Personalis, Inc.

of the prior year. It's vital to understand that this margin compression is both intentional and temporary. We foresee this margin dilution to continue throughout 2026 with the lowest point expected to be in the first two quarters of the year but begins to improve when we receive reimbursement coverage for I.O.

unreimbursed test costs, diluted lung cancer come online, that volume run rate converts to higher margin revenue.

We expect to realize the benefits from investments to gain market share over the next two to three years as our clinical revenue gets to scale. Operating expenses were $32.4 million in the first quarter, compared to $24.9 million for the same period of the prior year. Our expense base is increasing as we are forging ahead with key investments in order to win market share. We are investing in commercial resources to drive volume, investing in new and existing studies to support reimbursement, and we are investing in our technology like our variant tracker feature in order to maintain and increase our ultra-sensitive leadership position. The first quarter R&D expense was $14.5 million compared with $12.6 million for the same period of the prior year. And SG&A expense was $17.9 million compared with $12.3 million for the same period of the prior year. Net loss for the first quarter was $30 million, compared with $15.8 million for the same period of the prior year. The increase in net loss stemmed from all of the investments previously discussed. Now let's review the balance sheet and our strong cash position. We finished the first quarter with cash and short-term investments of $233.2 million and no debt, other than some small equipment loans. We used approximately $28 million of cash in the first quarter, which included approximately $5 million of incentive compensation that do not repeat throughout the rest of the year. Now let's review our 2026 outlook. Our full year 2026 guidance is unchanged. As a reminder, our guidance only assumes paid tests from reimbursement coverage decisions received to date. Upsides may be realized from faster coverage expansion, accelerated payer adoption, additional volume growth for clinical tests, and increased strength in biopharma MRD demand. We expect total company revenue to be in the range of $78 to $80 million, and this assumes clinical revenue of $10 to $11 million, specifically from breast and lung cancer surveillance tests recently covered by Medicare. Revenue from pharma tests and services and all of the customers to be in the range of 55 to 56 million. MRD revenue from these customers is expected to grow rapidly and be in the range of 20 to 21 million. Population sequencing plus enterprise customers of approximately 13 million Gross margin is expected to be in the range of 15% to 20%, with the first two quarters being the lowest points of the year. Net loss of approximately $105 million, and we expect our cash usage to be approximately $100 million as we continue to invest in our win-and-MRD strategy in order to gain market share fund pivotal clinical studies to support Medicare reimbursement and help change medical guidelines in our favor. With $233 million of cash on a balance sheet, we have the ability to invest this year and drive scale. We are leading the ultra-sensitive MRD market with our technology, and a proof point is our ramping clinical test volume. The market is expanding rapidly, and is expected to grow to $20 billion or more, and we are positioned to win. We look forward to updating you on our progress during the next conference call in a few months. And with that, I will turn the call back over to the operator to begin the Q&A session. Operator?