EXACT SCIENCES CORPEXAS

EXACT SCIENCES CORP Commitments Disclosure

10-KFiled Feb 13, 20268 min read
COMMITMENTS AND CONTINGENCIES
Leases
The components of lease expense were as follows:
Year Ended December 31,
(In thousands)202520242023
Finance lease cost
Amortization of right-of-use assets$6,554 $7,311 $3,845 
Interest on lease liabilities1,047 1,406 800 
Operating lease cost32,870 31,797 36,576 
Short-term lease cost946 1,036 750 
Variable lease cost8,218 9,055 8,449 
Total lease Cost$49,635 $50,605 $50,420 
Supplemental disclosure of cash flow information related to the Company’s cash and non-cash activities with its leases are as follows:
Year Ended December 31,
(In thousands)202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$41,253$38,135$39,301
Operating cash flows from finance leases1,0831,359783
Finance cash flows from finance leases6,4216,8273,569
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities29,27319,6744,986
Right-of-use assets obtained in exchange for new finance lease liabilities—16,4255,443
Weighted-average remaining lease term - operating leases (in years)6.887.376.87
Weighted-average remaining lease term - finance leases (in years)2.222.902.80
Weighted-average discount rate - operating leases6.50 %6.54 %6.59 %
Weighted-average discount rate - finance leases6.65 %6.69 %7.43 %
As of December 31, 2025 and 2024, the Company’s right-of-use assets from operating leases are $122.3 million and $117.0 million, respectively, which are reported in operating lease right-of-use assets in the Company’s consolidated balance sheets. As of December 31, 2025, the Company has outstanding operating lease obligations of $195.5 million, of which $33.6 million is reported in operating lease liabilities, current portion and $161.9 million is reported in operating lease liabilities, less current portion in the Company’s consolidated balance sheet. As of December 31, 2024, the Company had outstanding operating lease obligations of $184.5 million, of which $27.4 million is reported in operating lease liabilities, current portion and $157.1 million is reported in operating lease liabilities, less current portion in the Company’s consolidated balance sheet.
In the third quarter of 2024, the Company recorded an impairment charge of $18.7 million, which consisted of a right-of-use asset of $11.8 million and associated leasehold improvements of $6.9 million relating to one of its domestic facilities that was vacated in the fourth quarter of 2024 as a result of a change in strategic priorities. The Company used the income approach, under which the recoverability of the assets was measured by comparing the carrying amount of the asset to future undiscounted, pre-tax cash flows generated by the assets held. The fair value of the assets was determined using discounted cash flows, and the impairment charge recorded represents the difference between the carrying value and fair value of the impaired assets. The impairment charge recorded is included in impairment of long-lived and indefinite-lived assets in the Company’s consolidated statement of operations for the year ended December 31, 2024.
As of December 31, 2025 and 2024, the Company’s right-of-use assets from finance leases are $11.1 million and $19.8 million, respectively, which are reported in other long-term assets, net in the Company’s consolidated balance sheets. As of December 31, 2025, the Company has outstanding finance lease obligations of $12.1 million, of which $5.7 million is reported in other current liabilities and $6.4 million is reported in other long-term liabilities in the Company’s consolidated balance sheet. As of December 31, 2024, the Company had outstanding finance lease obligations of $21.0 million, of which $7.8 million is reported in other current liabilities and $13.2 million is reported in other long-term liabilities in the Company’s consolidated balance sheet.
Maturities of operating lease liabilities on an annual basis as of December 31, 2025 were as follows:
(In thousands)
2026$43,164 
202745,208 
202835,876 
202925,806 
203017,451 
Thereafter78,654 
Total minimum lease payments246,159 
Imputed interest(50,637)
Total$195,522 
Maturities of finance lease liabilities on an annual basis as of December 31, 2025 were as follows:
(In thousands)
2026$6,284
20275,201
20281,282
202993
203093
Thereafter36
Total minimum lease payments12,989
Imputed interest(861)
Total$12,128
Legal Matters
The Company accrues costs for certain legal proceedings and regulatory matters to the extent that it determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. While such accrued costs reflect the Company’s best estimate of the probable loss for such matters, the recorded amounts may differ materially from the actual amount of any such losses. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings, which may be exacerbated by various factors, including but not limited to, that they may involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; involve a large number of parties, claimants or regulatory bodies; are in the early stages of the proceedings; involve a number of separate proceedings and/or a wide range of potential outcomes; or result in a change of business practices.
As of the date of this Annual Report on Form 10-K, amounts accrued for legal proceedings and regulatory matters were not significant except for the amounts accrued related to the matters discussed below. However, it is possible that in a particular quarter or annual period the Company’s financial condition, results of operations, cash flow and/or liquidity could be materially adversely affected by an ultimate unfavorable resolution of, or development in, legal and/or regulatory proceedings, including as described below. Except for the proceedings discussed below, the Company believes that the ultimate outcome of any of the regulatory and legal proceedings that are currently pending against it should not have a material adverse effect on financial condition, results of operations, cash flow or liquidity.
Intellectual Property Litigation Matters
In November 2023, the Company filed suit against Geneoscopy, Inc. (“Geneoscopy”) in the United States District Court for the District of Delaware, alleging that certain of Geneoscopy’s products infringe the ‘781 Patent and seeking unspecified monetary damages and injunctive relief (the “’781 Action”) and in January 2024, the Company amended the complaint, alleging that Geneoscopy has made false and misleading statements in the marketing and promotion of its product, in violation of the Lanham Act. In May 2024, the Company filed a second complaint against Geneoscopy alleging infringement of the Company’s U.S. Patent No. 11,970,746 (the “’746 Patent”), which has been consolidated with the ’781 Action. Geneoscopy filed counterclaims against the Company challenging the validity of the patents at issue and alleging breach of contract, misappropriation of trade secrets, unfair competition, and other violations of state and federal law seeking unspecified monetary damages and injunctive relief. On July 16, 2024, the Company filed a motion for preliminary injunction seeking an order prohibiting Geneoscopy from selling its infringing Colosense test in the United States. On May 27, 2025, Geneoscopy filed amended counterclaims against the Company, alleging false advertising under the Lanham Act, as well as other related violations under state law. On August 21, 2025, the Company voluntarily withdrew its motion for preliminary injunction, without prejudice, to preserve the ability to refile after the U.S. Patent and Trademark Office concludes its review of additional asserted patents.
Geneoscopy petitioned the United States Patent and Trademark Office to institute an inter partes review (“IPR”) challenging the validity of the ‘781 Patent and the ‘746 Patent before the Patent Trial and Appeals Board (“PTAB”) and the PTAB instituted review for both patents. On July 9, 2025, the PTAB issued its decision finding all claims of the ‘781 Patent unpatentable. The Company filed a notice of appeal with the United States Court of Appeals for the Federal Circuit on September 10, 2025. On February 5, 2026, the PTAB issued its decision finding all claims of the '746 patent unpatentable. A notice of appeal may be filed on or before April 9, 2026. On February 20, 2025, Geneoscopy filed a motion to stay the district court litigation pending IPR of the ‘781 and ‘746 Patents, which the Court denied on August 21, 2025.
DOS Rule Matter
In September 2023, the Company’s wholly owned subsidiary Genomic Health, Inc., which was acquired in November 2019, entered into a settlement agreement with the United States of America, acting through the Department of Justice (“DOJ”) and on behalf of the Office of Inspector General of the Department of Health and Human Services, and two qui tam relators to resolve the previously disclosed civil investigation concerning Genomic Health’s compliance with the Medicare Date of Service billing regulations (the “DOS Rule Matter”). Genomic Health entered into the settlement agreement to avoid the delay, uncertainty and expense of protracted litigation. The settlement agreement contains no admission of liability by Genomic Health.
Under the terms of the settlement agreement, the Company made a payment of $32.5 million in September 2023, of which $22.4 million is included in general and administrative expenses in the Company’s consolidated statements of operations for the year ended December 31, 2023. Following the United States’ receipt of the settlement payment, the Company was released from any civil or administrative monetary claims under the civil False Claims Act and other specified civil statutes and common law theories of liability concerning the conduct identified in the settlement agreement.
On September 29, 2023, the United States District Court for the Eastern District of New York unsealed two qui tam actions filed under the False Claims Act involving the DOS Rule Matter, and on October 2, 2023, those two actions were dismissed with prejudice pursuant to the terms of the settlement agreement.
Gift Card Matter
In September 2023, the Company entered into a settlement agreement to resolve the previously disclosed False Claims Act qui tam suit that alleged a violation of the Federal Anti-Kickback Statute and False Claims Act for offering gift cards to patients in exchange for returning the Cologuard screening test (the “Qui Tam Suit”). In accordance with the settlement agreement, the Company made payment of $13.8 million plus legal fees in October 2023, which is included in general and administrative expenses in the Company's consolidated statement of operations for the year ended December 31, 2023. Following payment of the settlement amount, the Company was released from any civil or administrative monetary claims under the civil False Claims Act and other specified civil statutes and common law theories of liability concerning the conduct identified in the settlement agreement. On November 1, 2023, the court dismissed the qui tam suit with prejudice pursuant to the terms of the settlement agreement.

Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 19, 2025
2023Feb 21, 2024
2022Feb 21, 2023
2021Feb 22, 2022
2020Feb 16, 2021
2019Feb 21, 2020
2018Feb 21, 2019
2017Feb 22, 2018
2016Feb 21, 2017
2015Feb 24, 2016

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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