OraSure Q3 revenue up 14%, net loss at $13.1M
The Colli-Pee Dx Urine Collection Kit is cleared for at-home first-void urine collection and validated with Roche’s cobas CT/NG and cobas TV/MG assays.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
OraSure Technologies, Inc. reported third-quarter 2026 net revenue of $30.9 million, up 14% from $27.1 million a year earlier; gross profit margin was 45.2%, versus 43.5%, and net loss was $13.1 million versus $13.7 million. For the nine months ended September 30, 2026, net loss was $29.2 million versus $49.4 million in 2025. Operating loss was $30.8 million versus $51.9 million, including $22.5 million of noncash income from the decrease in estimated fair value of acquisition-related contingent consideration.
Cash and cash equivalents were $148.2 million at September 30, 2026, versus $199.3 million at December 31, 2025; operating activities used $34.7 million of cash over the nine months. Management expects existing cash to fund operating expenses and capital expenditures for the next 12 months. In July 2026, OraSure withdrew its FDA submission for the Sherlock-platform CT/NG self-test and plans a future submission; it concluded FDA clearance would not be achieved by December 31, 2026, so milestone contingent payments under the merger agreement will not be due and the royalty liability was reduced.
3 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter net revenue rose 14% to $30.9 million.
- Moderate pointNine-month net loss fell to $29.2 million from $49.4 million.
- Moderate pointOperating cash used fell to $34.7 million from $40.0 million.
Negative
- None.
Filing Explained
In the first nine months of 2026, OraSure retired 2.4 million program shares for $7.0 million; none were repurchased in the third quarter.
OraSure reports that the parties resolved the NowDiagnostics litigation on
The repurchase program authorizes purchases of up to
Key Figures
Net revenue: $30.9 million
Gross profit margin: 45.2%
Net loss: $13.1 million
+4 more
7 metrics
Net revenue
$30.9 million
Three months ended September 30, 2026; up 14% from $27.1 million a year earlier
Gross profit margin
45.2%
Three months ended September 30, 2026; 43.5% a year earlier
Net loss
$13.1 million
Three months ended September 30, 2026; $13.7 million a year earlier
Net loss
$29.2 million
Nine months ended September 30, 2026; $49.4 million in 2025
Net cash used in operating activities
$34.7 million
Nine months ended September 30, 2026
Cash and cash equivalents
$148.2 million
At September 30, 2026; $199.3 million at December 31, 2025
Decrease in estimated fair value of acquisition-related contingent consideration
$22.5 million
Nine months ended September 30, 2026; recorded as noncash income
Key Terms
contingent consideration, Level 3, equity method, full valuation allowance, +1 more
5 terms
contingent consideration financial
"acquisition-related contingent consideration"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
Level 3 financial
"contingent consideration obligations as Level 3 liabilities"
Level 3 describes the lowest-confidence category in the accounting “fair value” hierarchy, covering assets or liabilities whose prices are not observable in the market and must be estimated using judgment and internal models. For investors, Level 3 items matter because they can introduce greater uncertainty and potential valuation swings—like valuing a unique antique versus checking a price tag on a supermarket shelf—so they signal higher model risk and lower liquidity.
equity method financial
"recorded the investment using the equity method"
An equity method investment is an accounting approach used when a company owns enough of another business to influence its decisions but not control it (commonly around 20–50% ownership). Instead of counting only dividends, the investor records its share of the other company’s profits and losses on its own income statement and adjusts the investment’s value on the balance sheet—like tracking a friend’s joint project by noting your share of their gains or setbacks. For investors, this matters because it can significantly affect reported earnings, asset values, and the apparent strength of a company’s financial results.
full valuation allowance financial
"A full valuation allowance was recorded on the Company’s U.S. and U.K. deferred tax assets"
premarket notification regulatory
"submitted a premarket notification, or 510(k), to the U.S. Food and Drug Administration"
A premarket notification is a regulatory submission companies send to a health authority (for example, the U.S. Food and Drug Administration) to show a medical device is similar enough to an existing, approved product to be marketed. For investors, clearance from a premarket notification is like getting a green light to sell a product — it reduces regulatory uncertainty, shortens time to revenue, and lowers the risk that a new device will be blocked or delayed.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did OSUR report in the third quarter of 2026?
OraSure reported $30.9 million in net revenue for the three months ended September 30, 2026, up 14% from $27.1 million a year earlier. Diagnostics revenue was $16.8 million, and Sample Management Solutions revenue was $12.5 million.
How much could OSUR still repurchase under its stock repurchase program?
The table lists $17,960,005 as the maximum dollar value that may yet be repurchased for each monthly period from July through September 2026. The program permits purchases of up to $40.0 million in common stock over a period of up to two years, effective March 21, 2025.
Which assays has OraSure’s Colli-Pee Dx kit been validated for?
The Colli-Pee Dx Urine Collection Kit was cleared in June 2026 as a prescription device for at-home self-collection of first-void urine. OraSure said the device was validated for use with Roche’s cobas CT/NG and cobas TV/MG assays.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________
FORM 10-Q
______________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026 .
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _________to _________ .
Commission File Number 001-16537
______________________________________
(Exact Name of Registrant as Specified in Its Charter)
______________________________________
| (State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | ||||
| (Address of Principal Executive Offices) | (Zip code) | ||||
Registrant’s telephone number, including area code: (610 ) 882-1820
______________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of November 2, 2026, the registrant had 69,047,266 shares of common stock, $0.000001 par value per share, outstanding.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the Federal securities laws. These may include statements about the Company's expected revenues, earnings/losses per share, net income (loss), expenses, cash flow or other financial performance, or developments, clinical trial or development activities, expected regulatory filings and approvals, planned business transactions, views of future industry, competitive or market conditions, and other factors that could affect the Company's future operations, results of operations or financial position. These statements often include words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “will,” “should,” “could,” or similar expressions.
Forward-looking statements are not guarantees of future performance or results. Known and unknown factors that could cause actual performance or results to be materially different from those expressed or implied in these statements include, but are not limited to:
•Market acceptance of, and the Company's ability to develop, commercialize, market and sell, its products and services, whether through its internal direct sales force, distributors or third parties;
•The Company's ability to obtain and comply with necessary regulatory approvals for new products or new indications or applications for existing products, including timing and associated costs;
•Failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for the Company's products;
•Significant customer concentrations that exist or may develop in the future;
•The Company's ability to manufacture products in accordance with applicable specifications, performance standards and quality requirements;
•Changes in relationships with strategic partners or other parties, including disputes or disagreements and reliance on such parties for the performance of critical activities under collaborative arrangements;
•The Company's ability to meet increased demand for its products;
•The impact of replacing distributors on the Company's business;
•The Company's ability to achieve its financial and strategic objectives, including increasing its revenues and gross margins, and its ability to expand international sales;
•The impact of competitors, competing products and technology changes on the Company's business;
•Reduction or deferral of public funding available to customers;
•Changes in market acceptance of the Company's products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the Centers for Disease Control and Prevention (the "CDC") or other agencies;
•The Company's ability to fund research and development and other products and operations;
•The availability of raw materials and the Company's reliance on sole supply sources for critical products and components;
•The impact of contracting with the U.S. government on the Company's business;
•The Company's estimates regarding revenues, expenses, cash flows, capital requirements and needs for additional financing, and the availability and cost of financing;
•The ability to utilize net operating loss carryforwards or other deferred tax assets;
•Volatility of the Company's stock price;
•Uncertainty relating to patent protection, potential patent infringement claims, the availability of licenses to patents or other technology;
•Costs of litigation relating to intellectual property, product liability and other types of litigation;
•The impact of changes in international funding sources and testing algorithms on international sales;
•Adverse movements in foreign currency exchange rates and interest rates;
•The Company's ability to attract and retain qualified personnel;
•Changes in international, federal or state laws and regulations; and
•The impact of geopolitical and economic conditions on the Company's business.
These and other factors that could affect the Company's results are discussed more fully under the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any, in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2026, and in subsequent SEC filings. Although forward-looking statements help to provide information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are made as of the date of this report and the Company undertakes no duty to update these statements, unless it is required to do so by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make updates with respect to other forward-looking statements or that it will make any further updates to those forward-looking statements at any future time.
Investors should also be aware that while the Company does, from time to time, communicate with securities analysts, it is against the Company's policy to disclose any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, the Company has a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of OraSure.
PART I. FINANCIAL INFORMATION | |||||
| Page No. | |||||
Item 1. Financial Statements (Unaudited) | 3 | ||||
Consolidated Balance Sheets at September 30, 2026 and December 31, 2025 | 3 | ||||
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 | 4 | ||||
Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2026 and 2025 | 5 | ||||
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 | 6 | ||||
Notes to the Consolidated Financial Statements | 7 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 31 | ||||
Item 4. Controls and Procedures | 31 | ||||
PART II. OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 31 | ||||
Item 1A. Risk Factors | 32 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 32 | ||||
Item 3. Defaults Upon Senior Securities | 32 | ||||
Item 4. Mine Safety Disclosures | 32 | ||||
Item 5. Other Information | 32 | ||||
Item 6. Exhibits | 33 | ||||
Signatures | 34 | ||||
Item 1. FINANCIAL STATEMENTS
ORASURE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except per share amounts)
| September 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses | |||||||||||
| Income tax receivable | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Noncurrent Assets: | |||||||||||
| Property, plant and equipment, net of accumulated depreciation | |||||||||||
| Operating right-of-use assets, net | |||||||||||
| Finance right-of-use assets, net | |||||||||||
Intangible assets, net of accumulated amortization of $ | |||||||||||
| Goodwill | |||||||||||
| Investment in equity method investee | |||||||||||
| Deferred tax asset | |||||||||||
| Other noncurrent assets | |||||||||||
| Total noncurrent assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Deferred revenue | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Finance lease liability | |||||||||||
| Operating lease liability | |||||||||||
| Acquisition-related contingent consideration obligation | |||||||||||
| Total current liabilities | |||||||||||
| Noncurrent Liabilities: | |||||||||||
| Finance lease liability | |||||||||||
| Operating lease liability | |||||||||||
| Acquisition-related contingent consideration obligation | |||||||||||
| Other noncurrent liabilities | |||||||||||
| Total noncurrent liabilities | |||||||||||
| TOTAL LIABILITIES | |||||||||||
Commitments and contingencies (Note 12) | |||||||||||
| STOCKHOLDERS' EQUITY | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | |||||||||
See accompanying notes to the consolidated financial statements.
3
ORASURE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| NET REVENUES: | |||||||||||||||||||||||||||||||||||||||||
| Products and services | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| COST OF PRODUCTS AND SERVICES SOLD | |||||||||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||||||||||||||
| Change in the estimated fair value of acquisition-related contingent consideration | ( | ||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on sale of assets | ( | ||||||||||||||||||||||||||||||||||||||||
| Operating loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| OTHER INCOME | |||||||||||||||||||||||||||||||||||||||||
| Loss before income taxes and equity investment | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| INCOME TAX EXPENSE | |||||||||||||||||||||||||||||||||||||||||
| LOSS BEFORE EQUITY INVESTMENT | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| LOSS ON EQUITY INVESTMENT | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| NET LOSS | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
| LOSS PER SHARE | |||||||||||||||||||||||||||||||||||||||||
| BASIC | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
| DILUTED | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
| SHARES USED IN COMPUTING LOSS PER SHARE: | |||||||||||||||||||||||||||||||||||||||||
| BASIC | |||||||||||||||||||||||||||||||||||||||||
| DILUTED | |||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
4
ORASURE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| NET LOSS | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
| OTHER COMPREHENSIVE (LOSS) INCOME | |||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustments | ( | ( | |||||||||||||||||||||||||||||||||||||||
| COMPREHENSIVE LOSS | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
5
ORASURE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Unaudited)
(in thousands)
| For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Other non-cash amortization | ( | ( | |||||||||||||||||||||||||||
| Provision for credit losses | ( | ||||||||||||||||||||||||||||
| Unrealized foreign currency loss | |||||||||||||||||||||||||||||
| Interest expense on finance leases | |||||||||||||||||||||||||||||
| Loss on equity investment | |||||||||||||||||||||||||||||
| Deferred income taxes | ( | ||||||||||||||||||||||||||||
| Gain (loss) on sale of fixed assets | ( | ||||||||||||||||||||||||||||
| Change in the estimated fair value of acquisition-related contingent consideration | ( | ||||||||||||||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||||||||||||
| Accounts receivable | ( | ( | |||||||||||||||||||||||||||
| Inventories | |||||||||||||||||||||||||||||
| Prepaid expenses and other assets | ( | ||||||||||||||||||||||||||||
| Accounts payable | ( | ||||||||||||||||||||||||||||
| Deferred revenue | ( | ( | |||||||||||||||||||||||||||
| Accrued expenses and other liabilities | ( | ||||||||||||||||||||||||||||
| Net cash used in operating activities | ( | ( | |||||||||||||||||||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||||||||||||||
| Proceeds from sale of assets | |||||||||||||||||||||||||||||
| Purchases of property and equipment | ( | ( | |||||||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | |||||||||||||||||||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||||||||||||||
| Cash payments for lease liabilities | ( | ( | |||||||||||||||||||||||||||
| Proceeds from exercise of stock options | |||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | |||||||||||||||||||||||||||
| Payment of taxes related to net share settlement of equity awards | ( | ( | |||||||||||||||||||||||||||
| Net cash used in financing activities | ( | ( | |||||||||||||||||||||||||||
| EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH | ( | ||||||||||||||||||||||||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | ( | ( | |||||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | |||||||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | |||||||||||||||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||||||||||||||||||||||||
| (Refund received) cash paid for income taxes | $ | ( | $ | ||||||||||||||||||||||||||
| Non-cash investing and financing activities | |||||||||||||||||||||||||||||
| Accrued property and equipment purchases | $ | $ | |||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
6
ORASURE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts in thousands)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation and Basis of Presentation
The accompanying interim unaudited consolidated financial statements include the accounts of OraSure Technologies, Inc. (“OraSure”) and its wholly-owned subsidiaries, DNA Genotek Inc. (“DNAG”), Diversigen, Inc. (“Diversigen”), Sherlock Biosciences, Inc. and its wholly-owned subsidiary Sense Biodetection Limited (collectively, "Sherlock"), and BioMedomics, Inc. ("BioMedomics"). Novosanis NV ("Novosanis") was a subsidiary of OraSure until it was legally dissolved in June 2025. All intercompany transactions and balances have been eliminated. References herein to “we,” “us,” “our,” or the “Company” mean OraSure and its consolidated subsidiaries, unless otherwise indicated. The unaudited financial statements, in the opinion of management, include all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the Company's financial position and results of operations for these interim periods. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results of operations expected for the full year.
Summary of Significant Accounting Policies
There have been no changes to the Company's significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 that have had a material impact on the consolidated financial statements and related notes except as discussed herein.
Cash Equivalents & Short-Term Investments
The Company considers all its investments in debt securities to be available-for-sale securities. These securities consist of guaranteed investment certificates purchased with maturities greater than ninety days and are considered short-term investments. Securities with maturities ninety days or less are considered cash equivalents. Available-for-sale securities are carried at fair value, based upon quoted market prices, with unrealized gains and losses, if any, reported in stockholders’ equity as a component of accumulated other comprehensive loss.
The Company maintains cash balances in the United States in excess of the federally insured limits. The Company periodically evaluates financial institutions and believes the risk of loss to be remote due to this evaluation.
Fair Value of Financial Instruments
As of September 30, 2026 and December 31, 2025, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their respective fair values based on their short-term nature.
Fair value measurements of all financial assets and liabilities that are being measured and reported on a fair value basis are required to be classified and disclosed in one of the following three categories:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
7
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
To the extent that valuation is based on models or inputs that are unobservable in the market, determining fair value requires more judgment. Because of the inherent uncertainty of valuation, estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Therefore, the degree of judgment exercised in determining fair value is greatest for assets or liabilities categorized in Level 3. The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis:
| September 30, | December 31, | ||||||||||||||||
| Level | 2026 | 2025 | |||||||||||||||
| Guaranteed investment certificates | 1 | $ | $ | ||||||||||||||
| Trading securities | 1 | ||||||||||||||||
| Contingent consideration: | 3 | ||||||||||||||||
| Current portion | $ | $ | |||||||||||||||
| Long-term portion | |||||||||||||||||
| $ | $ | ||||||||||||||||
Included in cash and cash equivalents at September 30, 2026 and December 31, 2025 was $12.8 million and $13.1 million, respectively, invested in guaranteed investment certificates.
Included in cash and cash equivalents at September 30, 2026 and December 31, 2025, was $50.1 million and $68.4 million, respectively, invested in government money market funds. These funds have investments in U.S. government securities and are measured as Level 1 instruments.
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Contingent Consideration
The Company has identified its contingent consideration obligations as Level 3 liabilities due to significant inputs that are required to measure the fair value of these obligations. The contingent consideration is comprised of three different tranches: milestone payments, royalty payments, and earnout payments. The significant quantitative unobservable inputs for the milestone payments are the discount rate and probability of achieving regulatory approval milestones. In December 2025, the Company submitted a premarket notification, or 510(k), to the U.S. Food and Drug Administration (the “FDA”) for clearance of its rapid molecular self-test for chlamydia trachomatis and Neisseria gonorrhoeae (“CT/NG”) on the Sherlock platform. Following constructive interactions with the FDA, the Company is updating its submission plan for the CT/NG test on the Sherlock platform to incorporate feedback received from the agency. As part of this process, in July 2026, the Company elected to withdraw its current submission and plans to pursue a future submission. Due to this withdrawal, the Company has concluded that it will not obtain FDA clearance by December 31, 2026 as outlined in the terms of the merger agreement. Accordingly, the Company will not be obligated to pay the milestone contingent payments and the milestone contingent consideration liability was reduced to zero . Furthermore, as a result of the delay in the commercialization of the CT/NG product, the royalty based contingent consideration liability was reduced to reflect the delay in recognizing revenue from the sale of the CT/NG product and increase in discount rate associated with the cash flows. During the three and nine months ended September 30, 2026, to reflect these changes in these liabilities, a decrease in the estimated fair value of acquisition-related contingent consideration of $0 and $22.5 million, respectively, was recorded on the Company's consolidated statement of operations.
The fair value methodology for royalty payments is based on a discounted cash flow model. The significant quantitative unobservable inputs include internally developed future expected cash flows, a discount rate and the probability achievement of a milestone of a regulatory approval. The royalty payments represent a mid-single digit percentage of the net sales through 2034 associated with the acquired in-process and research and development intangible asset.
The fair value methodology for earnout payments is based on a Monte Carlo model. Significant quantitative unobservable inputs are future expected cash flows, discount rate and volatility rate.
There has been a net decrease of $17.9 million in the fair value of the Company's contingent consideration from date of acquisition to September 30, 2026 primarily due to the release of the milestone liability and a reduction in royalty liability as described above.
| Fair Value | |||||
| Balance at December 31, 2025 | $ | ||||
| Additions | |||||
| Change in fair value | ( | ||||
| Balance at September 30, 2026 | $ | ||||
The fair value analysis as of September 30, 2026, utilized a 20.4 % discount rate.
Indefinite-Lived Intangible Asset
Indefinite-lived intangible assets are not amortized but rather tested annually for impairment or more frequently if the Company believes that indicators of impairment exist. Current generally accepted accounting principles permit the Company to make a qualitative evaluation about the likelihood of indefinite-lived intangible asset impairment. If the Company concludes that it is more likely than not that the carrying value of an indefinite-lived intangible asset is greater than its fair value, then the Company would be required to perform a quantitative analysis. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the fair value.
In December 2025, the Company submitted a 510(k) to the FDA for clearance of its rapid molecular self-test for CT/NG. Following constructive interactions with the FDA, the Company is updating its submission plan for the CT/NG test on the Sherlock platform to incorporate feedback received from the agency. As part of this process, in July 2026, the Company elected to withdraw its current submission and plans to pursue a future submission. This withdrawal was considered an indicator of impairment, which necessitated review of the facts and circumstances underlying the value of the in-process research and development ("IPR&D") technology intangible asset as of June 30, 2026. The Company performed a quantitative indefinite-lived intangible asset impairment test on the IPR&D technology which concluded that the carrying value of the Company's IPR&D technology was below its fair value indicating there was no impairment as of June 30,
9
2026. The carrying value was 6 % below its fair value. There were no triggering events identified for the three months ended September 30, 2026.
As of September 30, 2026, the IPR&D technology intangible asset was $17.0 million. The impairment analysis used an income approach. The income approach estimates fair value for an asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a required rate of return that reflects the relative risk of achieving the cash flows and the time value of money. The revenue and cash flows assumes CT/NG receives regulatory authorization and market competition of future products is low. The revenues assume market growth will accelerate each year. If there are delays to attaining regulatory approval or successfully launching CT/NG, this could have a negative outcome on the indefinite-lived intangible asset impairment analysis.
The below table illustrates the discount rate sensitivity to the fair value of the IPR&D technology intangible asset when performing the impairment analysis as of June 30, 2026. In the IPR&D technology intangible asset impairment analysis as of June 30, 2026, the impairment analysis utilized a 40% discount rate.
| Discount Rate | ||||||||||||||
| 38.0% | 39.0% | 40.0% | 41.0% | 42.0% | ||||||||||
| $ | $ | $ | $ | $ | ||||||||||
Equity Method Investee
In January 2024, the Company led the Series B financing and entered into wide-ranging strategic distribution agreements with KKR Sapphiros L.P. ("Sapphiros"), a privately held consumer diagnostic portfolio company, and certain of its related entities. Through this relationship, the Company expects to be able to offer a more comprehensive range of low-cost diagnostic tests and molecular sample management solutions to the Company's customers globally. As of September 30, 2026, the Company had funded $30.0 million for its interest in Sapphiros. The Company recorded the investment using the equity method in accordance with Accounting Standards Codification ("ASC") Topic 323, Investments—Equity Method and Joint Ventures—Overall. In accordance with the equity method, the Company's equity investment is presented net of its share of any gains or losses of the investee. The Company has elected as its accounting policy to recognize its share of any income or loss in Sapphiros on a three-month lag. The value of the investment in Sapphiros of $23.8 million as of September 30, 2026 is included in the investment in equity method investee line of the Company's balance sheet. The Company has no unconditional obligations or guarantees to, or in support of, its equity method investee and its operations. In conjunction with the preparation of the Company's September 30, 2026 financial statements, the Company evaluated the investment in Sapphiros for impairment and concluded there was no such impairment. The Company's investment in Sapphiros was valued at $26.0 million as of December 31, 2025.
Related Party
The Company loaned Sapphiros $0.3 million during the year ended December 31, 2025. The loan plus interest is due in December 2026. During the year ended December 31, 2025, the Company entered into an agreement with Sapphiros to assist in the development of certain products for Sapphiros. A total of $1.9 thousand and $0.2 million of products and services revenue was recognized from this agreement for the three and nine months ended September 30, 2026. No
Uncertain Tax Positions
Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions fail to meet the "more likely than not" threshold based on the technical merits of the positions. The Company assesses whether previously unrecognized tax benefits may be recognized when tax positions are (1) more likely than not of being sustained based on their technical merits, (2) effectively settled through examination, negotiation or litigation, or (3) settled through actual expiration of the relevant tax statutes. The assessment of an uncertain tax position requires significant judgment.
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Foreign Currency Transactions
Net foreign exchange gains (losses) resulting from foreign currency transactions for the nine months ended September 30, 2026 and 2025 were $0.1 million and $(0.7 ) million respectively.
Accumulated Other Comprehensive Loss
Change in accumulated other comprehensive loss by component is listed below:
| Foreign Currency | Total | ||||||||||||||||
| Balance at December 31, 2025 | $ | ( | $ | ( | |||||||||||||
| Other comprehensive loss | ( | ( | |||||||||||||||
| Balance at September 30, 2026 | $ | ( | $ | ( | |||||||||||||
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Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The purpose of this update was to require disclosure, in the notes to financial statements, of specified information about certain costs and expenses on a disaggregated basis. The amendments in the ASU are effective for all public business entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The amendments are to be applied either prospectively to financial statements issued for reporting periods after the effective date of the update or retrospectively to any or all prior periods presented in the financial statements. Management is evaluating the impact on the Company's consolidated financial statements.
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. The purpose of this update was to address challenges encountered when applying the guidance in Topic 326, Financial Instruments—Credit Losses, to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. For all business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal periods. The amendments are applied prospectively, and early adoption is permitted. Management does not expect a material impact on the Company's consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software. The purpose of this update was to modernize the accounting for software costs. For all business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal periods. The amendments can be applied prospectively, a modified transition or retrospectively. Early adoption is permitted as of the beginning of an annual reporting period. Management does not expect a material impact on the Company's consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832), Accounting for Government Grants Received by Business Entities. The purpose of this update was to improve US GAAP by establishing authoritative guidance on the accounting for government grants received by business entities. For public business entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The amendments can be applied under a modified prospective approach, a modified retrospective approach, or a retrospective approach. Management is evaluating the impact on the Company's consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements. The purpose of this update was to improve the navigability of the required interim disclosures and clarifying when that guidance is applicable. The update also provides additional guidance on what disclosures should be provided in interim periods and adds a principal that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. For public business entities, the amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. Management is evaluating the impact on the Company's consolidated financial statements.
2. INVENTORIES:
| September 30, | December 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Raw materials | $ | $ | |||||||||||||||||||||
| Work in process | |||||||||||||||||||||||
| Semi-finished goods | |||||||||||||||||||||||
| Finished goods | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
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3. PROPERTY, PLANT, AND EQUIPMENT, NET:
| September 30, | December 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Land | $ | $ | |||||||||||||||||||||
| Buildings and improvements | |||||||||||||||||||||||
| Machinery and equipment | |||||||||||||||||||||||
| Computer equipment and software | |||||||||||||||||||||||
| Furniture and fixtures | |||||||||||||||||||||||
| Construction in progress | |||||||||||||||||||||||
| Accumulated depreciation | ( | ( | |||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:
| September 30, | December 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Payroll and related benefits | $ | $ | |||||||||||||||||||||
| Professional fees | |||||||||||||||||||||||
| Sales tax payable | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
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5. TERMINATION BENEFITS:
Q2 2024 Reduction in Workforce
During the second quarter of 2024, the Company executed a reduction in workforce as the Company notified employees of its intention to consolidate its Novosanis site in Belgium into other locations by the end of December 31, 2024, discontinue the Diversigen molecular services line of business by the end of June 30, 2024, and consolidate facilities by bringing third-party manufacturing activities into its Pennsylvania facilities by the end of the third quarter of 2025.
As of March 31, 2026 the Company had paid the full $1.7 million related to the reduction in workforce. This reduction in workforce was completed by March 31, 2026 and no additional charges were incurred during nine months ended September 30, 2026.
Q3 2024 Reduction in Workforce
During the third quarter of 2024, the Company executed a reduction in workforce as the Company notified certain employees of its intention to discontinue its risk assessment business. Additional employees were notified in the fourth quarter of 2024.
As of September 30, 2026, the Company had $2.7 thousand accrued and had paid $1.2 million related to this reduction in workforce. No additional charges were incurred during the nine months ended September 30, 2026. The Company expects this reduction in workforce to be completed by October 2026.
Q1 2026 Reduction in Workforce
During the first quarter of 2026, the Company executed a reduction in workforce to better align the Company's cost structure. The charges for termination benefits included in the Company's consolidated statements of operations are as follows:
| For the Nine Months Ended September 30, | |||||
| 2026 | |||||
| Cost of products and services sold | $ | ||||
| Research and development | |||||
| Sales and marketing | |||||
| General and administrative | |||||
| $ | |||||
As of September 30, 2026, the Company had $0.1 million accrued and had paid $1.1 million related to the reduction in workforce. No additional charges were incurred during the nine months ended September 30, 2026. The Company expects this reduction in workforce to be completed by February 2027.
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6. REVENUES:
Revenues by Product Line. The following table represents total net revenues by product line:
| HIV | ||
Sample Management Solutions (1) | ||
| HCV | ||
Other products and services revenues (2) | ||
COVID-19 (3) | ||
Risk Assessment Testing (4) | ||
| Net product and services revenues | ||
Non-product and services revenues (5) | ||
| Net revenues | ||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||
(1) Includes Genomics, Microbiome and Colli-Pee® product revenues.
(2) Includes Syphilis, Ebola, and Sickle SCAN® product revenues and single order fulfillment.
(3) Includes COVID-19 Diagnostics and COVID-19 Sample Management Solutions revenues.
(4) Includes substance abuse testing product revenues.
(5) Includes funded research and development contracts, royalty income and grant revenues.
Revenues by Geographic Area. The following table represents total net revenues by geographic area, based on the location of the customer:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Africa | |||||||||||||||||||||||||||||||||||||||||
| Europe | |||||||||||||||||||||||||||||||||||||||||
| Other regions | |||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Customer Concentrations. The following table represents customer concentration risk:
| For the Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| Net Revenues | 2026 | 2025 | |||||||||||||||||||||||||||||||||
Commercial customer(1) | % | N/A | |||||||||||||||||||||||||||||||||
| September 30, | December 31, | ||||||||||||||||||||||||||||||||||
| Accounts Receivable | 2026 | 2025 | |||||||||||||||||||||||||||||||||
Commercial customer (1) | % | % | |||||||||||||||||||||||||||||||||
Commercial customer (1) | % | N/A | |||||||||||||||||||||||||||||||||
(1) Each commercial customer is a different international distributor.
15
The following table represents deferred revenue recognized:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| Deferred Revenue Recognized | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Accrued at beginning of year | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
7. INCOME TAXES:
The components of the income tax expense (benefit) are as follows:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Federal income tax expense | $ | $ | $ | $ | |||||||||||||||||||
| State income tax expense | ( | ||||||||||||||||||||||
| Foreign income tax expense (benefit) | ( | ||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
During the three months ended September 30, 2026 and 2025, the Company recorded income tax expense of $0.7 million and $47.0 thousand, respectively. During the nine months ended September 30, 2026 and 2025, the Company recorded income tax expense of $0.3 million and $1.6 million, respectively. The higher federal and state income tax expense in 2025 is largely due to recording an uncertain tax position for certain tax matters, including penalties and interest. During the three and nine months ended September 30, 2026, the Company had an effective tax rate of (6.0 )% and (1.2 )%, respectively. During the three and nine months ended September 30, 2025, the Company had an effective tax rate of (0.4 )% and (3.4 )%, respectively. The change in the tax in the quarterly periods is largely due to a reduction in the uncertain tax position made in Q3 2025 that did not reoccur in the third quarter of 2026. The increase in the Company's tax rate for the year-to-date period is primarily due to the recording of the uncertain tax positions in 2025 and an estimated increase in foreign pre-tax income in 2026.
Income tax expense reflects taxes due to the taxing authorities and the tax effects of temporary differences between the basis of assets and liabilities recognized for financial reporting and tax purposes, and net operating loss and tax credit carryforwards.
A valuation allowance is recorded to the extent it is more likely than not that some portion or all of the deferred tax assets will not be realized. A full valuation allowance was recorded on the Company’s U.S. and U.K. deferred tax assets as of September 30, 2026 and December 31, 2025.
Uncertain tax positions were approximately $2.0
16
8. EARNINGS (LOSS) PER SHARE:
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed in a manner similar to basic earnings (loss) per share except that the weighted-average number of shares outstanding is increased to include incremental shares from the assumed vesting or exercise of dilutive securities, such as common stock options, unvested restricted stock or performance stock units, unless the impact is anti-dilutive. The number of incremental shares is calculated by assuming that outstanding stock options were exercised and unvested restricted shares and performance stock units were vested, and the proceeds from such exercises or vesting were used to acquire shares of common stock at the average market price during the reporting period. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of excluded items would be anti-dilutive.
For the three months ended September 30, 2026 and 2025, outstanding common stock options, unvested restricted stock, and unvested performance stock units representing 1,729 and 585 shares were excluded from the computation of diluted loss per share.
For the nine months ended September 30, 2026 and 2025, outstanding common stock options, unvested restricted stock, and unvested performance stock units representing 1,179 shares and 605 shares, respectively, were excluded from the computation of diluted loss per share.
9. STOCKHOLDERS' EQUITY:
In March 2025, the Company's Board of Directors authorized a stock repurchase program (the "Repurchase Program") effective March 21, 2025, whereby the Company may purchase up to $40.0 million in shares of its common stock over a period of up to two years . The amount and timing of share repurchases under the Repurchase Program may be carried out at the discretion of the Company's management through various methods in compliance with applicable state and federal securities laws. The Company did not repurchase shares of its common stock under the Repurchase Program during the three months ended September 30, 2026, and the Company repurchased 1.5 million shares during the three months ended September 30, 2025. The Company repurchased 2.4 million and 3.3 million shares of its common stock under the Repurchase Program during the nine months ended September 30, 2026 and 2025, respectively.
The reconciliation of the changes in stockholders' equity for the three and nine months ended September 30, 2026 and 2025 is as follows:
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| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Vesting of restricted stock and performance stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Purchase and retirement of common shares in satisfaction of minimum tax withholdings for vested restricted stock and performance stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased and retired in connection with share repurchase program | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Currency translation adjustments | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Vesting of restricted stock and performance stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Purchase and retirement of common shares in satisfaction of minimum tax withholdings for vested restricted stock and performance stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased and retired in connection with share repurchase program | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Currency translation adjustments | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Common stock issued upon exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock and performance stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Purchase and retirement of common shares in satisfaction of minimum tax withholdings for vested restricted stock and performance stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased and retired in connection with share repurchase program | — | — | — | ||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Currency translation adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
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| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Vesting of restricted stock and performance stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Purchase and retirement of common shares in satisfaction of minimum tax withholdings for vested restricted stock and performance stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Currency translation adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Vesting of restricted stock and performance stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Purchase and retirement of common shares in satisfaction of minimum tax withholdings for vested restricted stock and performance stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased and retired in connection with share repurchase program | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Currency translation adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Vesting of restricted stock and performance stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Purchase and retirement of common shares in satisfaction of minimum tax withholdings for vested restricted stock and performance stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased and retired in connection with share repurchase program | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Currency translation adjustments | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
19
10. BUSINESS SEGMENT INFORMATION:
The Company is organized on the basis of products and services into a single reportable segment. All products and services reside under the same reporting hierarchy. The Company's reportable segment derives its revenues from the sale of diagnostics products and sample management solutions, as described in Note 1 Summary of Significant Accounting Policies. As the Company has only one reportable segment, there are no inter-segment sales or transfers.
The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The CODM uses consolidated net income (loss) as reported in the consolidated statement of operations as the primary measure of the reportable segment's profit or loss. The CODM uses consolidated net income (loss) to assess the performance of the segment and make decisions about resource allocation. Consolidated gross profit and consolidated operating income (loss), as reported in the consolidated statement of operations, are also used by the CODM as measures of segment profit or loss. The CODM uses gross profit to assess the impact of the Company's efforts to achieve manufacturing efficiencies and consolidate its production activities. The CODM uses operating income (loss) to assess the impact of the Company's recent restructurings, reduction in workforce, and efforts to streamline its operations to achieve cost savings. The CODM uses consolidated total assets as the measure of segment assets, as reported on the consolidated balance sheet.
The accounting policies of the Company's reportable segment are the same as those described in Note 1 Summary of Significant Accounting Policies.
The following table represents total long-lived assets by geographic area:
| September 30, | December 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| United States | $ | $ | |||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||
| Canada | |||||||||||||||||||||||
| Other regions | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
20
The following table represents reported segment revenues, segment loss, and significant segment expenses:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of products and services sold (1) | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
Research and development (1) | |||||||||||||||||||||||
Sales and marketing (1) | |||||||||||||||||||||||
General and administrative (1) | |||||||||||||||||||||||
| Change in the estimated fair value of acquisition-related contingent consideration | ( | ||||||||||||||||||||||
| Loss (gain) on sale of assets | ( | ||||||||||||||||||||||
| Operating loss | ( | ( | ( | ( | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Interest revenue | |||||||||||||||||||||||
Other segment items (2) | ( | ||||||||||||||||||||||
| Loss before income taxes and equity investment | ( | ( | ( | ( | |||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Loss on equity investment | ( | ( | ( | ( | |||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1) The tables below represent additional significant segment expense categories.
(2) Includes interest expense and foreign currency gains (losses).
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Stock-based Compensation | |||||||||||||||||||||||||||||||||||||||||
| Cost of products and services sold | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Depreciation & Amortization | |||||||||||||||||||||||||||||||||||||||||
| Cost of products and services sold | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
21
11. BUSINESS COMBINATIONS:
BioMedomics
On November 12, 2025, the Company acquired all of the outstanding stock of BioMedomics, pursuant to the terms of an acquisition agreement (the "Acquisition Agreement"). The Company began operating this entity as of the November 12, 2025 closing date.
The primary reason for the acquisition of BioMedomics was to expand the Company's diagnostic portfolio by adding Sickle SCAN®, a rapid, point-of-need test for sickle cell disease that is sold outside of the United States.
The initial aggregate purchase price of this transaction was funded with cash on hand as shown in the table below:
| Cash paid to BioMedomics | $ | ||||
| Transaction expenses | |||||
| Debt paid off | |||||
| Earnout contingent consideration | |||||
| Expense fund | |||||
| Initial aggregate purchase price | $ | ||||
Pursuant to the Acquisition Agreement, the Company agreed to pay up to $5.0 million of contingent consideration based on the achievement of sales thresholds before December 31, 2031. The acquisition-date fair value of the earnout contingent consideration was $0.2 million. The range of outcome for the earnout contingent consideration is zero to $5.0 million.
During the year ended December 31, 2025, the Company incurred a total of $0.5 million of acquisition related costs, including accounting, legal, and other professional fees, all of which were expensed and reported as a component of general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2025.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date:
| Assets Acquired | |||||
| Other current and non current assets | $ | ||||
| Inventory | |||||
| Operating right-of-use assets | |||||
| Developed technology intangible asset | |||||
| Goodwill | |||||
| Total assets acquired | |||||
| Liabilities Assumed | |||||
| Accounts payable | |||||
| Current liabilities | |||||
| Deferred revenue | |||||
| Operating lease liability | |||||
| Total liabilities assumed | |||||
| Net Assets Acquired | |||||
| Estimated fair value of contingent consideration | ( | ||||
Net Cash Paid (net of cash acquired of $ | $ | ||||
The purchase price was allocated to the tangible assets and identifiable intangible asset acquired and liabilities assumed based on their acquisition-date estimated fair values. The identifiable intangible asset was developed technology. The developed technology was all assigned a ten year useful life.
22
The Company, with the assistance of an independent valuation specialist, assessed the fair value of the intangible asset and contingent consideration of BioMedomics. The fair values recorded as of November 12, 2025 are based on significant inputs that are not observable in the market and thus represent a fair value measurement categorized within Level 3 of the fair value hierarchy.
The fair value of the acquired developed technology was determined using the multi-period excess earnings method, which required judgment in estimating appropriate cash flows, discount rate, survival factor, and remaining useful life.
The fair value of the earnout contingent consideration was determined using the Monte Carlo simulation model, which required judgment in estimating expected revenue, volatility, expected discount rate and risk-free interest rate.
Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the future economic benefits that the Company expects to achieve as a result of the acquisition. The Company believes the goodwill related to the acquisition was a result of BioMedomics providing a product that will enable the Company to leverage the product with existing and new customers. The goodwill is not deductible for income tax purposes.
The Company continues to evaluate the fair value of assets acquired and liabilities assumed. Additional information, which existed as of the acquisition date, but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as a result of the final determination may result in a corresponding adjustment to these assets and liabilities, including goodwill. The determination of the estimated fair values of all assets acquired was completed as of June 30, 2026.
Revenues from BioMedomics consist of sales from the Sickle SCAN® test. Effective as of November 12, 2025, the financial results of BioMedomics are included in the consolidated financial results of the Company. BioMedomics contributed $0.1 million and $1.1 thousand of revenue and net income, respectively, to the consolidated statement of operations for the year ended December 31, 2025.
Unaudited Pro Forma Financial Information
The unaudited pro forma results presented below include the results of the BioMedomics acquisition as if it had been consummated as of January 1, 2025. The unaudited pro forma results include amortization of the acquired intangible asset, stock compensation, and lease expense adjustments to income before income taxes but do not include changes in the fair value of the Company's contingent consideration obligations. Material nonrecurring charges, directly attributable to the transactions, including direct acquisition costs, are also excluded. In addition, the unaudited pro forma results do not include any expected benefits of the acquisitions. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2025.
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2025 | 2025 | ||||||||||||||||||||||||||||
| Net revenues | $ | $ | |||||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | |||||||||||||||||||||||||
23
12. CONTINGENCIES:
Collaborations
Sherlock has active third-party license agreements entered into in order to advance and obtain technologies and services related to the business. Under these licenses, the Company is required to make up to $3.3 million of cash payments upon the achievement of certain scientific and commercial milestones as well as low single digit royalty payments on product sales. The Company has the right to terminate the licenses.
Litigation
From time to time, the Company is involved in certain legal actions arising in the ordinary course of business. In management’s opinion, based upon the advice of counsel, the outcomes of such actions are not expected, individually or in the aggregate, to have a material adverse effect on the Company's future financial position or results of operations.
On November 14, 2024 the Company filed a complaint against NowDiagnostics, Inc. ("NowDx"), Jody Berry ("Berry") and Janean Young ("Young") in the United States District Court for the Eastern District of Pennsylvania alleging misappropriation and misuse of the Company's proprietary information and trade secrets by NowDx, Berry and Young in violation of the Federal Defend Trade Secrets Act and the Pennsylvania Uniform Trade Secrets Act. The complaint also alleges breach of contract and duty of loyalty by Young, unfair competition by NowDx, and tortious interference with contractual relations by Berry and NowDx. NowDx filed Counterclaims against the Company on January 13, 2025 and the Company filed its Answer to the Counterclaims on February 3, 2025. Young filed a Motion to Dismiss the claims against her, which was denied by the court on February 4, 2025. NowDx, Berry, and Young agreed to a preliminary injunction which the Court entered on February 27, 2025. On February 11, 2026, the Court issued an order scheduling trial for January 17, 2027. On October 27, 2026, the parties resolved the litigation in a manner which resulted in a positive outcome for the Company. The Court, upon the parties' agreement, replaced the February 27, 2025, preliminary injunction with a permanent injunction protecting the Company's proprietary information and trade secrets at issue in the case, and dismissed all claims in the case with prejudice.
24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with (i) the Company's unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (ii) the Company's audited consolidated financial statements and related notes and management’s discussion and analysis of financial condition and results of operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 9, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to the Company's plans and strategy for its business and impact and potential impacts on its business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including, without limitation, those factors set forth in the “Risk Factors” section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and the “Risk Factors” section of subsequent Quarterly Reports on Form 10-Q, the Company's actual results or timing of certain events could differ materially from the results or timing described in, or implied by, these forward-looking statements.
Business Overview
The Company's business consists of the development, manufacture, marketing, sale and distribution of simple, easy to use diagnostic products and specimen collection devices using its proprietary technologies. The Company's diagnostic products include tests for diseases including HIV, Hepatitis C, Syphilis, Sickle Cell and COVID-19 that are performed on a rapid basis at the point of care. These products are sold in the United States and internationally to various clinical laboratories, hospitals, clinics, community-based organizations, and other public health organizations, distributors, government agencies, physicians’ offices, and commercial and industrial entities. The Company's HIV and COVID-19 products are also sold in a consumer-friendly format in the over-the-counter ("OTC") market in the U.S. and, in the case of the HIV and HCV products, as a self-test to individuals in a number of other countries, including, for the HIV products, as an oral swab in-home test for HIV-1 and HIV-2 in Europe, and for the HCV products, as an OTC test.
The Company's business also includes sample management solutions and services that are used by clinical laboratories, direct-to-consumer laboratories, researchers, pharmaceutical companies, and animal health service and product providers. The revenues from sample management solutions are derived from product sales to commercial customers and sales into the academic and research markets. Customers span the disease risk management, diagnostics, pharmaceutical, biotech, and companion animal market segments. The Company has also developed collection devices for the emerging microbiome market, which focuses on studying microbiomes and their effect on human and animal health. In June 2026, the Company received FDA 510(k) clearance for its Colli-Pee™•Dx Urine Collection Kit, a prescription device for the at-home self-collection of first-void urine for use with FDA-cleared sexually transmitted infection (STI) molecular assays with which the device has been validated. The device has been validated for use with Roche’s cobas® CT/NG and cobas® TV/MG assays.
Risk Assessment Testing
During the third quarter of 2024, the Company announced the discontinuance of sales of its risk assessment product line, which was completed in the second quarter of 2025 and as such the Company had no sales of its risk assessment products during the three and nine months ended September 30, 2026. There were no sales of the Company's risk assessment products during the three months ended September 30, 2025 and $1.9 million of sales for the nine months ended September 30, 2025. During the first quarter of 2025, the Company sold certain assets that made up the risk assessment product line including certain intellectual property, contracts, permits, and equipment.
25
Results of Operations (all dollar amounts in tables are presented in thousands)
For the three months ended September 30, 2026 compared to September 30, 2025.
CONSOLIDATED NET REVENUES
The table below shows total consolidated net revenues for the three months ended September 30, 2026 and 2025:
Diagnostics (1) | ||
Sample Management Solutions (2) | ||
| Other products and services | ||
| COVID-19 Diagnostics | ||
| Net product and services revenues | ||
Non-product and services revenues (3) | ||
| Net revenues | ||
| For the Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | ||||||||||||||||||||||
| $ | 16,801 | $ | 14,499 | 16 | % | 54 | % | 54 | % | |||||||||||||||||
| 12,498 | 10,306 | 21 | % | 40 | % | 38 | % | |||||||||||||||||||
| 771 | 442 | 74 | % | 2 | % | 2 | % | |||||||||||||||||||
| 22 | 89 | (75) | % | — | % | — | % | |||||||||||||||||||
| 30,092 | 25,336 | 19 | % | 96 | % | 94 | % | |||||||||||||||||||
| 815 | 1,749 | (53) | % | 4 | % | 6 | % | |||||||||||||||||||
| $ | 30,907 | $ | 27,085 | 14 | % | 100 | % | 100 | % | |||||||||||||||||
(1)Includes HIV, HCV, Syphilis, Sickle SCAN® and SureQuick® product revenues.
(2)Includes Genomics, Microbiome, and Colli-Pee® product revenues.
(3)Includes funded research and development contracts, royalty income and grant revenues.
Product and Services Revenues
Consolidated net revenues increased 14% to $30.9 million for the three months ended September 30, 2026, from $27.1 million for the three months ended September 30, 2025.
Sales of the Company's Diagnostics products increased 16% to $16.8 million for the three months ended September 30, 2026, from $14.5 million for the three months ended September 30, 2025. This increase was primarily driven by higher international HIV revenues associated with stabilization in our African markets and timing of customer orders. The company also experienced an increase in domestic and international HCV revenue and revenue in the quarter also included Sickle SCAN® revenues, a new revenue stream acquired through the BioMedomics, Inc. acquisition completed in November 2025.
Sample Management Solutions revenues increased 21% to $12.5 million for the three months ended September 30, 2026, from $10.3 million for the three months ended September 30, 2025. This increase in revenue was driven by key commercial customer growth and timing of specific commercial orders.
Non-Product and Services Revenues
Non-product and services revenues decreased 53% to $0.8 million for the three months ended September 30, 2026, from $1.7 million for the three months ended September 30, 2025, primarily due to the completion of various funded R&D contracts.
CONSOLIDATED OPERATING RESULTS
Consolidated gross profit margin increased to 45.2% for the three months ended September 30, 2026, compared to 43.5% for the three months ended September 30, 2025. The drivers of the margin increase are attributable to better absorption of fixed overhead costs due to operational efficiencies, partially offset by higher scrap and lower non-product revenues which contribute 100% to gross margin.
Consolidated operating loss for the three months ended September 30, 2026 was $13.0 million compared to an operating loss of $16.1 million for the three months ended September 30, 2025.
26
Research and development expenses decreased 25% to $7.6 million for the three months ended September 30, 2026, from $10.1 million for the three months ended September 30, 2025, primarily due to lower costs associated with the development of Company's CT/NG application on its molecular self-test device.
Sales and marketing expenses increased 4% to $6.6 million for the three months ended September 30, 2026 from $6.3 million for the three months ended September 30, 2025.
General and administrative expenses increased 8% to $12.0 million for the three months ended September 30, 2026 from $11.1 million for the three months ended September 30, 2025 largely due to higher legal fees.
All of the above contributed to the Company's operating loss of $13.0 million for the three months ended September 30, 2026, which included non-cash charges of $2.3 million for stock-based compensation and $2.2 million for depreciation and amortization. The Company's operating loss of $16.1 million for the three months ended September 30, 2025, included non-cash charges of $2.8 million for stock-based compensation, $2.5 million for depreciation and amortization and $0.4 million for the change in the estimated fair value of acquisition-related contingent consideration.
OTHER INCOME
Other income for the three months ended September 30, 2026 was $1.2 million compared to $2.8 million for the three months ended September 30, 2025. The decrease in other income is due to lower interest income and lower foreign currency gains.
CONSOLIDATED INCOME TAXES
The Company continues to believe the full valuation allowance established against its total U.S. and U.K. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed. For the three months ended September 30, 2026 and 2025, the Company recorded income tax expense of $0.7 million and $47.0 thousand, respectively. During the three months ended September 30, 2026 and 2025, the Company had an effective tax rate of (6.0)% and (0.4)%, respectively. The decrease in the Company's tax rate was primarily due to the recording of a reduction in an uncertain tax position made in the third quarter of 2025 that did not reoccur in the third quarter of 2026.
27
Results of Operations
For the nine months ended September 30, 2026 compared to September 30, 2025.
CONSOLIDATED NET REVENUES
The table below shows an outline of total consolidated net revenues for the nine months ended September 30, 2026 and 2025:
Diagnostics (1) | ||
Sample Management Solutions (2) | ||
| Other products and services | ||
| COVID-19 Diagnostics | ||
Risk Assessment Testing (3) | ||
| Net product and services revenues | ||
Non-product and services revenues (4) | ||
| Net revenues | ||
| For the Nine Months Ended September 30, | ||||||||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | ||||||||||||||||||||||
| $ | 53,018 | $ | 51,410 | 3 | % | 59 | % | 58 | % | |||||||||||||||||
| 31,431 | 29,271 | 7 | % | 35 | % | 33 | % | |||||||||||||||||||
| 1,702 | 1,059 | 61 | % | 2 | % | 1 | % | |||||||||||||||||||
| 41 | 574 | (93) | % | — | % | 1 | % | |||||||||||||||||||
| — | 1,866 | (100) | % | — | % | 2 | % | |||||||||||||||||||
| 86,192 | 84,180 | 2 | % | 96 | % | 95 | % | |||||||||||||||||||
| 3,279 | 4,078 | (20) | % | 4 | % | 5 | % | |||||||||||||||||||
| $ | 89,471 | $ | 88,258 | 1 | % | 100 | % | 100 | % | |||||||||||||||||
(1)Includes HIV, HCV, Syphilis, Sickle SCAN® and SureQuick® product revenues.
(2)Includes Genomics, Microbiome, and Colli-Pee® product revenues.
(3)Includes substance abuse testing product revenues.
(4)Includes funded research and development contracts, royalty income, and grant revenues.
Product and Services Revenues
Consolidated net revenues increased 1% to $89.5 million for the nine months ended September 30, 2026, from $88.3 million for the nine months ended September 30, 2025.
Sales of the Company's Diagnostics products increased 3% to $53.0 million for the nine months ended September 30, 2026 from $51.4 million for the nine months ended September 30, 2025. This increase is primarily attributable to higher HIV international revenues associated with the Company's near shoring efforts in Africa, stabilization of African markets, and due to the timing of customer orders. The increase in revenues is also driven by higher syphilis sales associated with new customers in the women's health market and the inclusion of Sickle SCAN® revenues, a new revenue stream acquired through the BioMedomics, Inc. acquisition completed in November 2025. These increases in revenues were offset by lower international HCV revenues driven by reduced reimbursement subsidies in the Asian market and a large order shipped into Africa in the second quarter of 2025 that did not recur. Domestic HIV revenues also declined due to lower purchases under the Together Take Me Home program.
Sample Management Solutions revenues increased 7% to $31.4 million for the nine months ended September 30, 2026, from $29.3 million for the nine months ended September 30, 2025. This increase in revenue was largely driven by key commercial customer growth and timing of specific commercial orders.
COVID-19 Diagnostics revenues decreased 93% to $41.0 thousand for the nine months ended September 30, 2026, from $574.0 thousand for the nine months ended September 30, 2025 due to lower overall demand for COVID-19 testing.
Risk Assessment testing revenues was zero for nine months ended September 30, 2026, compared to $1.9 million for the nine months ended September 30, 2025. The Company discontinued this line of business at the end of 2024 and the business wound down in early 2025.
Non-Product and Services Revenues
Non-product and services revenues decreased 20% to $3.3 million for the nine months ended September 30, 2026, from $4.1 million for the nine months ended September 30, 2025, primarily due to the completion of certain funded R&D contracts and due to the timing of the related spend associated with the contracts.
28
CONSOLIDATED OPERATING RESULTS
Consolidated gross profit margin increased to 43.7% for the nine months ended September 30, 2026, from 42.2% for the nine months ended September 30, 2025. The largest driver of the margin improvement is better absorption of fixed overhead costs due to operational efficiencies partially offset by higher scrap expense.
Consolidated operating loss for the nine months ended September 30, 2026 was $30.8 million, compared to a $51.9 million operating loss reported for the nine months ended September 30, 2025. Results for the nine months ended September 30, 2026 benefited from a $22.5 million change in the estimated fair value of acquisition-related contingent consideration but were negatively impacted by higher operating expenses.
Research and development expenses decreased 1% to $30.7 million for the nine months ended September 30, 2026, from $31.1 million for the nine months ended September 30, 2025 largely due to lower spend incurred for clinical trials for the CT/NG and Colli-Pee® devices as the clinical trials were completed in second quarter of 2026.
Sales and marketing expenses increased 2% to $19.9 million for the nine months ended September 30, 2026 from $19.5 million for the nine months ended September 30, 2025.
General and administrative expenses increased 8% to $41.0 million for the nine months ended September 30, 2026, from $37.9 million for the nine months ended September 30, 2025, largely due to higher professional, consulting, and legal fees associated with litigation, and stockholder activism costs.
All of the above contributed to the Company's operating loss of $30.8 million for the nine months ended September 30, 2026, which included non-cash income of $22.5 million reflected in the change in the estimated fair value of acquisition-related contingent consideration, and non-cash charges of $7.3 million for stock-based compensation, and $6.9 million for depreciation and amortization. The Company's operating loss of $51.9 million for the nine months ended September 30, 2025 included a non-cash charge of $8.7 million for stock-based compensation, $7.8 million for depreciation and amortization, and $1.6 million for the change in the estimated fair value of acquisition-related contingent consideration.
29
CONSOLIDATED OTHER INCOME
Other income decreased to $4.1 million for the nine months ended September 30, 2026 from $5.7 million for the nine months ended September 30, 2025. The decrease in other income is due to lower interest income offset by higher foreign currency gains.
CONSOLIDATED INCOME TAXES
The Company continues to believe the full valuation allowance established against its total U.S. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed. The Company has not achieved U.S. cumulative pre-tax earnings based on a rolling three-year window as the Company has not achieved a level of sustained profitability that would, in its judgment, support the release of the valuation allowance. For the nine months ended September 30, 2026 and 2025, the Company recorded income tax expense of $0.3 million and $1.6 million, respectively, reflecting effective tax rates of (1.2)% and (3.4)%, respectively. The increase in the Company's tax rate was primarily due to the recording of an uncertain tax position in 2025 and a estimated increase in foreign pre-tax income in 2026.
Liquidity and Capital Resources
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Cash and cash equivalents | $ | 148,238 | $ | 199,278 | |||||||
| Working capital | 190,191 | 222,113 | |||||||||
The Company's cash and cash equivalents decreased to $148.2 million at September 30, 2026, from $199.3 million at December 31, 2025. The Company has $82.1 million, or 55%, of its $148.2 million of cash and cash equivalents held by DNAG, the Company's Canadian subsidiary.
The Company's working capital decreased to $190.2 million at September 30, 2026, from $222.1 million at December 31, 2025. Working capital is primarily a function of sales, purchase volumes, inventory requirements, and vendor payment terms.
Analysis of the Company's Cash Flows
Operating Activities
During the nine months ended September 30, 2026, net cash used in operating activities was $34.7 million. Cash flows from operations can be significantly impacted by factors such as timing of receipts from customers, inventory purchases, and payments to vendors. The Company's net loss of $29.2 million included a $22.5 million non-cash benefit from the change in the estimated fair value of acquisition-related contingent consideration, partially off set by stock-based compensation expense of $7.3 million, depreciation and amortization expense of $6.9 million, a loss on equity investment of $2.2 million, and other non-cash charges aggregating to $1.2 million.
Cash used by the Company's working capital accounts included an increase in accounts receivable of $8.7 million due to timing of shipments and invoicing and a decrease in deferred revenue of $0.6 million as work on grant projects is completed and earned. These uses of cash were partially offset by an increase in accrued expenses and other liabilities of $3.7 million largely associated with an increase in the company's profit sharing accrual as it builds toward a payout in early 2027, a decrease in prepaid expenses and other assets of $3.0 million resulting from the timing of payment for the Company's insurance renewals, an increase of $1.6 million in accounts payable largely associated with the timing of spend on inventory purchases, and an overall decrease in inventory balances of $0.5 million.
Investing Activities
Net cash used in investing activities was $5.0 million for the nine months ended September 30, 2026, for purchases of property and equipment.
Financing Activities
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Net cash used in financing activities was $8.6 million for the nine months ended September 30, 2026, which was largely comprised of $7.0 million to repurchase common stock pursuant to the Company's stock repurchase plan and $1.5 million used for the repurchase of common stock to satisfy withholding taxes related to the vesting of restricted stock awarded to the Company's employees.
Resources
The Company's contractual obligations are included in Note 12 of its consolidated financial statements. The Company expects existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements over the next twelve months. The Company's cash requirements, however, may vary materially from those now planned due to many factors, including, but not limited to, the scope and timing of future strategic acquisitions, the progress of its research and development programs, the scope and results of clinical testing, the cost of any future litigation, the magnitude of capital expenditures, changes in existing and potential relationships with business partners, the timing and cost of obtaining regulatory approvals, the timing and cost of future stock purchases, the costs involved in obtaining and enforcing patents, proprietary rights and any necessary licenses, the cost and timing of expansion of sales and marketing activities, market acceptance of new products, competing technological and market developments, the impact of the current economic environment and other factors.
Critical Accounting Policies and Estimates
A more detailed review of the Company's critical accounting policies is contained in its Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 9, 2026. No material changes have been made to such critical accounting policies during the nine months ended September 30, 2026.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the Company's assessment of its sensitivity to market risk since its presentation set forth in Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," in its Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of September 30, 2026. Based on that evaluation, the Company’s management, including such officers, concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2026, to provide reasonable assurance that material information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 was accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure and was recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
(b) Changes in Internal Control Over Financial Reporting. There was no change in the Company’s internal control over financial reporting that occurred during the three months ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time, the Company is involved in certain legal actions arising in the ordinary course of business. In management’s opinion, based upon the advice of counsel, the outcomes of such actions are not expected, individually or in the aggregate, to have a material adverse effect on the Company's future financial position or results of operations.
NowDiagnostics Litigation
On November 14, 2024, the Company filed a complaint against NowDiagnostics, Inc. ("NowDx"), Jody Berry ("Berry") and Janean Young ("Young") in the United States District Court for the Eastern District of Pennsylvania alleging
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misappropriation and misuse of the Company's proprietary information and trade secrets by NowDx, Berry and Young in violation of the Federal Defend Trade Secrets Act and the Pennsylvania Uniform Trade Secrets Act. The complaint also alleges breach of contract and duty of loyalty by Young, unfair competition by NowDx, and tortious interference with contractual relations by Berry and NowDx. NowDx filed Counterclaims against the Company on January 13, 2025, and the Company filed its Answer to the Counterclaims on February 3, 2025. Young filed a Motion to Dismiss the claims against her, which was denied by the court on February 4, 2025. NowDx, Berry, and Young agreed to a preliminary injunction which the Court entered on February 27, 2025. On February 11, 2026, the Court issued an order scheduling trial for January 17, 2027. On October 27, 2026, the parties resolved the litigation in a manner which resulted in a positive outcome for the Company. The Court, upon the parties' agreement, replaced the February 27, 2025, preliminary injunction with a permanent injunction protecting the Company's proprietary information and trade secrets at issue in the case, and dismissed all claims in the case with prejudice.
Item 1A. RISK FACTORS
There have been no material changes to the risk factors disclosed in Item 1A, entitled “Risk Factors,” in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 9, 2026.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares that may yet be repurchased under the plans or programs (1) | ||||||||||||||||||||||
| July 1, 2026 - July 31, 2026 | — | $ | — | — | $ | 17,960,005 | ||||||||||||||||||||
| August 1, 2026 - August 31, 2026 | 9,245 | (2) | $ | 4.13 | — | $ | 17,960,005 | |||||||||||||||||||
| September 1, 2026 - September 30, 2026 | 6,188 | (2) | $ | 3.42 | — | $ | 17,960,005 | |||||||||||||||||||
| 15,433 | — | |||||||||||||||||||||||||
(1)In March 2025, the Company's board of directors authorized a stock repurchase program (the “Repurchase Program”) effective March 21, 2025, whereby the Company may purchase up to $40.0 million in shares of its common stock over a period of up to two years. The amount and timing of share repurchases under the Repurchase Program may be carried out at the discretion of management through various methods in compliance with applicable state and federal securities laws.
(2)Represents shares retired to satisfy tax withholdings, in connection with the vesting of restricted and performance shares, pursuant to the OraSure Technologies, Inc. Stock Award Plan.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. MINE SAFETY DISCLOSURES
Not applicable
Item 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
The disclosure set forth in Part II - Item 2 above is incorporated herein by reference.
During the three months ended September 30, 2026, none of the Company's directors or officers adopted terminated
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Item 6. EXHIBITS
| Exhibit Number | Exhibit | |||||||
| 3.1 | Certificate of Amendment to Certificate of Incorporation dated June 3, 2026 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K as filed on June 3, 2026). | |||||||
| 10.1ˆ | Amended and Restated OraSure Technologies, Inc. 2000 Stock Award Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed on June 3, 2026). | |||||||
| 31.1* | Certification of Carrie Eglinton-Manner required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |||||||
| 31.2* | Certification of Kenneth J. McGrath required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |||||||
| 32.1*+ | Certification of Carrie Eglinton-Manner required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2*+ | Certification of Kenneth J. McGrath required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | Inline XBRL Instance Document – the Instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page from Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in exhibits 101). | |||||||
*Filed herewith
ˆ Management contract or compensatory plan or arrangement.
† Pursuant to Item 601(a)(5) of Regulation S-K, certain exhibits have been omitted and will be furnished supplementally to the Securities and Exchange Commission upon request.
+ This certification is deemed not filed for purposes of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| ORASURE TECHNOLOGIES, INC. | ||||||||
| /s/ Kenneth J. McGrath | ||||||||
Date: November 9, 2026 | Kenneth J. McGrath | |||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
| /s/Michele M. Anthony | ||||||||
Date: November 9, 2026 | Michele M. Anthony | |||||||
| Senior Vice President, Controller and Chief Accounting Officer | ||||||||
| (Principal Accounting Officer) | ||||||||
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