The Company leases office and laboratory facilities in the U.S., including in South San Francisco, San Diego and Morgan Hill, California and Austin, Texas, and, prior to August 2025, in Marseille, France. Effective August 2025, in connection with the restructuring proceeding in Veracyte SAS, the Company is no longer a party to the lease in Marseille, France. The lease terms of the Company’s leases as of September 30, 2026 extend to March 2040 and contain extension of lease terms and expansion options. The leases have a weighted average remaining lease term of 10.6 years as of September 30, 2026. The Company had deposits of $1.6 million included in long-term assets as of both September 30, 2026 and December 31, 2025 restricted from withdrawal and held by banks in the form of collateral for irrevocable standby letters of credit held as security for the leases.

The Company determined its operating lease liabilities using payments through their current expiration dates and a weighted average discount rate of 11.4% based on the rate that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments in a similar economic environment. Operating lease liabilities along with the associated right-of-use assets are disclosed in the accompanying condensed consolidated balance sheets. The Company classified its deferred rent for tenant improvements with its operating lease right-of-use assets on the consolidated balance sheets.


Year Ending December 31,	Amounts
Remainder of 2026	$	1,705
2027	7,321
2028	7,388
2029	6,858
2030	7,055
Thereafter	40,406
Total future minimum lease payments	70,733
Less: amount representing interest	29,997
Present value of future lease payments	40,736
Less: short-term lease liabilities	6,814
Long-term lease liabilities	$	33,922

The Company recognizes operating lease expense on a straight-line basis over the non-cancelable lease period. The following table summarizes operating lease expense and cash paid for amounts included in the measurement of lease liabilities (in thousands of dollars):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Operating lease expense	$	1,750	$	1,912	$	5,288	$	6,274
Cash paid for amounts included in the measurement of lease liabilities	$	1,057	$	1,722	$	2,715	$	5,620

From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. Although the outcomes of such matters cannot be predicted with certainty, the Company believes there is no litigation pending that could have, either individually or in the aggregate, a material adverse impact on the Company's consolidated financial statements.

On May 1, 2025, the Company filed a complaint in federal court in the Eastern District of Texas alleging that Sonic Healthcare USA, Inc., the healthcare company that is believed to offer ThyroSeq v3, is infringing three of the Company’s patents related to molecular testing of thyroid nodules. The complaint seeks treble damages, attorneys’ fees and costs as well as injunctive relief. On June 4, 2025, the Company filed an amended complaint asserting two additional patents. On July 21, 2025, Sonic Healthcare USA, Inc. filed an answer and a motion to dismiss. The court denied Sonic Healthcare USA, Inc.’s motion to dismiss on January 20, 2026. The parties attended the claim construction hearing on July 15, 2026. On July 21, 2026 and October 22, 2026, ex parte reexaminations of two of the asserted patents were granted by the United States Patent and Trademark Office. Both parties filed summary judgment motions on October 26, 2026. The jury trial in the litigation is currently scheduled for the first quarter of next year.