Summary of Adaptive Biotechnologies FY Conference Call Company Overview - **Company**: Adaptive Biotechnologies (NasdaqGS:ADPT) - **Date**: September 10, 2025 - **Key Speakers**: Chad Robins (CEO), Kyle Piskel (CFO) Key Accomplishments and Goals - Achieved EBITDA profitability ahead of schedule, a significant milestone in the industry [2] - Successfully implemented Flatiron EMR integration and transitioned to NovaSeq X from NextSeqs [2] Market Penetration and Testing Insights - Market penetration for various hematologic malignancies: - Multiple Myeloma: 12% - Acute Lymphoblastic Leukemia (ALL): 28% - Mantle Cell Lymphoma (MCL): 7% - Chronic Lymphocytic Leukemia (CLL): 5% - Diffuse Large B-Cell Lymphoma (DLBCL): 3% [3] - Community penetration is growing rapidly, with a 16% quarter-over-quarter growth in community settings [4][5] - Blood-based testing now accounts for 44% of MRD testing volume, up from 40% in Q2 2024 [11] Testing Frequency and Clinical Utility - Average testing frequency: - ALL: 3.5 to 4 tests per patient per year - Multiple Myeloma: 2 to 2.5 tests per patient per year - CLL: 1 test per patient per year [8] - 80% of community oncologists are utilizing the new serial testing option integrated into EMR systems [10][26] - Clinical utility trials (MASTER and MIDUS) are enhancing market penetration and increasing test frequency [30][32] Reimbursement and Regulatory Updates - Recent CMS reimbursement for surveillance in MCL opens opportunities for other hematologic malignancies [20] - NCCN guideline updates strengthen recommendations for clonoSEQ testing in multiple myeloma [17] EMR Integration and Sales Strategy - 40 Epic integrations and 113 community accounts via oncoEMR, with a focus on quality over quantity [22] - Post-integration, accounts have seen a 25% growth in volume [23] - EMR integration is expected to drive consistent ordering patterns [26] Financial Performance and Projections - Targeting an ASP of $1,300 for clonoSEQ in 2025, with current performance exceeding $1,290 [45] - NovaSeq X rollout expected to improve gross margins by 5% to 8% [47] - Cash burn guidance has been reduced while maintaining over 25% top-line growth [48] Future Outlook - Excitement around the NeoGenomics partnership and its potential impact on community presence [27] - Continued focus on leveraging clinical utility data to drive growth in the community setting [50] - Long-term goal to establish a pan-disease recurrence monitoring paradigm [21] Additional Insights - The company is exploring monetization opportunities for returned assets from Genentech, including a digital TCR antigen map [39][40] - The integration of MRD as a primary endpoint in multiple myeloma trials is expected to enhance the company's pharma business [34][35] This summary encapsulates the key points discussed during the conference call, highlighting the company's achievements, market strategies, and future growth prospects.

Company Overview - Adaptive Biotechnologies (ADPT) currently holds a Momentum Style Score of B, indicating a favorable position in momentum investing [3] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [4] Performance Metrics - Over the past week, ADPT shares increased by 1.38%, while the Zacks Medical - Biomedical and Genetics industry declined by 1.52% [6] - In a longer time frame, ADPT's monthly price change is 27.59%, significantly outperforming the industry's 2.69% [6] - Over the past quarter, ADPT shares have risen by 30.62%, and over the last year, they have gained 180.43%, compared to the S&P 500's increases of 9.68% and 16.9%, respectively [7] Trading Volume - The average 20-day trading volume for ADPT is 2,268,630 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the last two months, four earnings estimates for ADPT have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from -$0.87 to -$0.71 [10] - For the next fiscal year, three estimates have moved upwards with no downward revisions during the same period [10] Conclusion - Considering the performance metrics, trading volume, and positive earnings outlook, ADPT is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [12]

Core Insights - Adaptive Biotechnologies Corporation is participating in the Morgan Stanley 23rd Annual Global Healthcare Conference in New York, highlighting its ongoing engagement with the investment community [1][2]. Company Overview - Adaptive Biotechnologies is a commercial-stage biotechnology company focused on leveraging the adaptive immune system for disease diagnosis and treatment. The company aims to decode the adaptive immune system's genetics to enhance medical capabilities [3]. - The company operates two business segments: Minimal Residual Disease (MRD) and Immune Medicine, developing clinical diagnostics and therapeutic products for diseases such as cancer and autoimmune disorders [3]. Upcoming Events - Management is scheduled for a fireside chat on September 10 at 10:05 a.m. Pacific Time, with a live and archived webcast available on the company's website [2].

Company Performance - Shares of Adaptive Biotechnologies (ADPT) have increased by 14.5% over the past month, reaching a new 52-week high of $12.93 [1] - The stock has gained 111.2% since the beginning of the year, outperforming the Zacks Medical sector, which declined by 6.6%, and the Zacks Medical - Biomedical and Genetics industry, which saw a return of 0.6% [1] Earnings and Revenue - Adaptive Biotechnologies has a strong record of positive earnings surprises, having beaten earnings consensus estimates in the last four quarters [2] - In the latest earnings report on August 5, 2025, the company reported an EPS of -$0.17, surpassing the consensus estimate of -$0.24, and beat the revenue estimate by 18.47% [2] - For the current fiscal year, the company is expected to post earnings of -$0.78 per share on revenues of $227.14 million, reflecting a 27.78% change in EPS and a 26.93% change in revenues [3] - For the next fiscal year, earnings are projected to be -$0.59 per share on revenues of $271.06 million, indicating year-over-year changes of 23.72% and 19.34%, respectively [3] Valuation Metrics - Despite reaching a 52-week high, the valuation metrics are crucial to assess if the stock has become overvalued [4] - The Zacks Style Scores indicate that Adaptive Biotechnologies has a Value Score of F, while its Growth and Momentum Scores are both A, resulting in a VGM Score of B [6] Zacks Rank - The current Zacks Rank for Adaptive Biotechnologies is 2 (Buy), supported by a solid earnings estimate revision trend [7] - The recommendation is for investors to select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, suggesting that Adaptive Biotechnologies may have further upside potential [8] Industry Comparison - In comparison to industry peers, Puma Biotechnology, Inc. (PBYI) also shows promise with a Zacks Rank of 2 (Buy) and a Value Score of A [9] - Puma Biotechnology reported a 36.36% earnings beat in the last quarter and is expected to post earnings of $0.65 per share on revenues of $216.32 million for the current fiscal year [10] - The Medical - Biomedical and Genetics industry ranks in the bottom 59% of all industries, but there are still positive tailwinds for both ADPT and PBYI [11]

Group 1 - Aristotle Capital Management is an independent and employee-owned investment management organization [1] - The company specializes in equity and fixed income portfolio management [1] - The organization serves institutional and advisory clients worldwide [1]

Core Insights - Adaptive Biotechnologies reported a revenue of $58.88 million for the quarter ended June 2025, reflecting a year-over-year increase of 36.3% [1] - The company's EPS was -$0.17, an improvement from -$0.26 in the same quarter last year, with an EPS surprise of +29.17% compared to the consensus estimate of -$0.24 [1] Revenue Performance - ClonoSEQ test volume reached 25,321, exceeding the average estimate of 24,035 [4] - Total Immune Medicine revenues were $8.94 million, surpassing the estimated $7.93 million, marking a 13.1% increase year over year [4] - Total MRD revenues amounted to $49.94 million, significantly higher than the $42.33 million estimate, representing a 41.5% year-over-year growth [4] - MRD-Service revenue was reported at $44.44 million, exceeding the average estimate of $41.04 million [4] - Immune Medicine revenue from collaboration was $3.94 million, slightly below the estimated $4.07 million, but still showing a remarkable 124.1% increase year over year [4] - Immune Medicine revenue from service was $5 million, which was lower than the estimated $4.59 million, reflecting an 18.7% decrease year over year [4] Stock Performance - Shares of Adaptive Biotechnologies have declined by 7.1% over the past month, while the Zacks S&P 500 composite increased by 1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Adaptive Biotechnologies reported a quarterly loss of $0.17 per share, better than the Zacks Consensus Estimate of a loss of $0.24, and improved from a loss of $0.26 per share a year ago, resulting in an earnings surprise of +29.17% [1] - The company achieved revenues of $58.88 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 18.47%, and up from $43.19 million in the same quarter last year [2] - Adaptive Biotechnologies shares have increased approximately 82% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.6% [3] Group 2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for Adaptive Biotechnologies was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is -$0.21 on revenues of $56.63 million, and for the current fiscal year, it is -$0.87 on revenues of $218.28 million [7] Group 3 - The outlook for the Medical - Biomedical and Genetics industry, where Adaptive Biotechnologies operates, is currently in the bottom 43% of over 250 Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $58.9 million, representing a 36% growth year over year, with 85% from the MRD business and 15% from immune medicine [20][21] - MRD revenue grew 42% year over year to $49.9 million, with clinical and pharma contributions of 65% and 35% respectively [20][21] - Sequencing gross margin improved by 14 percentage points year over year to 64%, driven by lower labor and overhead costs alongside increasing volumes and higher pricing [22][23] - Cash burn for the quarter was approximately $11 million, a 36% improvement over the same period last year, ending with a solid cash position of $222 million [7][20] Business Line Data and Key Metrics Changes - ClonoSEQ revenue grew 57% year over year, with over 25,300 tests delivered, up 37% versus the prior year and up 10% sequentially [7][20] - The MRD business achieved positive adjusted EBITDA of $1.9 million, a significant improvement from a deficit of $11.3 million a year ago [23] - Immune medicine revenue was $8.9 million, up 13% from a year ago, with adjusted EBITDA loss improving by 14% year over year [23] Market Data and Key Metrics Changes - Blood-based testing represented 44% of MRD tests, up 40% from a year ago, with multiple myeloma accounting for 41% of U.S. ClonoSEQ volume [8][9] - The average selling price (ASP) for ClonoSEQ tests in the U.S. reached $12.90, a 17% increase year over year [10][21] - The backlog for MRD Pharma business grew to $218 million, up 21% from the prior year, with 175 active global clinical trials [12][13] Company Strategy and Development Direction - The company is focused on expanding EMR integrations to drive volume growth, with significant progress in integrating ClonoSEQ into Flatiron's Onco EMR [11][12] - The MRD Pharma business is expected to continue growing, with a strong pipeline and increasing global support for MRD testing as a key endpoint in clinical trials [13][106] - The company aims to achieve a cash burn target of $25 million to $30 million by scaling revenue generation from pharma partnerships while managing R&D investments [19][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving raised full-year guidance, driven by stronger-than-expected clinical volume performance and higher MRD milestone revenue anticipated for the year [20][26] - The company remains optimistic about the growing global support for MRD testing to accelerate new treatments across various malignancies [13][106] - Management highlighted the importance of the recent NCCN guidelines update for multiple myeloma, which is expected to support increased adoption of ID testing [96] Other Important Information - The company has begun processing ClonoSEQ tests on the NovaSeq X, which is expected to scale operations and improve margins [6] - The integration of ClonoSEQ into EMR systems is seen as a key driver of volume growth, with positive feedback from healthcare providers [11][34] Q&A Session Summary Question: Can you provide insights on the Flatiron integration and its impact on volume growth? - Management noted that the integration with Flatiron is in early stages, but initial results are promising, with expectations for consistent ordering at clinically appropriate time points [34][35] Question: What are the expectations for ClonoSEQ pricing and payer traction? - The company is seeing improvements in pricing due to contracting efforts, particularly with larger national payers, and anticipates continued pricing momentum in the second half of the year [37][38] Question: How does the company plan to balance investments in the business with EBITDA margin potential? - Management indicated that the business is set up to continuously produce positive adjusted EBITDA, with ongoing investments in MRD and international markets to support growth [42][44] Question: What are the implications of the NCCN guidelines update for multiple myeloma? - The update is viewed as a tailwind for the company, reinforcing the importance of ID testing at diagnosis, which is expected to contribute to ongoing volume growth [96][97] Question: Can you elaborate on the NEO collaboration and its expected impact? - The NEO collaboration is in its pilot phase, with expectations for material impact on volumes in 2026 and 2027, while the current focus is on operational processes [86][88]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section provides the unaudited condensed consolidated financial statements and notes, detailing financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs Dec 31, 2024) | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------------------- | | Total Assets | $496,637 | $539,376 | -$42,739 | | Total Liabilities | $317,101 | $336,891 | -$19,790 | | Total Shareholders' Equity | $179,536 | $202,485 | -$22,949 | | Cash and Cash Equivalents | $43,163 | $47,920 | -$4,757 | | Short-term marketable securities | $154,710 | $174,374 | -$19,664 | | Current Assets | $261,856 | $283,752 | -$21,896 | | Current Liabilities | $92,141 | $98,053 | -$5,912 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (YoY) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | | Revenue | $58,879 | $43,190 | +36.3% | $111,322 | $85,063 | +30.9% | | Total Operating Expenses | $83,915 | $90,508 | -7.29% | $165,962 | $181,143 | -8.27% | | Loss from Operations | $(25,036) | $(47,318) | +47.1% | $(54,640) | $(96,080) | +43.1% | | Net Loss attributable to Adaptive Biotechnologies Corporation | $(25,614) | $(46,222) | +44.6% | $(55,466) | $(93,729) | +40.8% | | Net Loss per Share (basic and diluted) | $(0.17) | $(0.31) | +45.2% | $(0.37) | $(0.64) | +42.2% | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (YoY) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | | Net Loss | $(25,593) | $(46,248) | +44.6% | $(55,423) | $(93,781) | +40.9% | | Change in unrealized gains and losses on investments | $(61) | $(76) | +19.7% | $(93) | $(397) | +76.6% | | Comprehensive Loss attributable to Adaptive Biotechnologies Corporation | $(25,675) | $(46,298) | +44.6% | $(55,559) | $(94,126) | +41.0% | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) - Total shareholders' equity decreased from **$202,485 thousand** at December 31, 2024, to **$179,536 thousand** at June 30, 2025[11](index=11&type=chunk) - Net loss for the six months ended June 30, 2025, was **$(55,466) thousand**, contributing to the accumulated deficit[22](index=22&type=chunk) - Share-based compensation expense for the six months ended June 30, 2025, was **$25,506 thousand**[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | | Net cash used in operating activities | $(40,914) | $(55,656) | +26.5% (less cash used) | | Net cash provided by investing activities | $28,919 | $50,386 | -42.6% | | Net cash provided by financing activities | $7,061 | $74 | +9455.4% | | Net decrease in cash, cash equivalents and restricted cash | $(4,934) | $(5,196) | +5.0% (smaller decrease) | | Cash, cash equivalents and restricted cash at end of period | $45,883 | $62,800 | -27.0% | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Description of Business](index=10&type=section&id=1.%20Organization%20and%20Description%20of%20Business) - Adaptive Biotechnologies Corporation is a commercial-stage company advancing immune medicine by harnessing the adaptive immune system to transform disease diagnosis and treatment[27](index=27&type=chunk) - The company's immune medicine platform applies proprietary technologies, computational biology, and machine learning to decode a patient's immune system for tailored clinical products and services[27](index=27&type=chunk) [2. Significant Accounting Policies](index=10&type=section&id=2.%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, including all necessary normal, recurring adjustments[31](index=31&type=chunk) - Revenue recognition follows a five-step process, involving identifying contracts and performance obligations, measuring transaction price, allocating price, and recognizing revenue upon satisfaction of obligations[35](index=35&type=chunk) - The company is evaluating the impact of new accounting pronouncements, ASU No. 2023-09 (Income Taxes) and ASU No. 2024-03 (Expense Disaggregation Disclosures), on its consolidated financial statements[42](index=42&type=chunk)[43](index=43&type=chunk) [3. Revenue](index=13&type=section&id=3.%20Revenue) Revenue by Category (in thousands) | Revenue Category | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (YoY) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :----------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | | MRD Service Revenue | $44,438 | $32,284 | +37.6% | $83,659 | $60,410 | +38.5% | | MRD Regulatory Milestone Revenue | $5,500 | $3,000 | +83.3% | $10,000 | $7,500 | +33.3% | | Total MRD Revenue | $49,938 | $35,284 | +41.5% | $93,659 | $67,910 | +37.9% | | Immune Medicine Service Revenue | $5,001 | $6,148 | -18.6% | $10,123 | $10,707 | -5.4% | | Immune Medicine Collaboration Revenue | $3,940 | $1,758 | +124.1% | $7,540 | $6,446 | +17.0% | | Total Immune Medicine Revenue | $8,941 | $7,906 | +13.1% | $17,663 | $17,153 | +3.0% | | Total Revenue | $58,879 | $43,190 | +36.3% | $111,322 | $85,063 | +30.9% | - As of June 30, 2025, the company could receive up to an additional **$406.5 million** in milestone payments from customers' therapeutics achieving regulatory approvals related to MRD data[45](index=45&type=chunk) - Under the Genentech Agreement, the company may be eligible for an additional **$1.8 billion** in milestone payments (regulatory, development, commercial) and tiered royalties on net sales[47](index=47&type=chunk) [4. Deferred Revenue](index=16&type=section&id=4.%20Deferred%20Revenue) Deferred Revenue Balance (in thousands) | Metric (in thousands) | June 30, 2025 | | :------------------------------------ | :------------ | | Deferred revenue balance at December 31, 2024 | $82,945 | | Additions to deferred revenue during the period | $27,554 | | Revenue recognized during the period | $(35,166) | | Deferred revenue balance at June 30, 2025 | $75,333 | - Deferred revenue from the Genentech Agreement accounted for **$15.1 million** (current) and **$18.6 million** (non-current) of the total deferred revenue balances as of June 30, 2025[57](index=57&type=chunk) - The majority of non-current deferred revenue is expected to be recognized over approximately **three to four years** from June 30, 2025, representing the estimated research and development period[57](index=57&type=chunk) [5. Fair Value Measurements](index=16&type=section&id=5.%20Fair%20Value%20Measurements) Financial Assets Fair Value (in thousands) | Financial Assets (in thousands) | June 30, 2025 (Total) | December 31, 2024 (Total) | Change | | :------------------------------ | :-------------------- | :------------------------ | :----- | | Money market funds | $29,230 | $35,790 | -$6,560 | | Commercial paper | $1,465 | $2,479 | -$1,014 | | U.S. government treasury securities | $149,461 | $187,181 | -$37,720 | | Corporate bonds | $27,884 | $18,374 | +$9,510 | | Total financial assets | $208,040 | $243,824 | -$35,784 | - Level 1 securities include highly liquid money market funds, while Level 2 securities consist of U.S. government treasury securities, corporate bonds, and commercial paper, valued based on observable market data[61](index=61&type=chunk) [6. Investments](index=18&type=section&id=6.%20Investments) Marketable Securities Fair Value (in thousands) | Investment Category (in thousands) | June 30, 2025 (Estimated Fair Value) | December 31, 2024 (Estimated Fair Value) | | :--------------------------------- | :------------------------------------- | :----------------------------------------- | | Total short-term marketable securities | $154,710 | $174,374 | | Total long-term marketable securities | $24,100 | $33,660 | - As of June 30, 2025, gross unrealized holding losses for investments in a loss position totaled **$(60) thousand**, primarily due to changes in interest rates rather than credit loss[65](index=65&type=chunk)[66](index=66&type=chunk) - The company does not intend, nor is it likely to be required, to sell available-for-sale investments before the recovery of their amortized cost basis[66](index=66&type=chunk) [7. Leases](index=19&type=section&id=7.%20Leases) - The company has operating lease agreements for laboratory, office, and warehouse facilities in Seattle, Washington, South San Francisco, California, and Bothell, Washington[67](index=67&type=chunk) Operating Lease Liabilities (in thousands) | Lease Metric (in thousands) | Amount | | :------------------------------------ | :------- | | Total undiscounted lease payments | $100,611 | | Less: Imputed interest | $(16,241) | | Total operating lease liabilities | $84,370 | | Less: Current portion | $(9,957) | | Operating lease liabilities, less current portion | $74,413 | - Cash paid for amounts included in the measurement of lease liabilities was **$7.2 million** for the six months ended June 30, 2025, compared to **$7.0 million** in the prior year[68](index=68&type=chunk) [8. Revenue Interest Purchase Agreement](index=19&type=section&id=8.%20Revenue%20Interest%20Purchase%20Agreement) - In September 2022, the company entered into a Purchase Agreement with OrbiMed, receiving **$125.0 million** at closing and potentially up to **$125.0 million** in subsequent installments by September 12, 2025[70](index=70&type=chunk) - The transaction is accounted for as debt at amortized cost using the effective interest rate method, with an effective interest rate of **8.9%** as of June 30, 2025[73](index=73&type=chunk)[74](index=74&type=chunk) Revenue Interest Liability (in thousands) | Metric (in thousands) | Amount | | :------------------------------------ | :------- | | Revenue interest liability, net at December 31, 2024 | $133,279 | | Interest expense (6 months) | $5,853 | | Revenue interest payable (6 months) | $(5,567) | | Revenue interest liability, net at June 30, 2025 | $133,565 | [9. Commitments and Contingencies](index=21&type=section&id=9.%20Commitments%20and%20Contingencies) - The company is not a party to any material legal proceedings as of June 30, 2025[78](index=78&type=chunk) - The company provides indemnification to various parties, including directors and executive officers, with maximum potential future payments often unlimited, but has not incurred material costs from such indemnifications[79](index=79&type=chunk) [10. Shareholders' Equity](index=22&type=section&id=10.%20Shareholders%27%20Equity) - As of June 30, 2025, the company had **152,234,772 shares** of common stock issued and outstanding[11](index=11&type=chunk) - Total shares of common stock reserved for future issuance under equity incentive plans amounted to **45,544,717 shares** as of June 30, 2025[84](index=84&type=chunk) - The board of directors determined not to increase the 2019 Plan and ESPP reserves in 2025[83](index=83&type=chunk) [11. Equity Incentive Plans](index=22&type=section&id=11.%20Equity%20Incentive%20Plans) - Stock options outstanding at June 30, 2025, totaled **11,393,433 shares** with a weighted-average exercise price of **$15.43** and a remaining contractual life of **5.5 years**[88](index=88&type=chunk) - Nonvested restricted stock units outstanding at June 30, 2025, totaled **11,598,813 shares** with a weighted-average grant date fair value of **$7.30**[89](index=89&type=chunk) Share-Based Compensation Expense (in thousands) | Expense Category (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cost of revenue | $1,010 | $1,011 | $1,889 | $1,917 | | Research and development | $4,276 | $4,170 | $8,334 | $8,854 | | Sales and marketing | $3,508 | $3,177 | $6,652 | $6,190 | | General and administrative | $4,565 | $4,600 | $8,631 | $10,295 | | Total share-based compensation expense | $13,359 | $12,958 | $25,506 | $27,256 | [12. Restructurings](index=26&type=section&id=12.%20Restructurings) - During the six months ended June 30, 2024, the company recognized total restructuring costs of **$8.9 million**, primarily related to organizational alignment and consolidation of R&D workflows[105](index=105&type=chunk) - Restructuring initiatives in Q2 2024 led to **$7.2 million** in impairment charges for long-lived assets, including leased space and halted software enhancements[104](index=104&type=chunk) [13. Net Loss Per Share Attributable to Adaptive Biotechnologies Corporation Common Shareholders](index=27&type=section&id=13.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Adaptive%20Biotechnologies%20Corporation%20Common%20Shareholders) Net Loss Per Share and Weighted-Average Shares | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Loss per Share (basic and diluted) | $(0.17) | $(0.31) | $(0.37) | $(0.64) | | Weighted-average shares (basic and diluted) | 152,082,284 | 147,414,095 | 150,646,632 | 146,600,811 | - Basic and diluted net loss per share are the same for all periods presented due to the company's loss position, making the inclusion of potential common shares anti-dilutive[106](index=106&type=chunk) - Approximately **28.8 million** (Q2 2025) and **27.9 million** (6M 2025) common stock equivalents were excluded from diluted EPS calculation due to their anti-dilutive effect[107](index=107&type=chunk) [14. Segment Information](index=27&type=section&id=14.%20Segment%20Information) Segment Revenue and Adjusted EBITDA (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | MRD Revenue | $49,938 | $35,284 | +41.5% | $93,659 | $67,910 | +37.9% | | Immune Medicine Revenue | $8,941 | $7,906 | +13.1% | $17,663 | $17,153 | +3.0% | | MRD Adjusted EBITDA | $1,912 | $(11,289) | +$13,201 | $(2,199) | $(28,548) | +$26,349 | | Immune Medicine Adjusted EBITDA | $(6,069) | $(7,033) | +$964 | $(11,515) | $(13,960) | +$2,445 | - MRD Adjusted EBITDA significantly improved, increasing by **$13.2 million** for the three months and **$26.3 million** for the six months ended June 30, 2025, primarily due to increased MRD revenue[160](index=160&type=chunk)[174](index=174&type=chunk) - Immune Medicine Adjusted EBITDA deficit reduced by **$1.0 million** for the three months and **$2.4 million** for the six months ended June 30, 2025, driven by increased Genentech Agreement revenue and reduced operating expenses[161](index=161&type=chunk)[175](index=175&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial condition and operational results, highlighting improved net loss and Adjusted EBITDA driven by strong MRD revenue growth and cost management [Overview](index=30&type=section&id=Overview) - Adaptive Biotechnologies is an immune medicine company leveraging its proprietary platform, computational biology, and machine learning to decode the adaptive immune system for disease diagnosis and treatment[120](index=120&type=chunk) - The company's clonoSEQ clinical diagnostic test is FDA-authorized for MRD detection in multiple myeloma, B-cell ALL, and CLL, with expanded Medicare coverage for MCL[121](index=121&type=chunk) - Immune Medicine leverages immunosequencing technology and AI/ML for drug discovery, including a worldwide collaboration with Genentech for TCR-based cancer cell therapies[122](index=122&type=chunk) [Components of Results of Operations](index=31&type=section&id=Components%20of%20Results%20of%20Operations) - MRD revenue is expected to increase in the long term due to enhanced penetration in existing patient populations, expansion into new populations, and optimized payor coverage[130](index=130&type=chunk) - Immune Medicine revenue is expected to increase in the long term as the company or its collaborators advance therapies to commercialization[131](index=131&type=chunk) - Cost of revenue is expected to increase in absolute dollars but decrease per sample over the long term due to efficiencies from increased assay volume, automation, and value engineering[134](index=134&type=chunk) - Research and development expenses are expected to remain relatively consistent in the short term and decrease as a percentage of revenue in the long term[137](index=137&type=chunk) - Sales and marketing expenses are expected to increase in absolute dollars in the long term but decrease as a percentage of revenue due to increased marketing activities and adoption[139](index=139&type=chunk) - General and administrative expenses are expected to moderately increase in the short term and decrease as a percentage of revenue in the long term[141](index=141&type=chunk) [Statements of Operations Data and Other Financial and Operating Data](index=33&type=section&id=Statements%20of%20Operations%20Data%20and%20Other%20Financial%20and%20Operating%20Data) Statements of Operations Data (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Revenue | $58,879 | $43,190 | $111,322 | $85,063 | | Loss from operations | $(25,036) | $(47,318) | $(54,640) | $(96,080) | | Net loss attributable to Adaptive Biotechnologies Corporation | $(25,614) | $(46,222) | $(55,466) | $(93,729) | | Adjusted EBITDA | $(7,196) | $(21,446) | $(19,944) | $(49,626) | [Comparison of the Three Months Ended June 30, 2025 and 2024](index=34&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Total revenue increased, driven by MRD growth, significantly reducing net loss and improving Adjusted EBITDA, with the MRD segment turning positive Financial Performance (3 Months Ended June 30, in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | | Total Revenue | $58,879 | $43,190 | +36.3% | | MRD Revenue | $49,938 | $35,284 | +41.5% | | Immune Medicine Revenue | $8,941 | $7,906 | +13.1% | | Cost of Revenue | $17,999 | $19,317 | -7.2% | | Research and Development | $24,134 | $25,353 | -4.8% | | Sales and Marketing | $23,573 | $20,314 | +16.0% | | General and Administrative | $17,786 | $17,895 | -0.6% | | Impairment of Long-Lived Assets | $0 | $7,205 | -100% | | Net Loss attributable to Adaptive Biotechnologies Corporation | $(25,614) | $(46,222) | +44.6% (reduced loss) | | MRD Adjusted EBITDA | $1,912 | $(11,289) | +$13,201 | | Immune Medicine Adjusted EBITDA | $(6,069) | $(7,033) | +$964 (reduced deficit) | - clonoSEQ test volume increased by **37%** to **25,321 tests** delivered in the three months ended June 30, 2025[147](index=147&type=chunk) - The decrease in cost of revenue was primarily due to reductions in inventory reserve expense, assay costs, and overhead costs from reduced laboratory relocation activities[149](index=149&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=37&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Total revenue increased, driven by MRD growth, leading to a significant reduction in net loss and improved Adjusted EBITDA across both segments Financial Performance (6 Months Ended June 30, in thousands) | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------------ | | Total Revenue | $111,322 | $85,063 | +30.9% | | MRD Revenue | $93,659 | $67,910 | +37.9% | | Immune Medicine Revenue | $17,663 | $17,153 | +3.0% | | Cost of Revenue | $34,978 | $37,368 | -6.4% | | Research and Development | $48,337 | $55,598 | -13.1% | | Sales and Marketing | $46,620 | $42,633 | +9.4% | | General and Administrative | $35,185 | $37,492 | -6.1% | | Impairment of Long-Lived Assets | $0 | $7,205 | -100% | | Net Loss attributable to Adaptive Biotechnologies Corporation | $(55,466) | $(93,729) | +40.8% (reduced loss) | | MRD Adjusted EBITDA | $(2,199) | $(28,548) | +$26,349 (reduced deficit) | | Immune Medicine Adjusted EBITDA | $(11,515) | $(13,960) | +$2,445 (reduced deficit) | - clonoSEQ test volume increased by **36%** to **48,438 tests** delivered in the six months ended June 30, 2025[162](index=162&type=chunk) - The decrease in research and development expenses was primarily due to a **$5.7 million** decrease in personnel costs and a **$1.8 million** decrease in allocable facility expenses[166](index=166&type=chunk) [Adjusted EBITDA](index=39&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA is a non-GAAP financial measure used by management to evaluate business and segment financial performance and strategy effectiveness, excluding items not indicative of core operating performance[176](index=176&type=chunk)[177](index=177&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss attributable to Adaptive Biotechnologies Corporation | $(25,614) | $(46,222) | $(55,466) | $(93,729) | | Adjusted EBITDA | $(7,196) | $(21,446) | $(19,944) | $(49,626) | - Adjusted EBITDA excludes interest and other income/expense, income tax, depreciation/amortization, impairment costs, restructuring expense, and share-based compensation[176](index=176&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had an accumulated deficit of **$1.4 billion** and cash, cash equivalents, and marketable securities totaling **$222.0 million** (down from **$256.0 million** at December 31, 2024)[182](index=182&type=chunk)[183](index=183&type=chunk) - Management believes existing cash, cash equivalents, and marketable securities will be sufficient to fund operating expenses and capital expenditure requirements for at least the next **12 months**[184](index=184&type=chunk) - The company plans to use existing capital to fund commercial and marketing activities for clonoSEQ, streamline laboratory operations, and support drug discovery R&D initiatives[188](index=188&type=chunk) [Contractual Obligations](index=43&type=section&id=Contractual%20Obligations) - In March 2025, the company entered into a new **three-year, $17.5 million** commitment for certain cloud services[190](index=190&type=chunk) - There have been no other material changes to contractual obligations and commitments since the Annual Report on Form 10-K for the year ended December 31, 2024[190](index=190&type=chunk) [Cash Flows](index=43&type=section&id=Cash%20Flows) Cash Flow Activities (in thousands) | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net cash used in operating activities | $(40,914) | $(55,656) | +$14,742 (less cash used) | | Net cash provided by investing activities | $28,919 | $50,386 | -$21,467 | | Net cash provided by financing activities | $7,061 | $74 | +$6,987 | - The decrease in net cash used in operating activities was primarily driven by an increase in customer collections[194](index=194&type=chunk) - The increase in net cash provided by financing activities was due to an increase in proceeds from the exercise of stock options[196](index=196&type=chunk) [Net Operating Loss Carryforwards](index=44&type=section&id=Net%20Operating%20Loss%20Carryforwards) - Utilization of net operating loss (NOL) carryforwards and credits may be subject to annual limitations under Section 382 of the Internal Revenue Code[198](index=198&type=chunk) - Federal NOLs incurred in 2018 and future years can be carried forward indefinitely, but their deductibility is subject to an annual limitation[198](index=198&type=chunk) - A full valuation allowance was applied against net deferred tax assets as of December 31, 2024, as management determined it was not more likely than not that they would be realizable[198](index=198&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes to the company's critical accounting policies and estimates as previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[200](index=200&type=chunk) - Key critical accounting policies include revenue recognition, imputing interest for the Purchase Agreement, goodwill, and recoverability and impairment of long-lived assets[202](index=202&type=chunk) [Recent Accounting Pronouncements](index=44&type=section&id=Recent%20Accounting%20Pronouncements) - Information regarding recent accounting pronouncements is provided in Note 2, Significant Accounting Policies, of the accompanying notes to the unaudited condensed consolidated financial statements[201](index=201&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk, and confirms no material changes since the last annual report - The company is exposed to market risk from changes in interest rates, primarily related to its cash, cash equivalents, and marketable securities[204](index=204&type=chunk) - There have been no material changes to the company's market risks as previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[204](index=204&type=chunk) - The company does not enter into investments for trading purposes and has not used derivative financial instruments to manage interest rate risk[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and reported no material changes to internal control over financial reporting - The company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025, under the supervision of management, including the CEO and CFO[205](index=205&type=chunk) - There was no change in the company's internal control over financial reporting during the three months ended June 30, 2025, that materially affected or is reasonably likely to materially affect it[205](index=205&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not currently a party to or aware of any legal proceedings that are believed to have a material adverse effect on its business, financial condition, or results of operations[208](index=208&type=chunk) - Litigation, regardless of outcome, can negatively impact the company due to defense and settlement costs, diversion of management resources, and other factors[208](index=208&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Annual Report on Form 10-K for a comprehensive discussion of risk factors, noting that there have been no material changes to these risks since the previous filing - Investing in the company's common stock involves a high degree of risk due to operating in a rapidly changing environment[209](index=209&type=chunk) - There have been no material changes to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2024[209](index=209&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the current report - Not applicable[210](index=210&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the current report - Not applicable[211](index=211&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the current report - Not applicable[212](index=212&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the current report - Not applicable[213](index=213&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, compensation policies, officer certifications, and XBRL interactive data files - Exhibits include the Amended and Restated Articles of Incorporation and Bylaws, and the Seventh Amended and Restated Investors' Rights Agreement[215](index=215&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer (pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350) are included[215](index=215&type=chunk) - The report includes Inline XBRL Instance Document, Taxonomy Extension Schema, and Cover Page Interactive Data File[215](index=215&type=chunk) [Signatures](index=48&type=section&id=Signatures) This section contains the official signatures of the company's Chief Executive Officer and Chief Financial Officer, certifying the filing of the report - The report was signed on August 5, 2025, by Chad Robins, Chief Executive Officer and Director, and Kyle Piskel, Chief Financial Officer[219](index=219&type=chunk)

Financial Performance - MRD revenue reached $49.9 million, a 42% year-over-year increase[6] - Excluding milestones, MRD revenue grew by 38% year-over-year[6] - Total revenue increased by 36% to $58.9 million[31] - Sequencing gross margin increased to 64%, up 14 percentage points year-over-year[6] - The company's cash position is strong at $222 million[6] - Q2 2025 cash burn was approximately $11 million, a 36% decrease compared to Q2 2024[6] MRD Business - Clinical testing revenue increased by 57% year-over-year in Q2 2025[9] - clonoSEQ US volume reached 24,624 tests in Q2 2025[10] - 44% of MRD tests were conducted in blood in Q2 2025[11] - MRD pharma backlog is approximately $218 million, a 21% year-over-year growth[19]