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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-35092
EXACT SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware02-0478229
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
5505 Endeavor Lane, Madison WI
53719
(Address of principal executive offices)(Zip Code)
(608) 535-8815 (Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareEXASThe Nasdaq Stock Market LLC
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically, if any, 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 ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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☒Accelerated filer ☐
Non-accelerated filer☐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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 30, 2024, the registrant had 184,769,862 shares of common stock outstanding.


EXACT SCIENCES CORPORATION
INDEX
Page
Number

2
EXACT SCIENCES CORPORATION
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share data - unaudited)
Part I — Financial Information
June 30, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$530,180 $605,378 
Marketable securities416,602 172,266 
Accounts receivable, net263,865 203,623 
Inventory127,373 127,475 
Prepaid expenses and other current assets114,467 85,627 
Total current assets1,452,487 1,194,369 
Long-term Assets:
Property, plant and equipment, net703,083 698,354 
Operating lease right-of-use assets139,807 143,708 
Goodwill2,366,972 2,367,120 
Intangible assets, net1,843,478 1,890,396 
Other long-term assets, net167,468 177,387 
Total assets$6,673,295 $6,471,334 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$52,980 $78,816 
Accrued liabilities302,540 341,683 
Operating lease liabilities, current portion27,096 29,379 
Convertible notes, net, current portion
248,923 — 
Debt, current portion— 50,000 
Other current liabilities37,103 14,823 
Total current liabilities668,642 514,701 
Long-term liabilities:
Convertible notes, net, less current portion
2,317,948 2,314,276 
Other long-term liabilities326,678 335,982 
Operating lease liabilities, less current portion167,665 161,070 
Total liabilities3,480,933 3,326,029 
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value Authorized—5,000,000; shares issued and outstanding—no shares at June 30, 2024 and December 31, 2023
— — 
Common stock, $0.01 par value Authorized—400,000,000; shares issued and outstanding—184,668,188 and 181,364,180 shares at June 30, 2024 and December 31, 2023
1,848 1,815 
Additional paid-in capital6,786,668 6,611,237 
Accumulated other comprehensive income (loss)
(943)1,428 
Accumulated deficit(3,595,211)(3,469,175)
Total stockholders’ equity3,192,362 3,145,305 
Total liabilities and stockholders’ equity$6,673,295 $6,471,334 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share data - unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenue$699,264 $622,093 $1,336,788 $1,224,543 
Operating expenses
Cost of sales (exclusive of amortization of acquired intangible assets)189,848 156,991 359,949 313,857 
Research and development120,884 104,095 231,492 199,514 
Sales and marketing185,270 176,490 377,635 363,454 
General and administrative201,856 237,965 444,973 455,260 
Amortization of acquired intangible assets23,311 22,929 46,622 45,857 
Impairment of long-lived assets8,152 552 12,598 621 
Total operating expenses729,321 699,022 1,473,269 1,378,563 
Other operating income3,800 — 3,532 — 
Loss from operations(26,257)(76,929)(132,949)(154,020)
Other income (expense)
Investment income, net
11,801 4,828 18,014 5,318 
Interest income (expense), net
111 (7,818)(7,832)(3,711)
Total other income (expense)11,912 (2,990)10,182 1,607 
Net loss before tax(14,345)(79,919)(122,767)(152,413)
Income tax expense
(1,463)(1,107)(3,269)(2,764)
Net loss$(15,808)$(81,026)$(126,036)$(155,177)
Net loss per share—basic and diluted$(0.09)$(0.45)$(0.69)$(0.87)
Weighted average common shares outstanding—basic and diluted184,313 180,204 183,332 179,393 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Comprehensive Loss
(Amounts in thousands - unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net loss
$(15,808)$(81,026)$(126,036)$(155,177)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on available-for-sale investments(138)937 (925)3,904 
Foreign currency adjustment
(306)59 (1,446)609 
Comprehensive loss$(16,252)$(80,030)$(128,407)$(150,664)
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity
(Amounts in thousands, except share data - unaudited)
Common StockAdditional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated DeficitTotal Stockholders’ Equity
Number of Shares
$0.01
Par Value
Balance, January 1, 2024181,364,180 $1,815 $6,611,237 $1,428 $(3,469,175)$3,145,305 
Exercise of common stock options, net of shares withheld for taxes71,537 1 (1,409)— — (1,408)
Issuance of common stock upon settlement of restricted stock awards, net of shares withheld for taxes1,792,087 17 (61)— — (44)
Issuance of common stock to fund the Company’s 2023 401(k) match
617,384 6 40,544 — — 40,550 
Stock-based compensation expense— — 60,370 — — 60,370 
Net loss— — — — (110,228)(110,228)
Other comprehensive loss
— — — (1,927)— (1,927)
Balance, March 31, 2024183,845,188 $1,839 $6,710,681 $(499)$(3,579,403)$3,132,618 
Exercise of common stock options, net of shares withheld for taxes8,184 1 42 — — 43 
Issuance of common stock upon settlement of restricted stock awards, net of shares withheld for taxes210,590 2 (6)— — (4)
Stock-based compensation expense— — 56,555 — — 56,555 
Purchase of employee stock purchase plan shares604,226 6 19,396 — — 19,402 
Net loss— — — — (15,808)(15,808)
Other comprehensive loss
— — — (444)— (444)
Balance, June 30, 2024184,668,188 $1,848 $6,786,668 $(943)$(3,595,211)$3,192,362 

6
EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity
(Amounts in thousands, except share data - unaudited)
Common StockAdditional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated DeficitTotal Stockholders’ Equity
Number of Shares
$0.01
Par Value
Balance, January 1, 2023177,925,631 $1,780 $6,311,644 $(5,236)$(3,265,026)$3,043,162 
Exercise of common stock options, net of shares withheld for taxes88,228 1 963 — — 964 
Issuance of common stock upon settlement of restricted stock awards, net of shares withheld for taxes1,299,071 13 (13)— — — 
Issuance of common stock to fund the Company’s 2022 401(k) match517,215 5 35,072 — — 35,077 
Stock-based compensation expense— — 49,139 — — 49,139 
Net loss— — — — (74,151)(74,151)
Other comprehensive income
— — — 3,517 — 3,517 
Balance, March 31, 2023179,830,145 $1,799 $6,396,805 $(1,719)$(3,339,177)$3,057,708 
Exercise of common stock options36,728 1 851 — — 852 
Issuance of common stock upon settlement of restricted stock awards, net of shares withheld for taxes134,002 1 (1)— — — 
Issuance of common stock to fund the Company’s 2022 401(k) match335 — 23 — — 23 
Stock-based compensation expense— — 61,725 — — 61,725 
Purchase of employee stock purchase plan shares544,453 5 16,339 — — 16,344 
Net loss— — — — (81,026)(81,026)
Other comprehensive income— — — 996 — 996 
Balance, June 30, 2023180,545,663 $1,806 $6,475,742 $(723)$(3,420,203)$3,056,622 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands - unaudited)
Six Months Ended June 30,
20242023
Cash flows from operating activities:
Net loss$(126,036)$(155,177)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation60,319 54,325 
Loss on non-marketable and marketable equity investments
1,115 4,741 
Deferred tax expense
2,225 672 
Stock-based compensation116,925 110,864 
Gain on settlements of convertible notes, net(10,254)(10,324)
Amortization of acquired intangible assets46,622 45,857 
Impairment of long-lived assets12,598 621 
Remeasurement of contingent consideration from sale of asset
(3,532)— 
Remeasurement of contingent consideration liabilities(7,636)(4,687)
Non-cash lease expense14,042 13,777 
Other(2,667)3,965 
Changes in assets and liabilities:
Accounts receivable, net(60,901)(20,492)
Inventory, net96 (12,531)
Operating lease liabilities(12,957)(12,766)
Accounts payable and accrued liabilities(17,865)48,754 
Other assets2,719 (9,624)
Other liabilities9,941 4,234 
Net cash provided by operating activities
24,754 62,209 
Cash flows from investing activities:
Purchases of marketable securities(324,372)(50,656)
Maturities and sales of marketable securities80,335 270,825 
Purchases of property, plant and equipment(73,515)(64,081)
Purchases of non-marketable investments
(810)(6,173)
Other investing activities(205)(500)
Net cash provided by (used in) investing activities
(318,567)149,415 
Cash flows from financing activities:
Proceeds from exercise of common stock options, net of cash paid for taxes(1,365)1,816 
Proceeds in connection with the Company’s employee stock purchase plan19,402 16,344 
Proceeds from issuance of convertible notes266,750 137,976 
Payments on accounts receivable securitization facility(50,000)— 
Other financing activities(13,186)(6,499)
Net cash provided by financing activities
221,601 149,637 
Effects of exchange rate changes on cash and cash equivalents(1,446)609 
Net increase (decrease) in cash, cash equivalents and restricted cash(73,658)361,870 
Cash, cash equivalents and restricted cash, beginning of period609,675 242,790 
Cash, cash equivalents and restricted cash, end of period$536,017 $604,660 


8
EXACT SCIENCES CORPORATION
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands - unaudited)
Six Months Ended June 30,
20242023
Supplemental disclosure of non-cash investing and financing activities
Property, plant and equipment acquired but not paid$12,442 $7,850 
Supplemental disclosure of cash flow information:
Interest paid$11,971 $7,385 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$530,180 $604,363 
Restricted cash — included in other long-term assets, net
5,837 297 
Total cash, cash equivalents and restricted cash$536,017 $604,660 
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Exact Sciences Corporation (together with its subsidiaries, “Exact,” or the “Company”) was incorporated in February 1995. A leading provider of cancer screening and diagnostic tests, Exact Sciences gives patients and health care professionals the clarity needed to take life-changing action earlier. Building on the success of the Cologuard® and Oncotype DX® tests, Exact Sciences is investing in its pipeline to develop innovative solutions for use before, during, and after a cancer diagnosis.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements, which include the accounts of the Company and those of its wholly owned subsidiaries and variable interest entities, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K (the “2023 Form 10-K”). All intercompany transactions and balances have been eliminated upon consolidation. These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States of America (“U.S.”) and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair statement of its financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2023 has been derived from audited financial statements, but does not contain all of the footnote disclosures from the 2023 Form 10-K. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited financial statements and related notes included in the 2023 Form 10-K.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that affect the Company’s financial statements materially and involve difficult, subjective or complex judgments by management, and actual results could differ from those estimates. These estimates include revenue recognition, valuation of intangible assets and goodwill, contingent consideration, and accounting for income taxes. The Company’s critical accounting policies and estimates are explained further in the notes to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q and the 2023 Form 10-K.
Significant Accounting Policies
During the six months ended June 30, 2024, there were no changes to the Company’s significant accounting policies as described in the Company’s 2023 Form 10-K, except as described in the Recently Adopted Accounting Pronouncements sections below.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-02: Codification Improvement – Amendments to Remove References to the Concepts Statements. This update amends the Accounting Standards Codification (“ASC”) to remove references to various FASB Concepts Statements. The Company early adopted and prospectively applied the amendments in this update during the first quarter of fiscal year 2024. There was no significant impact to the Company’s condensed consolidated financial statements.
10
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Recently Issued Accounting Pronouncements Not Yet Adopted
In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This update modifies the disclosure or presentation requirements of a variety of topics in the ASC to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification. The amendments in this update should be applied prospectively, and the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or S-K becomes effective. However, if the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update improves reportable segment disclosure requirements, primarily through enhanced disclosures of significant segment expenses. The amendments in this update should be applied retrospectively to all prior periods presented in the consolidated financial statements and are effective for fiscal years beginning after December 31, 2023 and interim periods within fiscal years beginning after December 31, 2024. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. This update improves income tax disclosure requirements, primarily through enhanced transparency and decision usefulness of disclosures. The amendments in this update should be applied prospectively with the option to apply retrospectively and are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements.
Net Loss Per Share
Basic net loss per common share (“EPS”) was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share is the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive as a result of the Company’s losses.
The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses for each period:
June 30,
(In thousands)20242023
Shares issuable upon conversion of convertible notes26,526 23,231 
Shares issuable upon the release of restricted stock awards7,781 6,590 
Shares issuable upon the release of performance share units2,104 1,569 
Shares issuable upon exercise of stock options1,128 1,366 
37,539 32,756 

(2) REVENUE
The Company’s revenue is primarily generated by its laboratory testing services utilizing its Cologuard and Oncotype® tests. The services are considered completed upon release of a patient’s test result to the ordering healthcare provider.
11
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table presents the Company’s revenues disaggregated by revenue source:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2024202320242023
Screening
Medicare Parts B & C$195,337 $176,016 $369,127 $347,746 
Commercial283,729 245,748 537,872 478,781 
Other52,540 41,023 99,405 79,455 
Total Screening531,606 462,787 1,006,404 905,982 
Precision Oncology
Medicare Parts B & C$47,467 $47,588 $95,517 $94,969 
Commercial49,187 46,212 95,887 91,144 
International46,722 35,586 91,255 72,854 
Other24,282 27,788 47,725 53,639 
Total Precision Oncology167,658 157,174 330,384 312,606 
COVID-19 Testing$— $2,132 $— $5,955 
Total$699,264 $622,093 $1,336,788 $1,224,543 
Screening revenue primarily includes laboratory service revenue from Cologuard and Prevention Genetics, LLC (“PreventionGenetics”) tests while Precision Oncology revenue primarily includes laboratory service revenue from global Oncotype DX and therapy selection tests.
At each reporting period end, the Company conducts an analysis of the estimates used to calculate the transaction price to determine whether any new information available impacts those estimates made in prior reporting periods. Adjustments to revenue recognized during the period relating to prior period estimates were less than 1% of revenue recorded in the Company’s condensed consolidated statement of operations for the three and six months ended June 30, 2024. Adjustments to revenue recognized during the period relating to prior period estimates were less than 2% of revenue recorded in the Company’s condensed consolidated statement of operations for the three and six months ended June 30, 2023.
The Company’s deferred revenue, which is reported in other current liabilities in the Company’s condensed consolidated balance sheets, was not significant as of June 30, 2024 and December 31, 2023.
Revenue recognized for the three and six months ended June 30, 2024 and 2023 that was included in the deferred revenue balance at the beginning of the period was not significant.

12
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(3) MARKETABLE SECURITIES
The following table sets forth the Company’s cash, cash equivalents, and marketable securities at June 30, 2024 and December 31, 2023:
(In thousands)June 30, 2024December 31, 2023
Cash and cash equivalents
Cash and money market$519,836 $530,100 
Cash equivalents10,344 75,278 
Total cash and cash equivalents530,180 605,378 
Marketable securities
Available-for-sale debt securities$414,271 $168,425 
Equity securities2,331 3,841 
Total marketable securities416,602 172,266 
Total cash, cash equivalents and marketable securities$946,782 $777,644 
Available-for-sale debt securities, including the classification within the condensed consolidated balance sheet at June 30, 2024, consisted of the following:
(In thousands)Amortized CostGains in Accumulated Other Comprehensive Income (Loss) (1)Losses in Accumulated Other Comprehensive Income (Loss) (1)Estimated Fair Value
Cash equivalents
U.S. government agency securities$10,344 $— $— $10,344 
Total cash equivalents10,344 — — 10,344 
Marketable securities
Corporate bonds$203,728 $160 $(600)$203,288 
U.S. government agency securities118,753 3 (130)118,626 
Asset backed securities87,718 21 (325)87,414 
Commercial paper4,943 — — 4,943 
Total marketable securities415,142 184 (1,055)414,271 
Total available-for-sale securities$425,486 $184 $(1,055)$424,615 
______________
(1)There was no tax impact from the gains and losses in accumulated other comprehensive income (loss) (“AOCI”).
13
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Available-for-sale debt securities, including the classification within the condensed consolidated balance sheet at December 31, 2023, consisted of the following:
(In thousands)Amortized CostGains in Accumulated Other Comprehensive Income (Loss) (1) Losses in Accumulated Other Comprehensive Income (Loss) (1)Estimated Fair Value
Cash equivalents
Commercial paper$72,243 $— $— $72,243 
U.S. government agency securities3,035 — — 3,035 
Total cash equivalents75,278 — — 75,278 
Marketable securities
U.S. government agency securities$56,594 $166 $(44)$56,716 
Corporate bonds55,712 175 (59)55,828 
Asset backed securities35,081 65 (249)34,897 
Commercial paper
20,984 — — 20,984 
Total marketable securities168,371 406 (352)168,425 
Total available-for-sale securities$243,649 $406 $(352)$243,703 
______________
(1)There was no tax impact from the gains and losses in AOCI.
The following table summarizes contractual underlying maturities of the Company’s available-for-sale debt securities at June 30, 2024:
Due one year or lessDue after one year through five years
(In thousands)CostFair ValueCostFair Value
Cash equivalents
U.S. government agency securities$10,344 $10,344 $— $— 
Total cash equivalents10,344 10,344 — — 
Marketable securities
U.S. government agency securities$108,950 $108,844 $9,803 $9,782 
Corporate bonds46,393 46,288 157,335 157,000 
Asset backed securities5,901 5,892 81,817 81,522 
Commercial paper
4,943 4,943 — — 
Total marketable securities166,187 165,967 248,955 248,304 
Total available-for-sale securities$176,531 $176,311 $248,955 $248,304 
14
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the gross unrealized losses and fair values of available-for-sale debt securities in an unrealized loss position as of June 30, 2024 aggregated by investment category and length of time those individual securities have been in a continuous unrealized loss position:
Less than one yearOne year or greaterTotal
(In thousands)Fair ValueGross Unrealized LossFair ValueGross Unrealized LossFair ValueGross Unrealized Loss
Marketable securities
Corporate bonds$129,953 $(578)$4,720 $(22)$134,673 $(600)
U.S. government agency securities108,835 (108)3,913 (22)112,748 (130)
Asset backed securities53,722 (211)6,532 (114)60,254 (325)
Total available-for-sale securities$292,510 $(897)$15,165 $(158)$307,675 $(1,055)
The Company evaluates investments that are in an unrealized loss position for impairment as a result of credit loss. It was determined that no credit losses exist as of June 30, 2024 and December 31, 2023 because the change in market value for those securities in an unrealized loss position resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers.
The gains and losses recorded on available-for-sale debt securities and equity securities are included in investment income, net in the Company’s condensed consolidated statements of operations. The gains and losses recorded were not material for the three and six months ended June 30, 2024 and 2023.

(4) INVENTORY
Inventory consisted of the following:
(In thousands)June 30, 2024December 31, 2023
Raw materials$52,363 $58,593 
Semi-finished and finished goods75,010 68,882 
Total inventory$127,373 $127,475 
15
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(5) PROPERTY, PLANT AND EQUIPMENT
The carrying value and estimated useful lives of property, plant and equipment are as follows:
(In thousands)Estimated Useful LifeJune 30, 2024December 31, 2023
Property, plant and equipment
Landn/a$4,716 $4,716 
Leasehold and building improvements(1)228,513 214,562 
Land improvements15 years6,747 6,729 
Buildings
30 - 40 years
290,777 290,777 
Computer equipment and computer software3 years198,247 168,131 
Machinery and equipment
3 - 10 years
308,052 290,294 
Furniture and fixtures
3 - 10 years
36,278 35,756 
Assets under constructionn/a100,653 104,592 
Property, plant and equipment, at cost1,173,983 1,115,557 
Accumulated depreciation(470,900)(417,203)
Property, plant and equipment, net$703,083 $698,354 
______________
(1)Lesser of remaining lease term, building life, or estimated useful life.
Depreciation expense for the three months ended June 30, 2024 and 2023 was $29.7 million and $27.5 million, respectively. Depreciation expense for the six months ended June 30, 2024 and 2023 was $60.3 million and $54.3 million, respectively.
At June 30, 2024, the Company had $100.7 million of assets under construction, which consisted of $62.6 million in machinery and equipment, $24.8 million in capitalized costs related to software projects, $8.1 million in leasehold and building improvements, $5.1 million related to buildings, and minimal furniture and fixtures. Depreciation will begin on these assets once they are placed into service upon completion.

(6) INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of June 30, 2024:
(In thousands)Weighted Average Remaining Life (Years)CostAccumulated Amortization
Net Balance at June 30, 2024
Finite-lived intangible assets
Trade name11.2$104,000 $(31,528)$72,472 
Customer relationships6.54,000 (1,111)2,889 
Patents and licenses5.911,542 (10,324)1,218 
Acquired developed technology (1)6.8887,352 (370,453)516,899 
Total finite-lived intangible assets1,006,894 (413,416)593,478 
In-process research and developmentn/a1,250,000 — 1,250,000 
Total intangible assets$2,256,894 $(413,416)$1,843,478 
16
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of December 31, 2023:
(In thousands)Weighted Average Remaining Life (Years)CostAccumulated Amortization
Net balance at December 31, 2023
Finite-lived intangible assets
Trade name11.6$104,000 $(27,903)$76,097 
Customer relationships7.04,000 (889)3,111 
Patents and licenses4.511,542 (9,600)1,942 
Acquired developed technology (1)7.3887,789 (328,543)559,246 
Total finite-lived intangible assets1,007,331 (366,935)640,396 
In-process research and developmentn/a1,250,000 — 1,250,000 
Total intangible assets$2,257,331 $(366,935)$1,890,396 
______________
(1)The gross carrying amount includes an insignificant foreign currency translation adjustment related to the intangible asset acquired as a result of the acquisition of OmicEra Diagnostics GmbH (“OmicEra”).
As of June 30, 2024 the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows:
(In thousands)
2024 (remaining six months)$46,288 
202591,860 
202690,800 
202790,800 
202890,800 
Thereafter182,930 
$593,478 
The Company’s acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives.
There were no impairment losses recorded on finite-lived intangible assets during the three and six months ended June 30, 2024 and 2023. Updates to key assumptions used to calculate the fair value of the Company’s in-process research and development asset (“IPR&D”) could change the Company’s estimate that it will recover the carrying amount of the IPR&D asset in the near term.
17
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Goodwill
The change in the carrying amount of goodwill for the periods ended June 30, 2024 and December 31, 2023 is as follows:
(In thousands)
Balance, January 1, 2023
$2,346,040 
Resolution Bioscience acquisition
20,692 
Effects of changes in foreign currency exchange rates (1)388 
Balance, December 31, 2023
2,367,120 
Resolution Bioscience acquisition adjustment
205 
Effects of changes in foreign currency exchange rates (1)(353)
Balance June 30, 2024
$2,366,972 
______________
(1)Represents the impact of foreign currency translation related to the goodwill acquired as a result of the acquisition of OmicEra.
There were no impairment losses for the three and six months ended June 30, 2024 and 2023.

(7) FAIR VALUE MEASUREMENTS
The three levels of the fair value hierarchy established are as follows:
Level 1    Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2    Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3    Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.
18
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table presents the Company’s fair value measurements as of June 30, 2024 along with the level within the fair value hierarchy in which the fair value measurements, in their entirety, fall.
(In thousands)Fair Value at June 30, 2024Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Cash, cash equivalents, and restricted cash
Cash and money market$519,836 $519,836 $— $— 
U.S. government agency securities10,344 — 10,344 — 
Restricted cash (1)
5,837 5,837 — — 
Marketable securities
Corporate bonds$203,288 $— $203,288 $— 
U.S. government agency securities118,626 — 118,626 — 
Asset backed securities87,414 — 87,414 — 
Commercial paper4,943 — 4,943 — 
Equity securities2,331 2,331 — — 
Non-marketable securities$1,057 $— $— $1,057 
Liabilities
Contingent consideration$(277,921)$— $— $(277,921)
Total$675,755 $528,004 $424,615 $(276,864)
The following table presents the Company’s fair value measurements as of December 31, 2023 along with the level within the fair value hierarchy in which the fair value measurements, in their entirety, fall.
(In thousands)Fair Value at December 31, 2023Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Cash, cash equivalents and restricted cash
Cash and money market$530,100 $530,100 $— $— 
Commercial paper72,243 — 72,243 — 
Restricted cash (1)
4,297 4,297 — — 
U.S. government agency securities3,035 — 3,035 — 
Marketable securities
U.S. government agency securities$56,716 $— $56,716 $— 
Corporate bonds55,828 — 55,828 — 
Asset backed securities34,897 — 34,897 — 
Commercial paper20,984 — 20,984 — 
Equity securities3,841 3,841 — — 
Non-marketable securities$7,650 $— $— $7,650 
Liabilities
Contingent consideration$(288,657)$— $— $(288,657)
Total$500,934 $538,238 $243,703 $(281,007)
_________________________________
(1)Restricted cash primarily represents cash held by a third-party financial institution as part of a cash collateral agreement related to the Company’s credit card program. The restrictions will lapse upon the termination of the agreements or the removal of the cash collateral requirement by the third-parties.
19
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
There have been no material changes in valuation techniques or transfers between fair value measurement levels during the three and six months ended June 30, 2024. The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities are valued using a third-party pricing agency where the valuation is based on observable inputs including pricing for similar assets and other observable market factors.
The Company has elected the fair value option under the income approach to measure certain Level 3 non-marketable securities. Gains and losses recorded on non-marketable securities are included in investment income, net in the condensed consolidated statement of operations. The following table provides a reconciliation of the beginning and ending balances of non-marketable securities valued using the fair value option:
(In thousands)Non-Marketable Securities
Beginning balance, January 1, 2024
$7,650 
Changes in fair value(343)
Settlement of non-marketable securities(6,250)
Ending balance, June 30, 2024
$1,057 
Contingent Consideration Liabilities
The fair value of the contingent consideration liabilities was $277.9 million and $288.7 million as of June 30, 2024 and December 31, 2023, respectively, of which $19.0 million was included in other current liabilities and $258.9 million was included in other long-term liabilities in the condensed consolidated balance sheet as of June 30, 2024. The contingent consideration liabilities were included in other long-term liabilities as of December 31, 2023.
The following table provides a reconciliation of the beginning and ending balances of contingent consideration:
(In thousands)Contingent Consideration
Beginning balance, January 1, 2024
$288,657 
Changes in fair value (1)(7,636)
Payments (2)
(3,100)
Ending balance, June 30, 2024
$277,921 
______________
(1)The change in fair value of the contingent consideration liability was an increase of $4.2 million and a reduction of $4.7 million for the three and six months ended June 30, 2023, respectively, which is included in general and administrative expenses in the condensed consolidated statement of operations.
(2)Payment was made in the second quarter of 2024 to settle the contingent consideration liability previously recorded related to the Company’s acquisition of OmicEra.
This fair value measurement of contingent consideration is categorized as a Level 3 liability, as the measurement amount is based primarily on significant inputs not observable in the market.
20
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The fair value of the contingent consideration liabilities recorded from the Company’s acquisitions of Thrive Earlier Detection Corporation (“Thrive”), Ashion Analytics, LLC (“Ashion”), and OmicEra related to regulatory and product development milestones was $277.9 million and $288.7 million as of June 30, 2024 and December 31, 2023, respectively. The Company evaluates the fair value of the expected contingent consideration and the corresponding liabilities related to the regulatory and product development milestones using the probability-weighted scenario based discounted cash flow model, which is consistent with the initial measurement of the expected contingent consideration liabilities. Probabilities of success are applied to each potential scenario and the resulting values are discounted using a present-value factor. The passage of time in addition to changes in projected milestone achievement timing, present-value factor, the degree of achievement, if applicable, and probabilities of success may result in adjustments to the fair value measurement. The fair value of the contingent consideration liability recorded related to regulatory and product development milestones was determined using a weighted average probability of success of 90% and 89% as of June 30, 2024 and December 31, 2023, respectively, and a weighted average present-value factor of 6.1% and 5.8% as of June 30, 2024 and December 31, 2023, respectively. The projected fiscal year of payment range is from 2025 to 2031. Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.
The revenue milestone associated with the Ashion acquisition is not expected to be achieved and therefore no liability has been recorded for this milestone.
Non-Marketable Equity Investments
Non-marketable equity securities without readily determinable fair values, which are classified as a component of other long-term assets, net, had the following cumulative upward and downward adjustments and aggregate carrying amounts:
(In thousands)
June 30, 2024June 30, 2023
Cumulative upward adjustments (1)
$5,102 $779 
Cumulative downward adjustments and impairments (2)
15,071 12,528 
Aggregate carrying value (3)
52,227 34,197 
_________________________________
(1)    There were no material upward adjustments recorded on non-marketable equity securities held for the three and six months ended June 30, 2024 and 2023.
(2)    There were no material downward adjustments or impairments recorded on non-marketable equity securities held for the three and six months ended June 30, 2024 and 2023, respectively.
(3)    The aggregate carrying value of non-marketable equity securities was $46.0 million as of December 31, 2023.
There were no material realized gains or losses recorded during the three and six months ended June 30, 2024 and 2023.
The Company has committed capital to venture capital investment funds of $18.0 million, of which $11.8 million remains callable through 2033 as of June 30, 2024. The aggregate carrying amount of these funds, which are classified as a component of other long-term assets, net in the Company’s condensed consolidated balance sheets, were $6.8 million and $5.2 million as of June 30, 2024 and December 31, 2023, respectively.
Derivative Financial Instruments
The Company enters into foreign currency forward contracts on the last day of each month to mitigate the impact of adverse movements in foreign exchange rates related to the remeasurement of monetary assets and liabilities and hedge the Company’s foreign currency exchange rate exposure. As of June 30, 2024 and December 31, 2023 the Company had open foreign currency forward contracts with notional amounts of $45.2 million and $39.5 million, respectively. The Company's foreign exchange derivative instruments are classified as Level 2 within the fair value hierarchy as they are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. The fair value of the open foreign currency forward contracts was zero at June 30, 2024 and December 31, 2023 and there were no gains or losses recorded to adjust the fair value of the open foreign currency contract held as of June 30, 2024. The contracts are closed subsequent to each month-end, and the gains and losses recorded from the contracts were not significant for the three and six months ended June 30, 2024 and 2023.
21
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)

(8) LONG-TERM DEBT
Accounts Receivable Securitization Facility
On June 29, 2022, the Company, through a wholly-owned special purpose entity, Exact Receivables LLC (“Exact Receivables”) entered into an accounts receivable securitization program (the “Securitization Facility”) with PNC Bank, National Association (“PNC”), with a scheduled maturity date of June 29, 2024. The Securitization Facility provided Exact Receivables with a revolving line-of-credit of up to $150.0 million of borrowing capacity, subject to certain borrowing base requirements, by collateralizing a security interest in the domestic customer accounts receivable of certain wholly-owned subsidiaries of the Company. The amount available under the Securitization Facility fluctuated over time based on the total amount of eligible customer accounts receivable generated by the Company during the normal course of operations. The Securitization Facility required the Company to maintain minimum borrowings under the facility of $50.0 million. The debt issuance costs incurred related to the Securitization Facility were not significant and were amortized over the life of the Securitization Facility through interest expense within the condensed consolidated statements of operations.
In connection with the Securitization Facility, the Company also entered into two Receivables Purchase Agreements (“Receivable Purchase Agreements”) on June 29, 2022. The Receivable Purchase Agreements were among the Company and certain wholly-owned subsidiaries of the Company, and between the Company and Exact Receivables. Under the agreements, the wholly-owned subsidiaries sold all of their right, title and interest in their accounts receivables to Exact Receivables. The receivables were used to collateralize borrowings made under the Securitization Facility. The Company retained the responsibility of servicing the accounts receivable balances pledged as collateral under the Securitization Facility and provided a performance guaranty.
Upon the maturity of the Securitization Facility in June 2024, the Company repaid the previously outstanding balance of $50.0 million in full. As of December 31, 2023, the Company had an outstanding balance of $50.0 million, which was included in debt, current portion on the Company’s condensed consolidated balance sheet. Prior to the repayment, the outstanding balance accrued interest at a rate equal to a daily secured overnight financing rate (“SOFR”) plus a SOFR adjustment and an applicable margin. The interest rate was 6.89% as of the maturity date.
Revolving Loan Agreement
During November 2021, the Company entered into a revolving loan agreement (the “Revolving Loan Agreement”) with PNC. The Revolving Loan Agreement provides the Company with a revolving line of credit of up to $150.0 million (the “Revolver”). The Revolver is collateralized by the Company’s marketable securities held by PNC, which must continue to maintain a minimum market value of $150.0 million. The Revolver is available for general working capital purposes and all other lawful corporate purposes. In addition, the Company may request, in lieu of cash advances, letters of credit with an aggregate stated amount outstanding not to exceed $20.0 million. The availability of advances under the line of credit will be reduced by the stated amount of each letter of credit issued and outstanding.
Borrowings under the Revolving Loan Agreement accrue interest at an annual rate equal to the sum of the daily Bloomberg Short-Term Bank Yield Index Rate plus the applicable margin of 0.60%. Loans under the Revolving Loan Agreement may be prepaid at any time without penalty. In October 2022, the Revolving Loan Agreement was amended to extend the maturity date from November 5, 2023 to November 5, 2025. There were no other amendments to the Revolver.
The Company has agreed to various financial covenants under the Revolving Loan Agreement, and as of June 30, 2024, the Company is in compliance with all covenants.
In December 2021 and January 2023, PNC issued letters of credit of $2.9 million and $1.5 million, respectively, which reduced the amount available for cash advances under the line of credit to $145.6 million as of June 30, 2024 and December 31, 2023. As of June 30, 2024 and December 31, 2023, the Company has not drawn funds from, nor are any amounts outstanding under, the Revolving Loan Agreement.

22
EXACT SCIENCES CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(9) CONVERTIBLE NOTES
Convertible note obligations included in the condensed consolidated balance sheet consisted of the following as of June 30, 2024:
Fair Value (1)
(In thousands)Principal AmountUnamortized Debt Discount and Issuance CostsNet Carrying AmountAmountLeveling
2031 Convertible Notes - 1.750%
$620,709 $(14,633)$606,076 $510,335 2
2030 Convertible Notes - 2.000%
572,993 (3,998)568,995 513,373 2
2028 Convertible Notes - 0.375%
589,380 (5,741)583,639 482,702 2
2027 Convertible Notes - 0.375%
563,822 (4,584)559,238 494,872 2
2025 Convertible Notes - 1.000% (2)
249,172 (249)248,923 242,943 2
Convertible note obligations included in the condensed consolidated balance sheet consisted of the following as of December 31, 2023:
Fair Value (1)
(In thousands)Principal AmountUnamortized Debt Discount and Issuance CostsNet Carrying AmountAmount