RESTRUCTURING

6 Months Ended

Jun. 30, 2026

Restructuring and Related Activities [Abstract]


NOTE 5. RESTRUCTURING


2025 Restructuring

In the first quarter of 2025, we implemented an expense reduction initiative aimed at lowering our annualized run-rate operating expenses. These actions, which included workforce reductions and other cost-saving measures, were part of a broader strategic shift to prioritize the adoption of HiFi sequencing.

A summary of the pre-tax restructuring charges are as follows:


(In thousands)	Cumulative amount incurred to date
Employee separation costs	$	4,787
Other costs	1,076
Total restructuring charges (1)	$	5,863

(1) Cumulative charges incurred to date include $3.8 million in sales, general and administrative expense and $2.1 million in research and development expense.

Charges included employee separation costs comprised of approximately $2.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification Act and approximately $2.3 million of severance costs.

Charges included in other costs are primarily related to legal expenses incurred in connection with employee separation matters.

In connection with the restructuring and strategic shift, we incurred an additional $389.9 million in costs. These primarily include $359.3 million of accelerated amortization of certain intangible assets, $15.0 million of IPR&D impairment charges, charges of $8.1 million related to excess inventory due to decreased external demand, $3.9 million for estimated losses on purchase commitments tied to anticipated future excess inventory included in cost of revenue, and $3.1 million of accelerated depreciation of fixed assets. See Note 3. Balance Sheet Components for additional information on the IPR&D impairment assessment and the change in estimated useful life of the intangible asset and accelerated amortization.

A summary of the liabilities related to the restructuring is as follows:


(In thousands)	Other Costs
Amount recorded in current liabilities as of December 31, 2025	$	389
Cash paid during 2026	(389)
Amount recorded in current liabilities as of June 30, 2026	$	—

Estimated total restructuring costs to still be incurred	$	—

During the six months ended June 30, 2026 no further restructuring charges related to the 2025 restructuring were incurred.


2024 Restructuring

In the second quarter of 2024, we implemented an expense reduction initiative that included workforce reductions, the closing of our San Diego office, and other actions to reduce annualized run-rate operating expenses. We recognized approximately $0.9 million of expense related to the 2024 restructuring during the six months ended June 30, 2025. See Note 6 – Restructuring in Part II, Item 8 of the 2025 Annual Report for information regarding the 2024 restructuring initiative.

During the six months ended June 30, 2026 no further restructuring charges related to the 2024 restructuring were incurred.