Financial Analysis

Acquisition In December 2025, the Company purchased all of the outstanding shares of MetaSight Diagnostics Ltd., or MetaSight, a health technology company. The transaction included $59.0 million in upfront cash consideration paid at closing, plus up to $90.0 million in variable contingent consideration tied to future commercial performance and regulatory approvals of the MetaSight technology. The Company accounted for the acquisition as a business combination. Total purchase consideration net of cash acquired was $93.0 million, consisting of $59.0 million in net cash paid upon closing, and variable contingent consideration with a fair value of $34.0 million as of the acquisition date. See Note 5, Fair Value Measurements, Cash Equivalents and Marketable Securities , for additional information related to the valuation and fair value of the contingent consideration. The excess purchase consideration over the fair value of assets acquired and liabilities assumed was recorded as goodwill. Goodwill is attributable to future revenue opportunities that the Company expects to achieve from leveraging the acquired technologies, as well as the assembled workforce. The following table summarizes the allocation of the total purchase consideration to the estimated fair values of assets acquired and liabilities assumed: Amount (in thousands) Cash and cash equivalents $ 3,638 Prepaid expenses and other current assets, net 178 Property and equipment, net 478 IPR&D 20,831 Goodwill 73,967 Ne …

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Commitments and Contingencies Legal Proceedings In addition to commitments and obligations incurred in the ordinary course of business, from time to time the Company may be subject to a variety of claims and legal proceedings, including claims from customers and vendors, pending and potential legal actions for damages, governmental investigations and other matters. For example, the Company has received, and may in the future continue to receive letters, claims or complaints from others alleging false advertising, patent infringement, violation of employment practices and trademark infringement. The Company has also instituted, and may in the future institute, additional legal proceedings to enforce its rights and seek remedies, such as monetary damages, injunctive relief and declaratory relief. The Company cannot predict the results of any such disputes, and despite the potential outcomes, the existence thereof may have an adverse material impact on the Company because of diversion of management time and attention as well as the financial costs related to resolving such disputes. The Company and its affiliates are parties to the legal claims and proceedings described below. The Company is vigorously defending itself against those claims and in those proceedings. Significant developments in those matters are described below. If the Company is unsuccessful in defending, or if it determines to settle, any of these matters, it may be required to pay substantial sums, be subject t …

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Debt 2027 Notes In November 2020, the Company issued $1.15 billion principal amount of its 0% Convertible Senior Notes due 2027, or the 2027 Notes. The 2027 Notes do not bear interest, and the principal amount of the 2027 Notes will not accrete. However, special interest and additional interest may accrue on the 2027 Notes at a rate per annum not exceeding 0.50% (subject to certain exceptions) upon the occurrence of certain events such as the failure to file certain reports to the Securities and Exchange Commission, or to remove certain restrictive legends from the 2027 Notes. The 2027 Notes will mature on November 15, 2027, unless repurchased, redeemed or converted earlier. Before August 15, 2027, holders of the 2027 Notes will have the right to convert their 2027 Notes only under the following circumstances: during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on March 31, 2021, if the last reported sale price of the Company's common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, or the sale price condition; during the five consecutive business days immediately after any ten consecutive trading day period, or the measurement period, if the trading price per $1,000 principal amount of the 2027 Notes for each trading day of the measurement p …

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The following table presents the Companys revenue disaggregated by revenue source: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (unaudited) (in thousands) Oncology $ 219,105 $ 158,685 $ 424,059 $ 309,244 Biopharma and data 60,947 56,020 113,924 101,396 Screening 52,866 14,814 94,456 20,491 Licensing and other 2,060 2,569 4,204 4,428 Total revenue $ 334,978 $ 232,088 $ 636,643 $ 435,559 …

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Stock-Based Compensation Stock Option Activity A summary of the Companys stock option activity and related information is as follows: Options Outstanding Shares Available for Grant Shares Subject to Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (unaudited) (in thousands) Balance as of January 1, 2026 13,181,189 4,548,494 $ 34.83 6.4 $ 310,466 2018 Plan annual increase (1) 3,689,000 Granted (4,965) 4,965 94.42 Exercised (817,031) 27.71 Canceled 69,491 (69,491) 35.47 Restricted stock units granted (1,759,262) Restricted stock units canceled 418,679 Performance-based restricted stock units granted (598,353) Performance-based restricted stock units adjusted for performance achievement (61,706) Performance-based restricted stock units canceled 159,657 Balance as of June 30, 2026 15,093,730 3,666,937 $ 36.48 6.1 $ 416,384 Vested and Exercisable as of June 30, 2026 2,730,746 $ 36.76 5.4 $ 309,309 (1) Effective as of January 1, 2026, an additional 3,689,000 shares of common stock became available for issuance under the 2018 Plan, as a result of the operation of the automatic annual increase provision therein. Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The total intrinsic value of the options exercised was $73.8 million and $1.3 million for the three months ended June 30 …

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Fair Value Measurements, Cash Equivalents and Marketable Securities Financial instruments consist of cash equivalents, marketable securities, accounts receivable, net, prepaid expenses and other current assets, net, and accounts payable and accrued liabilities. Cash equivalents and marketable securities are stated at fair value. Prepaid expenses and other current assets, net, and accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A financial instruments classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that ar …

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Intangible Assets, Net and Goodwill The following table presents details of purchased intangible assets as of June 30, 2026, and December 31, 2025: June 30, 2026 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted-Average Useful Life (unaudited) (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 11,886 $ (7,450) $ 4,436 4.4 Non-compete agreements and other covenant rights 5,100 (5,100) 0.0 Total intangible assets subject to amortization $ 16,986 $ (12,550) $ 4,436 Intangible assets not subject to amortization: IPR&D $ 20,831 $ $ 20,831 Goodwill 77,257 77,257 Total intangible assets not subject to amortization $ 98,088 $ $ 98,088 Total purchased intangible assets $ 115,074 $ (12,550) $ 102,524 December 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted-Average Useful Life (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 11,886 $ (6,901) $ 4,985 4.8 Non-compete agreements and other covenant rights 5,100 (4,995) 105 0.3 Total intangible assets subject to amortization $ 16,986 $ (11,896) $ 5,090 Intangible assets not subject to amortization: IPR&D $ 20,831 $ $ 20,831 Goodwill 77,257 77,257 Total intangible assets not subject to amortization $ 98,088 $ $ 98,088 Total purchased intangible assets $ 115,074 $ (11,896) $ 103,178 Amortization of finite-lived intangible assets was $0.3 million and $0.4 million for the three mon …

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Income Taxes The income tax expense for the three and six months ended June 30, 2026, and 2025, was determined based upon estimates of the Companys effective income tax rates in various jurisdictions. The difference between the Companys effective income tax rate and the U.S. federal statutory rate is primarily attributable to state income taxes, foreign income taxes, the effect of certain permanent differences, and full valuation allowance against domestic net deferred tax assets. The income tax expense for the three and six months ended June 30, 2026, and 2025, relates primarily to state minimum income tax and income tax on the Companys earnings in foreign jurisdictions. …

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Leases The Company has entered into various operating lease agreements for office space, data center, lab and warehouse use, with remaining terms ranging from 0.1 to 7.0 years, some of which include one or more options to renew. As leases approach maturity, the Company considers various factors such as market conditions and the terms of any renewal options that may exist to determine whether it will renew the lease, as such, the Company does not include renewal options in its lease terms for calculating its lease liability, as the renewal options allow it to maintain operational flexibility and the Company is not reasonably certain it will exercise these renewal options at the time of the lease commencement. In April 2025, the Company entered into a lease amendment for its office and lab space of approximately 163,000 square feet in Redwood City, California, the Redwood City lease, and extended the lease terms by additional 3.1 to 6.0 years to December 31, 2030, and December 31, 2031. The Company accounted for this amendment as a lease modification by remeasuring the ROU assets and lease liabilities as of the effective date, and recorded additional ROU assets and lease liabilities of $35.4 million, respectively. In addition, the Redwood City lease has been classified as an operating lease. The Company estimated the incremental borrowing rate of 7.98% to determine the present value of lease payments for the Redwood City lease using market yield curves based on similar terms an …

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Accounting Pronouncements Adopted In December 2023, the Financial Accounting Standards Board, or FASB, issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which amended existing income tax disclosure guidance, primarily requiring more detailed disclosures on the effective tax rate reconciliation and income taxes paid. This guidance became effective for the annual reporting periods beginning the year ended December 31, 2025. The Company adopted this accounting pronouncement prospectively in the fiscal year of 2025 and provided required disclosures in Note 13, Income Taxes to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2025. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient that in developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. This guidance became effective for the annual reporting periods beginning the year ended December 31, 2026, and for interim reporting periods within those annual reporting periods. The Company adopted this accounting pronouncement prospectively in the first quarter of 2026 which has an immaterial impact on its financial statements …

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Segment and Geographic Information The Company operates as one operating segment, and the Company's chief operating decision makers, or the CODMs, are its Co-Chief Executive Officers. The CODMs review segment financial information presented on a consolidated basis, including revenue, gross profit, operating expenses, net loss and adjusted EBITDA, and considers budget-to-actual variances for the purposes of making operating decisions, assessing financial performance and allocating resources. The CODMs do not evaluate operating segment performance using asset information. The following table presents a summary of the Company's segment information: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (unaudited) (in thousands) Revenue $ 334,978 $ 232,088 $ 636,643 $ 435,559 Less: Cost of revenue (1) 111,854 78,296 213,414 150,481 Research and development expense (1) 80,508 72,547 157,097 147,444 Sales and marketing expense (1) 172,360 107,832 326,790 201,959 General and administrative expense (1) 35,442 34,931 72,479 65,490 Other segment items (2) 54,956 38,381 99,080 65,243 Net loss $ (120,142) $ (99,899) $ (232,217) $ (195,058) (1) Excludes stock-based compensation and related employer payroll tax payments, contingent consideration, amortization of intangible assets, and non-recurring other operating expense. (2) Includes stock-based compensation and related employer payroll tax payments, contingent consideration, amortization of intangible assets, non-rec …

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Summary of Significant Accounting Policies Basis of Presentation and Consolidation The Companys condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and in conjunction with the rules and regulations of the Securities and Exchange Commission, or the SEC. The accompanying condensed consolidated financial statements include the accounts of Guardant Health, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain immaterial reclassifications of prior period amounts were made to conform with the current period presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimation of variable consideration, estimation of credit losses, standalone selling price allocation included in contracts with multip …

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Common Stock The Companys common stockholders are entitled to dividends if and when declared by the Companys Board of Directors, or the Board of Directors. As of June 30, 2026, and December 31, 2025, no dividends on the Company's common stock had been declared by the Board of Directors. The Companys common stock has been reserved for the following potential future issuances: June 30, 2026 December 31, 2025 (unaudited) Shares underlying outstanding stock options 3,666,937 4,548,494 Shares underlying unvested restricted stock units 5,812,827 6,315,213 Shares underlying unvested performance-based restricted stock units 1,590,213 1,280,838 Shares available for issuance under the 2018 Incentive Award Plan 11,827,540 9,811,870 Shares available for issuance under the 2018 Employee Stock Purchase Plan 3,813,528 2,833,178 Shares available for issuance under the 2023 Employment Inducement Incentive Award Plan 3,266,190 3,369,319 Total 29,977,235 28,158,912 Equity Offering In November 2025, the Company completed a follow-on underwritten public offering, in which it issued and sold 2,856,981 shares of its common stock, and reissued and sold 976,351 shares of its treasury stock, at a price of $90.00 per share. The Company received net proceeds of $327.3 million after deducting underwriting discounts and commissions and other offering costs of $17.7 million. Treasury stock repurchase and reissuance In February 2025, in connection with the Note Exchange Transaction, the Company repurchased …

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