenses were $59.7$66.5 million for the three months ended MarchJune 31,30, 2026, compared to $52.1$64.4 million for the three months ended MarchJune 31,30, 2025, an increase of $7.6$2.2 million, or 14.6%.3.4%. This increase was primarily due to a $3.2$5.4 million increase in labor costs and benefits associated with an expansion of personnel, a $2.7$2.4 million increase in consulting, audit and legal professional fees primarily due to the increased costs of operating as a public company,fees, a $0.7 million increase in insurance expenses, a $0.8$2.3 million increase in utilities expenses, a $0.8$1.0 million increase in software licensing expenses, a $2.0 million increase in indirect tax expenses, a $0.8$0.7 million increase in rent expenses, and a $0.7$1.1 million increase in recruiting expenses, offset by a $1.3$0.5 million decrease in depreciation expense, and aan $3.2$11.5 million decrease in stock-based compensation expense, which is primarily duefrom toawards awith one-timean modificationIPO-related expensevesting recordedcondition for the three months ended MarchJune 31,30, 2025.

Research and development expenses were $31.3$32.4 million for the three months ended MarchJune 31,30, 2026, compared to $23.1$25.0 million for the three months ended MarchJune 31,30, 2025, an increase of $8.2$7.3 million, or 35.8%.29.2%. The increase was primarily driven by an increase of $4.9 million in material and reference testing costs associated with higher product development testing, a $1.1$1.7 million increase in depreciation expense, a $0.9$1.6 million increase in stock-based compensation, a $3.0$3.5 million increase in utilities expenses, and a $1.4 million increase in biorepository collection fees, offset by a $0.4$0.7 million reduction in material and reference testing costs, and a $0.6 million reduction in allocated overhead, and a $1.1 million reduction in biorepository collection fees.overhead.

Interest income was $6.8 million for the three months ended MarchJune 31,30, 2026, compared to $0.5$1.6 million for the three months ended MarchJune 31,30, 2025, an increase of $6.3$5.2 million, or 1,258.6%.321.4%. This increase was primarily due to higher cash balances within our interest-earning bank accounts.

Changes in fair value of financial instruments were $0.0 million for the three months ended MarchJune 31,30, 2026, compared to $(32.317.9) million for the three months ended MarchJune 31,30, 2025, an increase of $32.3$17.9 million, or 100.0%. The increase iswas primarily due to the absence of financial instruments subject to fair value adjustments during 2026, whereas such instruments were outstanding in 2025 and were subject to fair value changes during the period.