ORASURE TECHNOLOGIES INC (OSUR)

Results of Operations

For the six months ended June 30, 2026 compared to June 30, 2025.

CONSOLIDATED NET REVENUES

The table below shows an outline of total consolidated net revenues for the six months ended June 30, 2026 and 2025:

(1)Includes HIV, HCV, Syphilis, SickleSCAN® and SureQuick® product revenues.

(2)Includes Genomics, Microbiome, and Colli-Pee® product revenues.

(3)Includes substance abuse testing product revenues.

(4)Includes funded research and development contracts, royalty income, and grant revenues.

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Product and Services Revenues

Consolidated net revenues decreased 4% to $58.6 million for the six months ended June 30, 2026 from $61.2 million for the six months ended June 30, 2025.

Sales of the Company's Diagnostics products decreased 2% to $36.2 million for the six months ended June 30, 2026 from $36.9 million for the six months ended June 30, 2025. This decline is primarily attributable to lower international HCV revenues driven by reduced reimbursement subsidies in the Asian market and a large order shipped into Africa in the second quarter of 2025 that did not recur. Domestic HCV revenues also declined as a result of a large customer's HCV testing programs ending and not being renewed, as well as reduced funding associated with other programs. In addition, domestic HIV revenues decreased due to lower purchases under the Together Take Me Home program partially offset by higher international revenues associated with timing of customer orders. These decreases were partially offset by higher syphilis sales driven by new customers in the women's health market and the inclusion of SickleSCAN® revenues, a new revenue stream acquired through the BioMedomics, Inc. acquisition completed in November 2025.

Sample Management Solutions revenues remained largely flat at $18.9 million for the six months ended June 30, 2026 and 2025.

COVID-19 Diagnostics revenues decreased 96% to $19.0 thousand for the six months ended June 30, 2026 from $485.0 thousand for the six months ended June 30, 2025 due to lower overall demand for COVID-19 testing.

Risk Assessment testing revenues decreased to zero for the six months ended June 30, 2026 from $1.9 million for the six months ended June 30, 2025. The Company discontinued this line of business at the end of 2024 and the business wound down in early 2025.

Non-Product and Services Revenues

Non-product and services revenues increased 6% to $2.5 million for the six months ended June 30, 2026 from $2.3 million for the six months ended June 30, 2025 primarily due to an increase in funded R&D under certain BARDA contracts.

CONSOLIDATED OPERATING RESULTS

Consolidated gross profit margin increased to 42.9% for the six months ended June 30, 2026 from 41.6% for the six months ended June 30, 2025. The largest driver of the margin improvement is better absorption of fixed overhead costs due to operational efficiencies partially offset by higher scrap expense.

Consolidated operating loss for the six months ended June 30, 2026 was $17.8 million, compared to a $35.8 million operating loss reported for the six months ended June 30, 2025. Results for the six months ended June 30, 2026 benefited from a $22.5 million change in the estimated fair value of acquisition-related contingent consideration but were negatively impacted by the decrease in revenues and by higher operating expenses.

Research and development expenses increased 10% to $23.1 million for the six months ended June 30, 2026 from $21.0 million for the six months ended June 30, 2025 largely due to higher spend incurred for clinical trials for the CT/NG and Colli-Pee® devices.

Sales and marketing expenses remained largely flat at $13.4 million and $13.2 million for the six months ended June 30, 2026 and 2025, respectively.

General and administrative expenses increased 8% to $29.0 million for the six months ended June 30, 2026 from $26.8 million for the six months ended June 30, 2025, largely due to higher professional, consulting, and legal fees associated with the proxy statement, including stockholder activism costs.

All of the above contributed to the Company's operating loss of $17.8 million for the six months ended June 30, 2026, which included non-cash income of $22.5 million reflected in the change in the estimated fair value of acquisition-related contingent consideration, and non-cash charges of $5.1 million for stock-based compensation, and $4.7 million for depreciation and amortization. The Company's operating loss of $35.8 million for the six months ended June 30, 2025 included a non-cash charge of $5.9 million for stock-based compensation, $5.3 million for depreciation and amortization, and $1.2 million for the change in the estimated fair value of acquisition-related contingent consideration.

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CONSOLIDATED OTHER INCOME

Other income remained largely flat at $2.9 million for the six months ended June 30, 2026 and 2025.

CONSOLIDATED INCOME TAXES

The Company continues to believe the full valuation allowance established against its total U.S. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed. The Company has not achieved U.S. cumulative pre-tax earnings based on a rolling three year window as the Company has not achieved a level of sustained profitability that would, in its judgment, support the release of the valuation allowance. For the six months ended June 30, 2026 and 2025, the Company recorded income tax benefit and expense of $0.4 million and $1.5 million, respectively. During the six months ended June 30, 2026 and 2025, the Company had an effective tax rate of 2.5% and (4.7)%, respectively. The increase in the Company's tax rate was primarily due to the recording of a uncertain tax position in 2025 and projected break-even results in foreign operations in 2026 versus projected losses in 2025.

Liquidity and Capital Resources

The Company's cash and cash equivalents decreased to $160.6 million at June 30, 2026 from $199.3 million at December 31, 2025. The Company has $84.6 million, or 53%, of its $160.6 million of cash and cash equivalents held by DNAG, the Company's Canadian subsidiary.

The Company's working capital decreased to $197.8 million at June 30, 2026 from $222.1 million at December 31, 2025. Working capital is primarily a function of sales, purchase volumes, inventory requirements, and vendor payment terms.

Analysis of the Company's Cash Flows

Operating Activities

During the six months ended June 30, 2026, net cash used in operating activities was $23.8 million. Cash flows from operations can be significantly impacted by factors such as timing of receipts from customers, inventory purchases, and payments to vendors. The Company's net loss of $16.1 million included non-cash charges of a change in the estimated fair value of acquisition-related contingent consideration of $22.5 million, stock-based compensation expense of $5.1 million, depreciation and amortization expense of $4.7 million, a loss on equity investment of $1.6 million, and other non-cash charges aggregating to $0.2 million.

Changes in the Company's working capital accounts contributed to cash and included an increase in accrued expenses and other liabilities of $2.9 million largely associated with higher compensation-related accruals, a decrease in prepaid expenses and other assets of $2.5 million resulting from lower deposits paid, an increase of $1.3 million in accounts payable associated with the timing of spend on consulting services and inventory purchases, and an overall decrease in inventory balances of $0.9 million due to an increase in inventory reserves associated with expired inventory and lower COVID-19 inventory levels due to decreased demand. These contributions to cash were offset by an increase in accounts receivable of $3.7 million due to timing of shipments and invoicing and a decrease in deferred revenue of $0.6 million as work on grant projects is completed and earned.

Investing Activities

Net cash used in investing activities was $3.3 million for the six months ended June 30, 2026, for purchases of property and equipment.

Financing Activities

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Net cash used in financing activities was $8.5 million for the six months ended June 30, 2026, which was largely comprised of $7.0 million to repurchase common stock pursuant to the Company's stock repurchase plan and $1.5 million used for the repurchase of common stock to satisfy withholding taxes related to the vesting of restricted stock awarded to the Company's employees.

Resources

The Company's contractual obligations are included in Note 12 of its consolidated financial statements. The Company expects existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements over the next twelve months. The Company's cash requirements, however, may vary materially from those now planned due to many factors, including, but not limited to, the scope and timing of future strategic acquisitions, the progress of its research and development programs, the scope and results of clinical testing, the cost of any future litigation, the magnitude of capital expenditures, changes in existing and potential relationships with business partners, the timing and cost of obtaining regulatory approvals, the timing and cost of future stock purchases, the costs involved in obtaining and enforcing patents, proprietary rights and any necessary licenses, the cost and timing of expansion of sales and marketing activities, market acceptance of new products, competing technological and market developments, the impact of the current economic environment and other factors.

Critical Accounting Policies and Estimates

A more detailed review of the Company's critical accounting policies is contained in its Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC. No material changes have been made to such critical accounting policies during the six months ended June 30, 2026.

ITEM 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Statements below regarding future events or performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's actual results could be quite different from those expressed or implied by the forward-looking statements. Factors that could affect results are discussed more fully under the Item 1A, entitled “Risk Factors,” and elsewhere in this Annual Report. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance on the forward-looking statements. The Company undertakes no duty to update any forward-looking statements made herein after the date of this Annual Report.

The following discussion should be read in conjunction with the consolidated financial statements contained herein and the notes thereto, along with the Section entitled “Critical Accounting Policies and Estimates,” set forth below. This section of this Annual Report on Form 10-K for the year ended December 31, 2025 (this "Annual Report") generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussion of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Business Overview

The Company's business consists of the development, manufacture, marketing, sale and distribution of simple, easy to use diagnostic products and specimen collection devices using its proprietary technologies, as well as other diagnostic products including immunoassays and other in vitro diagnostic tests that are used on other specimen types. Our diagnostic products include tests for diseases including HIV, Hepatitis C, Syphilis, Sickle Cell and COVID-19 that are performed on a rapid basis at the point of care. These products are sold in the United States and internationally to various clinical laboratories, hospitals, clinics, community-based organizations, and other public health organizations, distributors, government agencies, physicians’ offices, and commercial and industrial entities. The Company's HIV and COVID-19 products are also sold in a consumer-friendly format in the OTC market in the U.S. and, in the case of the HIV and HCV products, as a self-test to individuals in a number of other countries, including, for the HIV products, as an oral swab in-home test for HIV-1 and HIV-2 in Europe, and for the HCV products, as an OTC test. In December 2025, the Company submitted a 510(k) to the FDA for clearance of its rapid molecular self-test for CT/NG, which is currently under review.

The Company's business also includes sample management solutions and services that are used by clinical laboratories, direct-to-consumer laboratories, researchers, pharmaceutical companies, and animal health service and product providers. The revenues from sample management solutions are derived from product sales to commercial customers and sales into the academic and research markets. Customers span the disease risk management, diagnostics, pharmaceutical, biotech, and companion animal market segments. The Company has also developed collection devices for the emerging microbiome market, which focuses on studying microbiomes and their effect on human and animal health. The Company also has a urine collection device which allows for the volumetric collection of first void urine. Initial sales of this product for research use only are occurring primarily through distributors and collaborations in the liquid biopsy and sexually transmitted disease markets. In December 2025, the Company also submitted a 510(k) to the FDA for clearance of its Colli-Pee® at-home urine collection device for sexually transmitted infections, which is currently under review.

Recent Developments

Risk Assessment Testing

In the third quarter of 2024, the Company announced the discontinuance of sales of its risk assessment product line which was completed in the second quarter of 2025. Sales of its risk assessment products contributed $1.9 million and $8.4 million to revenues during the twelve months ended December 31, 2025 and 2024, respectively. During the first quarter of 2025, the Company sold certain assets that made up the risk assessment product line including certain intellectual property, contracts, permits, and equipment.

Acquisition of BioMedomics, Inc.

In November 2025, the Company acquired BioMedomics, Inc. (“BioMedomics”), pursuant to which BioMedomics became a wholly-owned subsidiary of the Company. The BioMedomics acquisition expands the Company's diagnostic portfolio by adding SickleSCAN®, a rapid, point-of-need test for sickle cell disease that is sold outside of the United States.

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Results of Operations

The Company's consolidated net loss for the year ended December 31, 2025 was $68.7 million, or $0.94 per share on a fully diluted basis, compared to consolidated net loss of $19.5 million, or $0.26 per share on a fully diluted basis, for the year ended December 31, 2024.

Year ended December 31, 2025 compared to December 31, 2024.

CONSOLIDATED NET REVENUES

The table below shows a summary of total consolidated net revenues (dollars in thousands) for the years ended December 31, 2025 and 2024:

(1)Includes HIV, HCV, Syphilis, and SureQuick® product revenues.

(2)Includes Genomics, Microbiome, and Colli-Pee® product revenues.

(3)Includes substance abuse testing product revenues.

(4)Includes COVID-19 Sample Management Solutions product revenues.

(5)Includes funded research and development contracts, royalty income, and grant revenues.

Product and Services Revenues

Consolidated net revenues decreased 38% to $115.0 million for the year ended December 31, 2025 from $185.8 million for the year ended December 31, 2024.

Sales of the Company's Diagnostics products decreased 12% to $66.5 million for the year ended December 31, 2025 from $75.9 million for the year ended December 31, 2024. This decrease in revenues is largely due to lower international HIV revenues primarily driven by a decrease in funding and customer ordering patterns in Africa and Asia. Lower sales of the Company's HIV domestic products due to a decrease in overall funding impacting HIV programs also contributed to the decline in diagnostic revenues. Offsetting these decreases in revenues is an increase in Syphilis revenue resulting from the launch in the second quarter of 2024.

Sample Management Solutions revenues decreased by 25% to $38.4 million for the year ended December 31, 2025 compared to $51.0 million for the year ended December 31, 2024. Sales of the Company's Sample Management Solutions are being impacted by a large customer's bankruptcy.

Risk Assessment testing revenues decreased 78% to $1.9 million for the year ended December 31, 2025 from $8.4 million for the year ended December 31, 2024. The Company discontinued this line of business at the end of 2024 and the business wound down in early 2025.

COVID-19 Diagnostics revenues decreased 99% to $0.6 million for the year ended December 31, 2025 from $45.1 million for the year ended December 31, 2024 due to decreased sales of the Company's InteliSwab® tests through its U.S. government procurement contracts. The Company experienced a significant decline in COVID-19 revenues during 2024

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due to the fulfillment of these contracts and lower overall demand for COVID-19 testing and anticipates that this trend will continue into the foreseeable future.

Molecular Services revenues, which were largely derived from the Company's microbiome molecular sequencing services, were nil for the year ended December 31, 2025 compared to $1.7 million for the year ended December 31, 2024. The decrease in services revenues was due to the decision to exit this line of business.

Non-Product and Services Revenues

Non-product and services revenues increased 391% to $6.0 million for the year ended December 31, 2025 from $1.2 million for the year ended December 31, 2024 primarily due to the recognition of revenue under funded R&D contracts that were assumed by the Company as a result of the Sherlock acquisition at the end of 2024 as well as an increase in funded R&D under other BARDA contracts.

CONSOLIDATED OPERATING RESULTS

Consolidated gross profit margin decreased to 41.9% for the year ended December 31, 2025 from 42.7% for the year ended December 31, 2024. The largest driver of the margin decline was a negative product mix driven by lower InteliSwab® sales that generate higher gross margins and lower genomics sales that also generate higher gross margins. Also contributing to the decline in margins was lower absorption of fixed overhead costs due to lower revenues and production. The termination of the microbiome molecular sequencing services business which historically dragged down the gross margin rate helped to improve the gross margin rate during the period along with the higher non-product revenues which contribute 100% to gross margin.

Consolidated operating loss for the year ended December 31, 2025 was $72.0 million, compared to a $28.3 million operating loss reported for the year ended December 31, 2024. Results for the year ended December 31, 2025 were negatively impacted by the decrease in revenues, lower gross margins earned on the revenues and by higher operating expenses. Results for the year ended December 31, 2025 included change in the estimated fair value of acquisition-related contingent consideration of $4.6 million offset by gain on sale of assets of $0.7 million. Results for the year ended December 31, 2024 included impairment charges of $4.4 million.

Research and development expenses increased 63% to $42.5 million for the year ended December 31, 2025 from $26.0 million for the year ended December 31, 2024 largely due to higher spend incurred for clinical trials for the CT/NG device and additional research and development operational expense layered in from the acquired Sherlock companies.

Sales and marketing expenses decreased 16% to $26.1 million for the year ended December 31, 2025 from $31.0 million for the year ended December 31, 2024 primarily due to decreased employee costs associated with a reduction in headcount, and lower market research and advertisi

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