Financial Analysis

3. Business Combination Foresight Diagnostics, Inc. On December 4, 2025, the Company completed the acquisition of Foresight Diagnostics, Inc. (Foresight Diagnostics), a leader in ultrasensitive molecular residual disease (MRD) detection. Foresight Diagnostics is a cancer diagnostics company and CLIA-registered laboratory. Their circulating tumor DNA (ctDNA)-based MRD tests leverage its patented PhasED-Seq technology, targeting phased variants. The acquisition was completed primarily to expand Nateras intellectual property portfolio for tumor-informed and personalized MRD products including in phased variants and to build on Foresights clinical research momentum in B-cell lymphomas. The total purchase consideration for the acquisition of Foresight Diagnostics was $424.5 million, which included the issuance of 1,127,982 shares of common stock, par value of $0.0001 per share, at a fair value based on the acquisition date closing price of $242.06 per share of Natera common stock. Former Foresight Diagnostics shareholders received 0.0280 shares of Natera common stock for each share of Foresight Diagnostics capital stock issued and outstanding as of immediately prior to the closing of the acquisition. Additionally, the Company assumed outstanding stock options of Foresight Diagnostics (Assumed Options). Each Assumed Option was converted into an option to purchase shares of the Companys common stock based on the exchange ratio specified in the acquisition agreement. The Assumed Opti …

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10. Commitments and Contingencies Legal Proceedings The Company is or has been involved in legal matters, including investigations, subpoenas, demands, disputes, litigation, requests for information, and other regulatory or administrative actions or proceedings, including those with respect to intellectual property, testing and test performance, billing, reimbursement, marketing, short seller and media allegations, employment, and other matters. The Company is responding to ongoing regulatory and governmental investigations, subpoenas and inquiries, and contesting its current legal matters, but cannot provide any assurance as to the ultimate outcome with respect to any of the foregoing. There are many uncertainties associated with these matters. The Company assesses legal contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. When evaluating legal contingencies, the Company may be unable to provide a reasonable estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation or other matters may be unsupported, exaggerated or unrelated to possible outcomes, and as such are not meaningful indicators of its potential liability. Loss contingencies, including claims and legal actions arising i …

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11 . Stock-Based Compensation Equity Plans 2015 Equity Incentive Plan General . The Companys board of directors adopted its 2015 Equity Incentive Plan (the 2015 Plan), in June 2015. The Companys 2015 Plan replaced all of its prior stock plans. In the second quarter of 2024, the Companys stockholders approved an amended and restated version of the 2015 Plan which increased the shares reserved for issuance by 6.0 million shares of the Companys common stock, extended the term of the plan by an additional 10 years and eliminated the evergreen feature which provided for automatic annual increases in the number of shares available for issuance under the 2015 Plan. Stock options vest as determined by the compensation committee. In general, they will vest over a four-year period following the date of grant. These awards generally expire earlier if the participant's service terminates earlier. Restricted Shares and Stock Units. Restricted shares and stock units (collectively RSUs) may be awarded under the 2015 Plan in return for any lawful consideration, and participants who receive RSUs generally are not required to pay cash for their awards. These awards may be subject to vesting. Vesting may be based on length of service, the attainment of performance-based milestones or a combination of both, as determined by the compensation committee. Further, RSUs may be granted and immediately vested in lieu of certain obligations. The Company also periodically awards phantom stock units, unde …

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5. Fair Value Measurements The Company's financial assets and liabilities carried at fair value are comprised of investment assets that include money market and investments. The fair value accounting guidance requires that assets and liabilities be carried at fair value and classified in one of the following three categories: Level I: Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Level II: Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves; and Level III: Inputs that are unobservable data points that are not corroborated by market data. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis The following table represents the fair value hierarchy for the Companys financial assets measured at fair value on a recurring basis: December 31, 2025 December 31, 2024 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Cash, cash equivalents and restricted cash (1) $ 1,076,140 $ $ $ 1,076,140 $ 945,587 $ $ $ 945,587 Municipal securities 22,689 22,689 Warrants 12,659 12,659 11,200 11,200 Total financial assets $ 1,076,140 $ $ 12,659 $ 1,088,799 $ 945,587 $ 22,689 $ 11,200 $ 979,476 Financial Liabilities …

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6. Goodwill and Intangible Assets Goodwill On December 4, 2025, upon the acquisition of Foresight Diagnostics the Company recorded $141.1 million of goodwill. See Note 3, Business Combination , for additional information. There were no measurement period adjustments recorded to the carrying value of goodwill during the year ended December 31, 2025. The Company determined that no events occurred or circumstances changed that would indicate that it is more likely than not that the fair value of its reporting unit is less than its carrying amount during the year ended December 31, 2025. However, if certain events occur or circumstances change, it may be necessary to record impairment charges in the future. Intangible Assets The Companys intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, which range from 3 to 15 years. Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company has no indefinite-lived intangible assets. The Company determined that no events occurred or circumstances changed during the reporting periods ended December 31, 2025 and 2024 that would indicate that its intangible assets with finite lives may not be recoverable. However, if certain events occur or circumstances change, it may be necessary to record impairment charges in the future. Intangible assets are comprised …

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"14. Income Taxes The Companys loss before income taxes is substantially all within the United States. The following table presents a reconciliation of the income tax expense computed at the statutory federal rate and the Company's income tax expense for the year ended December 31, 2025 in accordance with the new guidance in ASU No. 2023-09: December 31, 2025 (in thousands, except percentages) Tax benefit at the U.S. federal statutory rate $ (56,299) 21.00 % State and local income taxes, net of federal benefit (1) (8,053) 3.00 % Foreign tax effects 334 (0.12) % Tax credits: Research and development credits (2,020) 0.75 % Changes in valuation allowance 101,513 (37.87) % Nontaxable or nondeductible Items: Stock-based compensation (133,410) 49.76 % Nondeductible officers' compensation 33,202 (12.38) % Meals & entertainment 3,646 (1.36) % Other 961 (0.36) % Other adjustments: Other 196 (0.07) % Benefit for income taxes $ (59,929) 22.35 % (1) State taxes in California, Illinois, New York, and New Jersey made up the majority (greater than 50% ) of the tax effect in this category. The following table presents a reconciliation of the income tax expense computed at the statutory federal rate and the Company's income tax expense for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU No. 2023-09: December 31, 2024 2023 (in thousands, except percentages) U.S. federal taxes (benefit) at statutory rate $ (39,844) 21.00 % $ (91,251) 2 …

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9. Leases Operating Leases In September 2015, the Company entered into a long-term lease agreement for laboratory and office space totaling approximately 94,000 square feet in Austin, Texas. The original lease term was 132 months beginning in December 2015 and expiring in November 2026, with monthly payments beginning in December 2016. In December 2021, the Company entered into an amendment of the Austin lease agreement, which extended the lease of the current premises through March 2033. The amendment also includes two additional office spaces (the First Expansion Premises and the Second Expansion Premises). The First Expansion Premises consists of 32,500 rentable square feet and commenced in February 2022. The Second Expansion Premises consists of 65,222 rentable square feet and commenced in September 2022. The terms of the First and Second Expansion Premises expire in March 2033. In March 2025, the Company entered into a lease agreement for additional premises of approximately 57,100 rentable square feet in Austin, Texas through March 2033 with an annual rent expense of approximately $0.9 million. In August 2025, the Company entered into a lease agreement for additional premises of approximately 45,800 rentable square feet in Austin, Texas through March 2033 with an annual rent expense of approximately $0.7 million. In December 2025, the Company exercised its expansion right for an additional premises of approximately 28,468 rentable square feet in Austin, Texas through Ma …

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12. Debt Credit Line Agreement In September 2015, the Company entered into a credit line with UBS (the Credit Line) providing for a $50.0 million revolving line of credit which was fully drawn down in 2016. The Credit Line was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%. The interest rate was subsequently changed to the 30-day SOFR average, plus 1.21%. The SOFR rate is variable. The interest rate as of December 31, 2025 was 4.29%. The Credit Line was subsequently increased from $50.0 million to $150.0 million in 2020. In June 2023, the Credit Line decreased from $150.0 million to $100.0 million. In November 2022, the Company drew down $30.0 million from the $100.0 million available from the Credit Line. The Credit Line is secured by a first priority lien and security interest in the Companys money market and marketable securities held in its managed investment account with UBS. The Company is required to maintain a minimum of at least $150.0 million in its UBS accounts as collateral which is classified as cash, cash equivalents, and short-term investments in the consolidated balance sheets. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate the Credit Line, in its discretion and without cause, at any time. In October 2023, the interest rate for the Credit Line was subsequently changed to the 30-day SOFR average, plus 0.5%. As of December 31, 2025, the Company has drawn down a total of $80.0 million and there …

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"Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) under its accounting standard codifications or other standard setting bodies and adopted by the Company as of the specified effective date. Recently Adopted Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) under its accounting standard codifications or other standard setting bodies and are adopted by the Company as of the specified effective date. In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848) (Topic 848) was issued which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. ASU 2022-06, or Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. Adoption of this standard occurred on January 1, 2025 and did not have a material impact on the Companys consolidated financial statements. In December 2023, ASU 2023-09, Income Taxes - Improvements to In …

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4. Revenue Recognition The Company recognizes revenues when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers. Product Revenues Product revenues are derived by performing genetic testing services and the Companys performance obligation is complete when test results are delivered to a laboratory or patient (each a customer). A performance obligation represents a promise in a contract to transfer a distinct good or service to a customer, which represents a unit of accounting in accordance with ASC 606. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. A portion of the consideration should be allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company evaluates its contracts with laboratory partners and patients and identifies the performance obligations in those contracts, which are the delivery of the test results. The total …

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16. Segment Reporting In November 2023, ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, was issued which requires disclosure of incremental segment information on an interim and annual basis that are regularly provided to the chief operating decision maker (the CODM) and included within each reported measure of segment profit or loss. The Company has adopted this ASU as of December 31, 2024. The Company currently operates as a single reporting segment entity with the Chief Executive Officer as the CODM. The CODM relies on the financial statements presented within the annual report Form 10-K and quarterly Form 10-Q to evaluate the Companys financial performance and make key operating decisions. The key area of focus of the CODM for the allocation of resources is the cash used in operations. These financial statements provide a comprehensive view of the Companys overall financial condition, including information on expenses, assets, and liabilities. The significant expense categories are consistent with those presented on the face of the statements of operations and comprehensive loss. The CODM does not receive or use any other segmented or disaggregated financial or any significant expense information for decision-making purposes. Additionally, gross margin is regularly provided to the CODM and is derived based on the consolidated statements of operations and comprehensive loss as follows: December 31, 2025 2024 2023 (in thousands ex …

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"2 . Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP). Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses for the near future. The Company had a net loss of $208.2 million for the year ended December 31, 2025 and an accumulated deficit of $2.8 billion as of December 31, 2025. As of December 31, 2025, the Company had $1.1 billion in cash, cash equivalents, and restricted cash and $80.3 million of outstanding balance on the Credit Line (as defined in Note 12, Debt ) including accrued interest. The Company is required to maintain a minimum of at least $150.0 million in its UBS accounts as collateral for its Credit Line which is classified as cash, cash equivalents, or short-term investments in the consolidated balance sheets. As of December 31, 2025, the Company had $20.0 million remaining and available on its Credit Line. While the Company has introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations and business plans. Accordingly, the Company has funded the portion of operating costs that exceeds revenues through a combination of equity issuances, debt issuances, and other financings. The Company continues to invest in the development and commercialization of its existing and future products and, consequ …

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13. Stockholders Equity As of December 31, 2025, the Company had 50,000,000 authorized shares of its preferred stock, of which no shares were issued and outstanding ; and 750,000,000 authorized shares of its common stock, at $0.0001 par value, and there were approximately 139,693,000 shares of common stock issued and outstanding . In October 2024, the Company elected to settle its outstanding Convertible Notes through physical settlement with shares of the Companys common stock as the settlement method to apply to all conversions of the Convertible Notes. All terms and conditions associated with physical settlement are noted within the terms of the original Indenture Agreement. The Convertible Notes were settled for approximately 7,532,300 shares of the Companys common stock. In September 2023, the Company completed an underwritten equity offering and sold 4,550,000 shares of its common stock at a price of $55 per share to the public. Before estimated offering expenses of $0.4 million, the Company received proceeds of approximately $235.8 million net of the underwriting discount. …

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17. Subsequent Events Subsequent to December 31, 2025, the Company entered into a new lease arrangement for additional laboratory space in San Carlos, California. The new lease arrangements have future commitments aggregating to approximately $39.2 million through 2036.

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