Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in Part I, Item 1 of this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties, including those described in the section titled "Special Note Regarding Forward Looking Statements." Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled "Risk Factors."

Overview

Our mission is to imagine and pioneer new ways to decode the biology of the proteome to improve human health. Our product, the Proteograph Product Suite (Proteograph), leverages our proprietary engineered nanoparticle (NP) technology to provide unbiased, deep, rapid and large-scale access to the proteome. The Proteograph Product Suite is an integrated solution that includes consumables, an automation instrument and software. We believe that broader access to the proteome is essential, not only to understanding its complexity and accelerating biological insights, but also to expanding end-markets. These markets may include basic research and discovery, translational research, diagnostics and applied applications. To comprehend the complexity and dynamic nature of the proteome, researchers must perform population-scale, deep, unbiased interrogation of biological samples over time. We believe that this level of interrogation was not previously feasible and that the Proteograph can enable researchers to perform these types of proteomics studies.

Since we were incorporated in 2017, we have devoted substantially all of our resources to research and development activities, including with respect to the Proteograph Product Suite, building our commercial infrastructure including manufacturing, operations, sales and marketing and service and support functions, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, becoming and being a publicly-traded company, and providing general and administrative support for these activities.

Our ability to generate product and service revenue sufficient to achieve profitability, if ever, will depend on the successful commercialization of the Proteograph Product Suite and related products and services. In May 2025, we advanced our commercial offering with the launch of the new Proteograph Product Suite, featuring the Proteograph ONE assay and SP200 automation instrument. With the new Proteograph workflow, we believe we have achieved a transformative milestone by significantly improving the performance and scalability of deep, unbiased proteomic analysis. These advancements push the boundaries of the original capabilities of the Proteograph Product Suite launched in 2021, further addressing limitations in deep, unbiased proteomic workflows, including prohibitive costs of large-scale studies, time-consuming manual workflows, and performance variability introduced by manual handling.

We market and sell the Proteograph Product Suite as an integrated solution comprised of consumables, our automation instrument and software. Our commercial strategy is focused on growing adoption of the Proteograph by researchers in academic and commercial settings, expanding the installed base, increasing utilization to generate revenue from the purchase of Proteograph consumables and growing our service offering through the Seer Technology Access Center (STAC). We expect a highly efficient sales model because our workflow integrates with most existing proteomics laboratories' workflows and also complements large-scale genomics research. We are focused on removing barriers to access to the Proteograph, including through the STAC service offering.

We sell the Proteograph Product Suite through a direct sales channel in the United States, and through both direct and distributor sales channels in regions outside the United States. We have built, and will continue to build our sales, marketing, support and product distribution capabilities. In addition, we will continue to build the necessary infrastructure for these activities in the United States, European Union, the United Kingdom, and other countries and regions, including Asia-Pacific, as we execute on our commercialization strategy for the Proteograph.

We leverage well-established unit operations to formulate and manufacture our NPs at our facilities in Redwood City, California. We procure certain components of our consumables from third-party manufacturers, which includes the commonly available raw materials needed for manufacturing our proprietary engineered NPs. We are currently manufacturing using our production-scale lines and continue to build out our manufacturing capabilities to support broad commercial availability of our products. We obtain some of the reagents and components used in the Proteograph workflow from third-party suppliers. While some of these reagents and components are currently sourced from a single supplier, these products are readily available from numerous suppliers. While we currently perform some filling and packaging of the Proteograph assay and the related consumables, we may eventually have our filling and packaging outsourced to a third party. We conduct vendor and component qualification for components provided by third-party suppliers and quality control tests on our NPs.

We designed the automation instrument and have outsourced its manufacturing to Hamilton Company, a leading manufacturer of automated liquid handling workstations. We have entered into a non-exclusive agreement with Hamilton that covers the manufacturing of the automation instrument and its continued supply on a purchase order basis. Starting in January 2025, we renewed the agreement under an extended term through December 2027. Following this extended term, the agreement will automatically renew annually for a maximum of two one-year renewal periods. Hamilton has represented to us that it maintains ISO 9001 and ISO 13485 certifications.

During the six months ended June 30, 2026 and 2025, we incurred a net loss of $33.7 million and $39.4 million and used $25.0 million and $26.1 million of cash in operations, respectively. As of June 30, 2026, we had an accumulated deficit of $499.7 million, and cash, cash equivalents, and investments of $209.5 million. We expect to continue to incur significant losses and do not expect positive cash flows from operations for the foreseeable future.

Our expenses may increase in connection with our ongoing activities, as we:

Components of Results of Operations

Revenue

Our product revenue consists of an instrument with embedded software essential to the instrument's functionality and consumables. Our service revenue primarily consists of revenue received from the generation and analysis of proteomic data on behalf of the customer. Our related party revenue is comprised of both product sales and services performed for related parties. Other revenue consists of shipping revenue and lease arrangements. Our revenue is generated from customers in the United States and internationally. We intend to focus our commercial efforts in the United States while expanding our international presence.

Cost of Revenue

We utilize third-party manufacturers for production of our instruments and we manufacture our NPs and assemble our assay kits internally. Cost of revenue consists primarily of costs of the components of the Proteograph Product Suite, including the instrument and consumables, costs of services related to the generation and analysis of proteomic data on behalf of our customers, and distribution-related expenses such as logistics and shipping costs. In addition, cost of revenue includes employee compensation, such as stock-based compensation and employee benefits, amortization of capitalized internal-use software, allocated overhead, including depreciation, and charges related to inventory reserves.

Research and Development Expenses

Research and development (R&D) expenses include costs associated with R&D of our technology and product candidates. R&D expenses consist primarily of employee compensation, including stock-based compensation and employee benefits, laboratory supplies used for in-house research, consulting costs, and allocated costs, including rent, depreciation, information technology and utilities.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of employee compensation, including stock-based compensation, and benefits for executive management, sales and marketing, customer support, finance, administrative, human resources, legal functions, allocated costs, including depreciation, professional service fees and other general overhead costs to support our operations.

Other Income (Expense)

Other income (expense) consists primarily of interest income earned on cash, cash equivalents and investments, asset disposals, realized and unrealized gains and losses on foreign currency transactions, and loss in the equity method investment.

Provision for Income Taxes

Income tax expense results from our wholly-owned foreign subsidiaries. We maintain a full valuation allowance on our domestic deferred tax assets as we have concluded that it is more likely than not that the deferred assets will not be realized.

Results of Operations

Comparisons of the Three Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods presented:

Revenue

Revenue for the three months ended June 30, 2026 decreased by $0.9 million, or 23%, compared to the same period in 2025. The decrease was due to lower product sales and service revenue during the period.

Cost of Revenue

Cost of revenue for the three months ended June 30, 2026 decreased by $0.3 million, or 18%, compared to the same period in 2025. The decrease was primarily due to lower revenue.

Research and Development

Research and development expenses for the three months ended June 30, 2026 decreased by $3.8 million, or 32%, compared to the same period in 2025. The decrease was primarily driven by lower employee compensation costs of $1.2 million, stock-based compensation of $1.1 million, laboratory expenses of $0.6 million, and professional services of $0.6 million.

Selling, General and Administrative

Selling, general and administrative expenses for the three months ended June 30, 2026 decreased by $0.5 million, or 5%, compared to the same period in 2025. The decrease was primarily driven by lower employee compensation costs of $1.1 million and stock-based compensation of $1.1 million, partially offset by higher professional services of $2.0 million.

Total Other Income

Total other income for the three months ended June 30, 2026 decreased by $1.2 million or 104%, compared to the same period in 2025. The decrease was mainly due to lower rates of interest earned on cash invested in money market funds, U.S. Treasury securities, U.S. Non-Treasury securities, commercial paper, and corporate debt securities and a higher loss from equity method investment.

Comparisons of the Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods presented:

Revenue

Revenue for the six months ended June 30, 2026 decreased by $2.4 million, or 29%, compared to the same period in 2025. The decrease was due to lower product sales and service revenue during the period.

Cost of Revenue

Cost of revenue for the six months ended June 30, 2026 decreased by $0.7 million, or 17%, compared to the same period in 2025. The decrease was primarily due to lower service revenue.

Research and Development

Research and development expenses for the six months ended June 30, 2026 decreased by $6.3 million, or 27%, compared to the same period in 2025. The decrease was primarily driven by lower employee compensation costs of $2.2 million, stock-based compensation of $2.2 million, professional services of $0.9 million, laboratory expenses of $0.5 million, and depreciation expense of $0.4 million.

Selling, General and Administrative

Selling, general and administrative expenses for the six months ended June 30, 2026 decreased by $2.5 million, or 11%, compared to the same period in 2025. The decrease was primarily driven by lower stock-based compensation of $2.5 million and employee compensation costs of $1.7 million, partially offset by higher professional services of $2.0 million.

Total Other Income

Total other income for the six months ended June 30, 2026, decreased by $1.7 million or 81%, compared to the same period in 2025. The decrease was mainly due to the loss in the equity method investment and lower rates of interest earned on cash invested in money market funds, U.S. Treasury securities, U.S. Non-Treasury securities, commercial paper, and corporate debt securities and a higher loss from equity method investment.

Liquidity and Capital Resources

Since the date of our incorporation, we have incurred significant operating losses and negative cash flows from operations. Our operations have been funded primarily through the sale and issuance of equity securities since inception. We anticipate that we will continue to incur net losses and do not expect positive cash flows from operations for the foreseeable future. However, based on our cash, cash equivalents and investments, we believe we will have adequate liquidity over the next twelve months following the date of this Quarterly Report to operate our business and to meet our cash requirements. If our available cash, cash equivalents and investments and anticipated cash flows from operations are insufficient to satisfy our liquidity requirements, we may consider raising additional capital to expand our business, pursue strategic investments, take advantage of financing opportunities or for other reasons.

We enter into agreements as part of the normal course of business with various vendors, which are generally cancellable without material penalty upon written notice. Payments associated with these agreements are not included in this discussion of contractual obligations.

Our operating lease obligations reflect our lease obligations for our office and laboratory space in Redwood City, California. We lease approximately 51,000 square feet of office and laboratory space in Redwood City, California, and the lease is set to end on September 30, 2032 with an option to renew for an additional five-year term at then-current market rates. We maintain a letter of credit issued to the lessor in the amount of $0.5 million as of each of June 30, 2026 and December 31, 2025, which is secured by restricted cash and is presented as noncurrent at each date based on the term of the underlying lease.

From time to time, we have certain purchase commitments related to our inventory management, cloud-based information systems, property and equipment maintenance and support services, and various other products and services over periods that extend beyond one year. The contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude orders for goods and services entered into in the normal course of business that are not enforceable or subject to change. These outstanding commitments were nil as of June 30, 2026.

We take a long-term view in growing and scaling our business and regularly review opportunities that meet our long-term growth objectives. Our future capital requirements will depend on many factors including our revenue growth rate, investments in continued commercialization efforts, acquisitions of complementary or enhancing technologies or businesses, including intellectual property rights, the timing and extent of additional capital expenditures to invest in existing and new facilities and equipment, the expansion of sales and marketing and international activities and the extent and magnitude of our ongoing research and development programs.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Operating Activities

During the six months ended June 30, 2026, cash used in operating activities was $25.0 million, attributable to a net loss of $33.7 million and a net change in our operating assets and liabilities of $2.2 million, partially offset by non-cash charges of $11.0 million. Non-cash charges primarily consisted of $3.8 million of loss on equity method investment, $3.7 million of stock-based compensation, and $3.0 million of depreciation and amortization. The change in our operating assets and liabilities was primarily driven by decreases in accounts payable of $2.6 million and accrued liabilities and other liabilities of $2.1 million, partially offset by a decrease of accounts receivable of $2.5 million.

During the six months ended June 30, 2025, cash used in operating activities was $26.1 million, attributable to a net loss of $39.4 million and a net change in our operating assets and liabilities of $3.5 million, partially offset by non-cash charges of $16.8 million. Non-cash charges primarily consisted of $8.5 million of stock-based compensation, $3.4 million of loss on equity method investment, $3.1 million of depreciation and amortization, $0.8 million of net amortization of premium on available-for-sale securities, and $0.8 million of loss on disposal of property and equipment. The change in our operating assets and liabilities was primarily due to a decrease of accrued liabilities and other liabilities of $1.9 million and a decrease of accounts payable of $1.8 million.

Investing Activities

During the six months ended June 30, 2026, cash provided by investing activities was $6.6 million, which was attributable to the proceeds from maturities of available-for-sale securities of $86.6 million. This was offset by the purchases of available-for-sale securities of $78.0 million, purchase of investment in equity security of $1.5 million, purchases of property and equipment, primarily for laboratory equipment, of $0.3 million, and purchase of investment in SAFE of $0.3 million.

During the six months ended June 30, 2025, cash provided by investing activities was $32.0 million, which was attributable to the proceeds from maturities of available-for-sale securities of $133.0 million and proceeds from disposal of property and equipment of $0.4 million. This was offset by the purchases of available-for-sale securities of $100.2 million and purchases of property and equipment, primarily for laboratory equipment, of $1.2 million.

Financing Activities

During the six months ended June 30, 2026, cash used in financing activities was $2.8 million, which was primarily attributable to the repurchases of Class A common stock under our share repurchase program of $3.0 million, partially offset by the proceeds from the issuance of Class A common stock in connection with the employee stock purchase plan of $0.1 million.

During the six months ended June 30, 2025, cash used in financing activities was $8.7 million, which was primarily attributable to the repurchases of Class A common stock under our share repurchase program of $8.1 million and the tax withholding payments related to net settlement of restricted stock units of $0.8 million. This was partially offset by primarily the proceeds of $0.2 million from the issuance of Class A common stock in connection with the employee stock purchase plan.

Critical Accounting Policies, Significant Judgments and Use of Estimates

The discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no significant changes in our critical accounting policies and estimates as discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Recent Accounting Pronouncements

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition of results of operations.