Natera (NTRA) 10-Q 7 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2020
Entity File Number	001-37478
Entity Registrant Name	Natera, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	01-0894487
Entity Address, Address Line One	201 Industrial Road, Suite 410
Entity Address, City or Town	San Carlos
Entity Address, State or Province	CA
Entity Address, Country	US
Entity Address, Postal Zip Code	94070
City Area Code	650
Local Phone Number	249-9090
Title of 12(g) Security	Common Stock, par value $0.0001 per share
Trading Symbol	NTRA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		78,725,320
Entity Central Index Key	0001604821
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 74,144	$ 61,926
Restricted cash, current portion	55	55
Short-term investments	331,681	379,065
Accounts receivable, net of allowance of $3,020 in 2020 and $2,919 in 2019	61,577	53,351
Inventory	14,161	12,394
Prepaid expenses and other current assets, net	15,590	16,376
Total current assets	497,208	523,167
Property and equipment, net	26,718	23,283
Operating lease right-of-use assets	22,620	23,730
Other assets	12,093	12,476
Total assets	558,639	582,656
Current liabilities:
Accounts payable	8,369	8,604
Accrued compensation	15,953	16,088
Other accrued liabilities	50,393	49,043
Deferred revenue, current portion	51,840	56,016
Short-term debt financing	50,087	50,123
Total current liabilities	176,642	179,874
Long-term debt financing	72,881	73,656
Deferred revenue, long-term portion	25,152	23,808
Operating lease liabilities, long-term portion	24,727	26,297
Other long-term liabilities	310	310
Total liabilities	299,712	303,945
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock, $0.0001 par value: 750,000 shares authorized at both March 31, 2020 and December 31, 2019, respectively; 78,652 and 78,005 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	8	8
Additional paid in capital	988,199	976,955
Accumulated deficit	(734,946)	(699,171)
Accumulated other comprehensive income	5,666	919
Total stockholders' equity	258,927	278,711
Total liabilities and stockholders' equity	$ 558,639	$ 582,656

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets
Allowances on accounts receivable	$ 3,020	$ 2,919
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	750,000	750,000
Common stock, shares issued	78,652	78,005
Common stock, shares outstanding	78,652	78,005

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues
Total revenues	$ 94,012,000	$ 66,824,000
Cost and expenses
Cost of revenues	41,520,000	41,605,000
Research and development	18,225,000	11,435,000
Selling, general and administrative	65,681,000	43,832,000
Total cost and expenses	128,884,000	98,570,000
Loss from operations	(34,872,000)	(31,746,000)
Interest expense	(2,464,000)	(2,724,000)
Interest and other income, net	1,987,000	453,000
Loss before income taxes	(35,349,000)	(34,017,000)
Income tax expense	(23,000)	(74,000)
Net loss	(35,372,000)	(34,091,000)
Unrealized gain on available-for-sale securities, net of tax	4,747,000	286,000
Comprehensive loss	$ (30,625,000)	$ (33,805,000)
Net loss per share (Note 12):
Basic and diluted (in dollars per share)	$ (0.45)	$ (0.54)
Weighted-average number of shares used in computing basic and diluted net loss per share:
Basic and diluted (in shares)	78,287	62,831
Product
Revenues
Total revenues	$ 87,046,000	$ 63,364,000
Licensing and other
Revenues
Total revenues	6,966,000	3,460,000
Cost and expenses
Cost of revenues	$ 3,458,000	$ 1,698,000

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 7	$ 607,236	$ (552)	$ (574,529)	$ 32,162
Balance (in shares) at Dec. 31, 2018	62,083
Cumulative-effect adjustment upon adoption		(185)		185
Issuance of common stock upon exercise of stock options		2,578			2,578
Issuance of common stock upon exercise of stock options (in shares)	1,070
Vesting of restricted stock (in shares)	187
Stock based compensation		4,051			4,051
Unrealized gain on available-for-sale securities			286		286
Net loss				(34,091)	(34,091)
Balance at Mar. 31, 2019	$ 7	613,680	(266)	(608,435)	4,986
Balance (in shares) at Mar. 31, 2019	63,340
Balance at Dec. 31, 2019	$ 8	976,955	919	(699,171)	$ 278,711
Balance (in shares) at Dec. 31, 2019	78,005				78,005
Cumulative-effect adjustment upon adoption				(403)	$ (403)
Issuance of common stock upon exercise of stock options		3,826			3,826
Issuance of common stock upon exercise of stock options (in shares)	356
Vesting of restricted stock (in shares)	291
Stock based compensation		7,418			7,418
Unrealized gain on available-for-sale securities			4,747		4,747
Net loss				(35,372)	(35,372)
Balance at Mar. 31, 2020	$ 8	$ 988,199	$ 5,666	$ (734,946)	$ 258,927
Balance (in shares) at Mar. 31, 2020	78,652				78,652

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities
Net loss	$ (35,372)	$ (34,091)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,826	1,920
Inventory excess adjustments	(64)	101
Premium amortization and discount accretion on investment securities	721	70
Stock-based compensation	7,417	4,051
Non-cash lease expense	1,940	1,890
Amortization of debt discount	121	98
Other non-cash charges		8
Other non-cash (benefits)	(57)
Provision for credit losses	1,387
Changes in operating assets and liabilities
Accounts receivable	(8,786)	2,145
Inventory	(1,703)	(216)
Prepaid expenses and other current assets	(3,227)	(2,135)
Other assets	99	201
Accounts payable	217	(5,466)
Accrued compensation	(135)	(1,850)
Other accrued liabilities	3,348	1,018
Deferred revenue	(2,832)	437
Net cash used in operating activities	(35,100)	(31,819)
Investing activities
Purchases of investments	(53,876)	(18,628)
Proceeds from sale of investments	11,500
Proceeds from maturity of investments	93,785	32,500
Purchases of property and equipment, net	(7,917)	(955)
Net cash provided by investing activities	43,492	12,917
Financing activities
Proceeds from exercise of stock options	3,826	2,578
Net cash provided by financing activities	3,826	2,578
Net (decrease) increase in cash, cash equivalents and restricted cash	12,218	(16,324)
Cash, cash equivalents and restricted cash, beginning of period	61,981	51,004
Cash, cash equivalents and restricted cash, end of period	74,199	34,680
Supplemental non-cash investing and financing activities:
Obtaining right-of-use assets in exchange for lease liabilities		28,191
Purchases of property and equipment in accounts payable and accruals	$ 2,657	$ 199

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2020
Description of Business
Description of Business	1. Description of Business Natera, Inc. (the "Company") was formed in the state of California as Gene Security Network, LLC in November 2003 and incorporated in the state of Delaware in January 2007. The Company’s mission is to change the management of genetic disease worldwide. The Company operates a laboratory certified under the Clinical Laboratory Improvement Amendments ("CLIA") providing a host of preconception and prenatal genetic testing services. The Company determines its operating segments based on the way it organizes its business to make operating decisions and assess performance. The Company has only one segment, which is the discovery, development and commercialization of genetic testing services, and it has a subsidiary that operates in the state of Texas. The Company's product offerings include its Panorama Non-Invasive Prenatal Test ("NIPT") that screens for chromosomal abnormalities of a fetus typically with a blood draw from the mother; Vistara (“Vistara”), a single-gene mutations screening test performed to identify single-gene disorders; Horizon Carrier Screening ("HCS") to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier’s children; Spectrum Pre-implantation Genetic Screening ("PGS") and Spectrum Pre-implantation Genetic Diagnosis ("PGD") to analyze chromosomal anomalies or inherited genetic conditions during an in vitro TM

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. The unaudited interim condensed consolidated financial information includes only adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the full year or the results for any future periods. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date, these financial statements should be read in conjunction with the audited financial statements, and related notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2020. Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. The Company had a net loss of $35.4 million for the three months ended March 31, 2020 and recorded a cumulative-effect adjustment of $0.4 million upon the adoption of ASU 2016-13 on January 1, 2020, which increased the accumulated deficit to $734.9 million at March 31, 2020 from $699.2 million at December 31, 2019. As of March 31, 2020, the Company had $74.1 million in cash and cash equivalents, $331.7 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 10, Debt Debt The Company continues to develop and commercialize future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders will experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to the Company. If the Company is unable to obtain additional financing, it may be required to delay the development and commercialization of its products and significantly scale back its business and operations. In April 2019, the Company completed an underwritten equity offering to and sold 6,052,631 shares of its common stock at a price to the public of $19 per share. Before offering expenses of $0.6 million, the Company received proceeds of $108.1 million net of the underwriting discount. In October 2019, the Company completed another underwritten equity offering and sold 6,571,428 shares of its common stock at a price to the public of $35 per share. Before offering expenses of $0.4 million, the Company received proceeds of $216.2 million net of the underwriting discount. In April 2020, the Company executed a purchase agreement for the sale of $287.5 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 (the “Convertible Notes”) to the initial purchasers in a private placement and for initial resale to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. A maximum of 9,634,700 shares of the Company’s common stock may be issued upon conversion of the Convertible Notes, subject to adjustment. The net proceeds from the offering of the Convertible Notes, given the initial purchasers’ full exercise of their option to purchase additional Convertible Notes, were approximately $278.9 million net of underwriting discount. In April 2020, the Company used a portion of the net proceeds from the offering of the Convertible Notes to repay its obligations under its 2017 Term Loan with OrbiMed. The payoff amount was $79.2 million, which includes the principal amount of $75.0 million and $4.2 million of early payment penalties and accrued interest through the payment date. Based on the Company’s current business plan, the Company believes that its existing cash and marketable securities will be sufficient to meet its anticipated cash requirements for at least 12 months after May 7, 2020. Principles of Consolidation ​ The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. The Company established a subsidiary that operates in the state of Texas to support the Company’s laboratory and operational functions. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include the allowance for doubtful accounts, the operating right-of-use assets and the associated lease liabilities, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, stock-based compensation, the fair value of common stock, income tax uncertainties, and the expected consideration to be received from contracts with customers. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors, including contractual terms and statutory limits; however, actual results could differ from these estimates and could have an adverse effect on the Company's financial statements. Fair Value The Company discloses the fair value of financial instruments for financial assets and liabilities for which the value is practicable to estimate. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions. Restricted Cash The Company separately discloses restricted cash from cash and cash equivalents. As of March 31, 2020, short-term restricted cash totaled $0.1 million held as collateral for the settlement of foreign Credit Losses ​ Trade accounts receivable and other receivables. ​ Available-for-sale debt securities. ​ Investments Investments consist primarily of debt securities such as U.S. Treasuries, U.S. agency and municipal bonds. Management determines the appropriate classification of securities at the time of purchase and re-evaluates such determination at each balance sheet date. The Company generally classifies its entire investment portfolio as available-for-sale. The Company views its available-for-sale portfolio as available for use in current operations. Accordingly, the Company classifies all investments as short-term, even though the stated maturity may be more than one year from the current balance sheet date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. Risk and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic information is rapidly evolving. Our test volumes began to decrease in the second half of March 2020 as a result of the COVID-19 pandemic spreading to the United States and resulting limitations and reordering of priorities across the U.S. healthcare system. The Company expects test volumes to continue to be adversely affected by COVID-19 and cannot predict when volumes will return to normal. Financial instruments that potentially subject the Company to credit risk consist of cash, accounts receivable and investments. The Company limits its exposure to credit loss by placing its cash in financial institutions with high credit ratings. The Company's cash may consist of deposits held with banks that may at times exceed federally insured limits. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. The Company performs evaluations of financial conditions for insurance carriers, patients, clinics and laboratory partners and generally does not require collateral to support credit sales. For the three months ended March 31, 2020, and 2019, there were no customers exceeding 10% of total revenues on an individual basis. As of March 31, 2020 and December 31, 2019, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ​ ● Identification of a contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Revenue recognition when, or as, the performance obligations are satisfied ​ Revenue Recognition ​ Cost of Product Revenues The components of cost of product revenues are material and service costs, impairment charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical records, order and delivery systems, shipping charges to transport samples, third-party test fees and allocated overhead including rent, information technology costs, equipment depreciation and utilities. Costs associated with the performance of diagnostic services are recorded as tests are accessioned. Cost of Licensing and Other Revenues Stock-Based Compensation Stock-based compensation is related to stock options and restricted stock units (“RSUs”) granted to the Company’s employees and is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards on a straight-line basis. No compensation cost is recognized when the requisite service has not been met and the awards are therefore forfeited. ​ For stock options with market conditions, the Company derives the requisite service period using the Monte Carlo simulation model. For stock options and RSUs that vest upon meeting performance conditions or market conditions in combination with performance conditions, the Company derives the requisite service period from the grant date to the date it is probable that the vesting conditions will be met. ​ The fair value of non-employee awards is determined based on a one-time measurement at the grant date, and it is no longer subject to periodic remeasurement. The Company continues to recognize stock-based compensation expense as services are rendered by the non-employees over the vesting period, which is accounted for on a straight-line basis. The Company uses the Black-Scholes option-pricing model and the Monte Carlo simulation model to estimate the fair value of stock options issued to employees and non-employees. The model requires the input of the Company's expected stock price volatility, the expected term of the awards, and a risk-free interest rate. Determining these assumptions requires significant judgment. See further discussion on the valuation assumptions used under Note 9, Stock-based Compensation Capitalized Software Held for Internal Use The Company capitalizes salaries and related costs of employees and consultants who devote time to the development of internal-use software development projects. Capitalization begins during the application development stage, once the preliminary project stage has been completed. If a project constitutes an enhancement to previously developed software, the Company assesses whether the enhancement is significant and creates additional functionality to the software, thus qualifying the work incurred for capitalization. Once the project is available for general release, capitalization ceases and the Company estimates the useful life of the asset and begins amortization. The Company periodically assesses whether triggering events are present to review internal-use software for impairment. Changes in estimates related to internal-use software would increase or decrease operating expenses or amortization recorded during the reporting period. The Company amortizes its internal-use software over the estimated useful lives of three years. The net book value of capitalized software held for internal use was $1.1 million and $1.2 million as of March 31, 2020 and December 31, 2019, respectively. Amortized expense for amounts previously capitalized for the three months ended March 31, 2020 and 2019 was $0.3 million for both periods. Accumulated Other Comprehensive Income (Loss) Comprehensive loss and its components encompass all changes in equity other than those with stockholders, and include net loss, unrealized gains and losses on available-for-sale marketable securities. ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ March 31, ​ 2020 ​ 2019 ​ (in thousands) Beginning balance $ 919 ​ $ (552) Net unrealized gain on available-for-sale securities, net of tax ​ 4,747 ​ ​ 286 Reclassifications of losses realized from sale of available-for-sale securities ​ — ​ ​ — Increase in other comprehensive loss ​ 4,747 ​ ​ 286 Ending balance $ 5,666 ​ $ (266) ​ Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for potential dilutive shares. For purposes of the diluted net loss per share calculation, outstanding common stock options, RSUs, and ESPP are considered potential dilutive shares but are excluded from this calculation as the result becomes anti-dilutive, unless the consideration of any one of them gives a dilutive effect. ​ Property and Equipment Property and equipment, including purchased and internally developed software, are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are generally three five years Impairment of Long-lived Assets The Company periodically evaluates the carrying value of its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amount of the long-lived assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed below, the Company believes that the impact of accounting standards updates recently issued that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Goodwill - Internal-Use Software Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 ‑ 40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments amortized costs. The Company adopted ASU 2016-13, as amended, effective January 1, 2020 using the modified retrospective method and recorded a cumulative-effect adjustment of $0.4 million in retained earnings as of January 1, 2020. Collaborative Arrangements Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The guidance will be effective for the Company in the first quarter of our fiscal year 2021. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848)

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2020
Revenue Recognition
Revenue Recognition	­­ 3. Revenue Recognition The Company recognizes revenues when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers. Product Revenues ​ Product revenues are derived from contracts with insurance carriers, laboratory partners and patients in connection with sales of prenatal genetic tests. The majority of the Company’s revenues is derived from Panorama NIPT, HCS (as defined in Note 1, Description of Business ​ A performance obligation represents a promise in a contract to transfer a distinct good or service to a customer, which represents a unit of accounting in accordance with ASC 606. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. A portion of the consideration should be allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company evaluates its contracts with insurance carriers, laboratory partners and patients and identifies the performance obligations in those contracts, which are the delivery of the test results. ​ The total consideration which the Company expects to collect in exchange for the Company’s products is an estimate and may be fixed or variable. Consideration includes reimbursement from both patients and insurance carriers, adjusted for variable consideration related to disallowed cases, discounts, refunds and doubtful accounts, and is estimated using the expected value approach. For insurance carriers with similar reimbursement characteristics, the Company uses a portfolio of relevant historical data to estimate variable consideration and total collections for the Company’s products. The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. The consideration expected from laboratory partners usually includes a fixed amount, but it can be variable depending on the volume of tests performed, and the Company determines the variable consideration using the expected value approach. For insurance carriers, laboratory partners and patients, the Company allocates the total consideration to a single performance obligation, which is the delivery of the test results to the customers. ​ When assessing the total consideration for insurance carriers and patients, a certain percentage of revenues is further constrained for estimated refunds. ​ The Company generally bills an insurance carrier, a laboratory partner or a patient upon delivery of test results. The Company also bills patients directly for out-of-pocket costs involving co-pays and deductibles that they are responsible for. Tests billed to insurance carriers and directly to patients usually take an average of nine two ​ Product revenue is recognized in an amount equal to the total consideration (as described above) at a point in time when the test results are delivered. The Company reserves certain amounts in other accrued liabilities on the balance sheet in anticipation of requests for refunds of payments previously made by insurance carriers, which are accounted for as reductions in product revenues in the statement of operations and comprehensive loss. During the three months ended March 31, 2020, $1.0 million was released from amounts previously held in reserves in other accrued liabilities and recognized as product revenue, compared to $0.5 million for the three months ended March 31, 2019. ​ Licensing and Other Revenues ​ The Company recognizes licensing revenues from its cloud-based distribution service offering, Constellation, by granting licenses to its licensees to use certain of the Company’s proprietary intellectual properties and cloud-based software and IVD kits. The Company also recognizes revenues from the Signatera research use only (“RUO”) offering, the Qiagen LLC, BGI Genomics Co., Ltd., and Foundation Medicine, Inc. agreements. Constellation The laboratory partners with which the Company enters into a licensing arrangement represent the licensees and are identified as customers. The licensees do not have the right to possess the Company’s software, but rather receive professional services through the cloud software. These arrangements often include: (i) the delivery of the professional services through the cloud software, (ii) the necessary support and training, and (iii) the IVD kits to be consumed as tests are processed. The Company does not consider the software as a service, the support and training as being distinct in the context of such arrangements, and therefore they are combined as a single performance obligation. The software, support and training are delivered simultaneously to the licensees over the term of the arrangement. The Company provides IVD kits that are customized for its licensees to process tests using its cloud-based software. IVD kits revenues are recognized based on their standalone selling price at a point in time upon delivery to the licensees and expiration of their right of return. The Company bills the majority of licensees, who process the tests in their laboratories, a fixed price for each test processed. Licensing revenues are recognized as the performance obligations are satisfied (i.e., upon the delivery of each test) and reported in licensing and other revenues in the statements of operations and comprehensive loss Signatera The Company enters into agreements with pharmaceutical companies to utilize the Company’s Signatera tests typically to study new cancer treatments or to validate the outcomes of clinical trials for which the pharmaceutical companies are identified as customers. Such arrangements generally involve performing whole exome sequencing (“WES”) services and the testing of patient samples to detect cancer mutations using its Signatera test. Each test is billable to customers and the personalized cancer profile also makes each test distinct within the context of the contract as customers can exercise control over the test results upon delivery. The company allocates the contract price to each test using the stand-alone selling price for each service and recognizes the test processing revenue as individual test results are delivered to customers. Qiagen mitigate the risk of significant reversal of the cumulative revenue in the subsequent periods. Accordingly, no revenues were recognized on the prepaid royalties that may be subject to a refund. BGI Genomics ​ ​ ​ The Company is responsible for granting a license to specified intellectual property and performing certain development activities to customize its genetic testing assays for oncology and NIPT for use with BGI Genomics’ sequencing instruments and proprietary technology platform. Revenue associated with these performance obligations is recognized over time using the input method, based on costs incurred to perform the development services, since the level of costs incurred over time best reflect the transfer of development services. Revenue associated with the assay interpretation services will be recognized upon delivery of these services. Funds received in advance are recorded as deferred revenue and will be recognized as the related services are delivered. The initial transaction price was primarily comprised of license and milestone fees. The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. Certain milestone and license fees were constrained and not included in the transaction price due to the uncertainties of research and development. The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The allocation of the transaction price was performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately. In accordance with ASC 340-40, any incremental costs incurred to obtain a contract with a customer are required to be capitalized and amortized over the period in which the goods and services are transferred to the customer. The Company has elected to apply a practical expedient under ASC 340-40 to recognize the incremental costs of obtaining a contract as an expense when incurred provided that the amortization period of such costs, if capitalized, is one year or less. The incremental costs incurred in connection with the BGI Genomics arrangement is not material on an accumulated basis and therefore will not be capitalized on the balance sheet but will be expensed as incurred. Foundation Medicine, Inc. In August 2019, the Company entered into a License and Collaboration Agreement (“the Foundation Medicine Agreement”) with Foundation Medicine, Inc. (“Foundation Medicine”) to develop and commercialize personalized circulating tumor DNA monitoring assays, for use by biopharmaceutical and clinical customers who order Foundation Medicine’s FoundationOne CDx. The agreement has an initial term of five years, expiring in August 2024, with automatic renewals thereafter for successive one-year terms, unless the agreement is earlier terminated in accordance with its terms. Natera and Foundation Medicine will share the revenues generated from both biopharmaceutical and clinical customers in accordance with the terms of the agreement. The agreement provides for approximately $13.3 million in upfront licensing fees and prepaid revenues payable to Natera, and up to approximately $32.0 million in minimum annual payments and payments tied to Natera’s achievement of certain developmental, regulatory, and commercial milestones. As of December 31, 2019, the Company received $16.3 million of these amounts, of which $3.0 million was for achieving certain milestones, and $13.3 million was for licensing fees and prepaid revenue. No additional payments have been received in the first quarter of 2020. ​ Pursuant to the agreement, the Company will provide development services in conjunction with granting the use of the Company’s intellectual property. Following completion of those development services, the Company will provide assay testing services over the term of the agreement. The Company has concluded that the license is not a distinct performance obligation as it is highly interrelated and interdependent with the related development services. Therefore, license and related development services represent a single performance obligation. ​ The Company is responsible for providing the technology license and certain development services that are required to customize its proprietary Signatera test to work with Foundation Medicine’s FoundationOne CDx. The intellectual property has been licensed to Foundation Medicine for the customized test. In addition, the Company is responsible for delivering clinical study plans in order to demonstrate efficacy of the customized test. Revenues associated with each of the performance obligations are recognized over time using the input method, based on costs incurred to perform the development services, since the level of costs incurred over time best reflect the transfer of development services. Revenue associated with the assay testing services will be recognized upon delivery of these services. Funds received in advance are recorded as deferred revenue and will be recognized as the related services are delivered. ​ The initial transaction price was primarily comprised of license and milestone fees. The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. Certain milestone fees were constrained and not included in the transaction price due to the uncertainties of research and development. The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The allocation of the transaction price was performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately. ​ In accordance with ASC 340-40, any incremental costs incurred to obtain a contract with a customer are required to be capitalized and amortized over the period in which the goods and services are transferred to the customer. The Company has elected to apply a under ASC 340-40 to recognize the incremental costs of obtaining a contract as an expense when incurred provided that the amortization period of such costs, if capitalized, is one year or less. Disaggregation of Revenues ​ Our disaggregated revenues were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2020 ​ 2019 (Amounts in thousands) ​ ​ ​ ​ ​ Product revenues ​ ​ ​ ​ ​ ​ Sale of genetic tests ​ $ 87,046 ​ $ 63,364 Licensing and other ​ ​ ​ ​ ​ Constellation and paternity ​ ​ 1,367 ​ ​ 1,332 License and development services ​ ​ 4,802 ​ ​ 148 Other ​ ​ 797 ​ ​ 1,980 Licensing and other revenues ​ ​ 6,966 ​ ​ 3,460 Total revenues ​ $ 94,012 ​ $ 66,824 ​ The Company measures its performance results primarily based on revenues recognized from the three categories described below. The following table shows disaggregation of revenues by payer types: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2020 ​ 2019 (Amounts in thousands) ​ ​ ​ ​ ​ Insurance carriers ​ $ 70,672 ​ $ 50,201 Laboratory and other partners ​ ​ 15,683 ​ ​ 10,023 Patients ​ ​ 7,657 ​ ​ 6,600 Total revenues ​ $ 94,012 ​ $ 66,824 ​ The following table presents total revenues by geographic area based on the location of the Company’s payers: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ 2020 2019 (Amounts in thousands) ​ ​ ​ ​ ​ United States $ 86,731 $ 60,283 Americas, excluding U.S. ​ 782 ​ 818 Europe, Middle East, India, Africa ​ 3,476 ​ 4,004 Asia Pacific and Other ​ 3,023 ​ 1,719 Total revenues $ 94,012 $ 66,824 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ Balance at ​ ​ March 31, ​ December 31, (Amounts in thousands) ​ 2020 ​ 2019 Assets: ​ ​ ​ ​ ​ ​ Accounts receivable ​ $ 61,577 ​ $ 53,351 Liabilities: ​ ​ ​ ​ ​ ​ Deferred revenue, current portion ​ $ 51,840 ​ $ 56,016 Deferred revenue, long-term portion ​ ​ 25,152 ​ ​ 23,808 Total deferred revenues ​ $ 76,992 ​ $ 79,824 ​ ​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ Revenues ​ ​ (in thousands) Balance at December 31, 2019 ​ $ 79,824 Increase in deferred revenues ​ ​ 710 Revenue recognized during the period that was included in ​ ​ (3,455) Revenue recognized from performance obligations satisfied ​ ​ (87) Balance at March 31, 2020 ​ $ 76,992 ​ ​

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
Fair Value Measurements
Fair Value Measurements	4. Fair Value Measurements The Company's financial assets and liabilities carried at fair value are comprised of investment assets that include money market and investments. The fair value accounting guidance requires that assets and liabilities be carried at fair value and classified in one of the following three categories: Level I: Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Level II: Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves. Level III: Inputs that are unobservable data points that are not corroborated by market data. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ December 31, 2019 ​ Level I Level II Level III Total Level I Level II Level III Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market deposits ​ $ 35,818 ​ $ — ​ $ — ​ $ 35,818 ​ $ 22,477 ​ $ — ​ $ — ​ $ 22,477 U.S. Treasury securities ​ ​ 249,314 ​ ​ — ​ ​ — ​ ​ 249,314 ​ ​ 293,157 ​ ​ — ​ ​ — ​ ​ 293,157 Municipal securities ​ ​ — ​ ​ 82,367 ​ ​ — ​ ​ 82,367 ​ ​ — ​ ​ 85,908 ​ ​ — ​ ​ 85,908 Total financial assets ​ $ 285,132 ​ $ 82,367 ​ $ — ​ $ 367,499 ​ $ 315,634 ​ $ 85,908 ​ $ — ​ $ 401,542 ​

Financial Instruments

Financial Instruments	3 Months Ended
	Mar. 31, 2020
Financial Instruments
Financial Instruments	5. Financial Instruments The Company elected to invest a portion of its cash assets in conservative, income earning, and liquid investments. Cash equivalents and investments, all of which are classified as available-for-sale securities, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ December 31, 2019 ​ Amortized Gross Gross Estimated Fair Value Amortized Gross Gross Estimated Fair Value ​ ​ (in thousands) Money market deposits ​ $ 35,818 ​ $ — ​ $ — ​ $ 35,818 ​ $ 22,477 ​ $ — ​ $ — ​ $ 22,477 U.S. Treasury securities ​ 243,821 ​ ​ 5,493 ​ ​ — ​ 249,314 ​ 292,506 ​ 731 ​ (80) ​ 293,157 Municipal securities ​ ​ 82,214 ​ ​ 195 ​ ​ (42) ​ ​ 82,367 ​ ​ 85,638 ​ ​ 277 ​ ​ (7) ​ ​ 85,908 Total ​ $ 361,853 ​ $ 5,688 ​ $ (42) ​ $ 367,499 ​ $ 400,621 ​ $ 1,008 ​ $ (87) ​ $ 401,542 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classified as: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 35,818 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 22,477 Short-term investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 331,681 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 379,065 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 367,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 401,542 ​ The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par value and are all paying their coupons on schedule. The Company has therefore concluded there is currently no In accordance with the adoption of ASU 2016-13 (Topic 326), the Company has assessed the unrealized loss position for available-for-sale debt securities for which an allowance for credit losses has not been recorded. The fair value for municipal securities at an unrealized loss position as of March 31, 2020 was $23.2 million. The aggregate amount of unrealized losses of these securities not significant, and the impact of the securities in a continuous loss position to the condensed consolidated statements of operations and comprehensive loss were not material as of March 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ ​ Amortized ​ Fair ​ ​ (in thousands) Less than one year ​ $ 127,898 ​ $ 128,675 Greater than one year but less than five years ​ ​ 198,137 ​ ​ 203,006 Total ​ $ 326,035 ​ $ 331,681 ​

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2020
Balance Sheet Components
Balance Sheet Components	6. Balance Sheet Components Property and Equipment, net The Company’s property and equipment consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ Useful Life 2020 2019 ​ ​ (in thousands) Machinery and equipment 3 -5 $ 41,634 ​ $ 36,414 Furniture and fixtures 3 years ​ 1,376 ​ 1,376 Computer equipment 3 years ​ 1,796 ​ 1,828 Capitalized software held for internal use 3 years ​ 6,480 ​ ​ 5,917 Leasehold improvements Lesser of useful life or lease term ​ 11,746 ​ 11,556 Construction-in-process ​ ​ 7,037 ​ 7,716 ​ ​ ​ 70,069 ​ 64,807 Less: Accumulated depreciation and amortization ​ ​ (43,351) ​ (41,524) Total Property and Equipment, net ​ $ 26,718 ​ $ 23,283 ​ During the three months ended March 31, 2020, the increase in net property in equipment was due to purchases of new equipment for our laboratory located in Texas to expand testing capabilities, offset by depreciation expense of $1.8 million recorded in the three months ended March 31, 2020. The Company did not incur an impairment charge in the first quarter of 2020. Other Assets In August 2017, the Company entered into the 2017 Term Loan with OrbiMed (as described in Note 10, Debt As of March 31, 2020, other assets also included long-term advances to BGI Genomics of $10.0 million for future sequencing equipment and services. Furthermore, other assets include additional consideration estimated at $3.1 million in connection with the sale of Evercord, which represent the amount Natera is entitled to receive from the buyer as a percentage of collections on the transferred accounts receivable as part of the sale (i.e., receivables from third-party buyer). The consideration decreased from $4.7 million as of December 31, 2019 due to $0.5 million of net collections from the buyer and $1.2 million credit loss expense on the additional consideration. The credit loss expense was determined based on a recent collectability assessment of the accounts receivables transferred to the buyer on the disposal date. Accrued Compensation The Company’s accrued compensation consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2020 2019 ​ (in thousands) Accrued paid time off $ 1,912 ​ $ 1,850 Accrued commissions 6,997 ​ 5,767 Accrued bonuses 2,017 ​ 5,710 Other accrued compensation 5,027 ​ 2,761 Total accrued compensation $ 15,953 ​ $ 16,088 ​ Other Accrued Liabilities The Company’s other accrued liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2020 2019 ​ (in thousands) Reserves for refunds to insurance carriers $ 11,599 ​ $ 9,410 Accrued charges for outsourced testing ​ 6,051 ​ ​ 8,408 Testing and laboratory materials from suppliers ​ 7,821 ​ ​ 4,301 Marketing and corporate affairs ​ 2,136 ​ ​ 2,957 Legal, audit and consulting fees 5,055 ​ 2,873 Accrued shipping charges ​ 209 ​ ​ 305 Sales tax payable ​ 1,412 ​ ​ 1,691 Accrued specimen service fees ​ 1,066 ​ ​ 2,269 Clinical trials and studies ​ 1,157 ​ ​ 1,092 Operating lease liabilities, current portion ​ 5,947 ​ ​ 5,739 Fixed asset purchases ​ 643 ​ ​ 1,482 Other accrued expenses ​ 7,297 ​ ​ 8,516 Total other accrued liabilities $ 50,393 ​ $ 49,043 ​ Reserves for refunds to insurance carriers include overpayments from and amounts to be refunded to insurance carriers, and additional amounts that the Company estimates for potential refund requests during the period. When the Company releases these previously accrued amounts, they are recognized as product revenues in the statements of operations and comprehensive loss. ​ The following table summarizes the reserve balance and activities for refunds to insurance carriers: ​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ 2020 2019 ​ (in thousands) Beginning balance $ 9,410 ​ $ 10,012 Additional reserves 4,684 ​ 2,504 Reserves released (2,495) ​ (1,465) Ending balance $ 11,599 ​ $ 11,051 ​ ​ ​ ​ ​ ​ Released into revenue $ 1,027 ​ $ 478 ​ ​ ​ ​ ​ ​ ​

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases
Leases	7. Leases Operating Leases ​ ​ ​ ​ ​ March 31, ​ 2020 ​ ​ ( in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 5,947 Operating lease liabilities, long-term portion ​ 24,727 Total operating lease liabilities $ 30,674 ​ The present value of the future annual minimum lease payments under all non-cancelable operating leases as of March 31, 2020 are as follows: ​ ​ ​ ​ ​ Operating Leases ​ (in thousands) Year ending December 31: ​ ​ 2020 (remaining 9 months) $ 6,633 2021 ​ 9,067 2022 ​ 9,319 2023 ​ 7,797 2024 ​ 2,400 2025 and thereafter ​ 4,730 ​ ​ 39,946 Less: imputed interest ​ (9,272) Operating lease liabilities $ 30,674

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Legal Proceedings From time to time, the Company is involved in disputes, litigation, and other legal actions, including those with respect to intellectual property, employment, testing and other matters. Such actions may include allegations of negligence, products/professional liability or other similar legal claims, and could involve claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The Company is aggressively defending and/or prosecuting its current litigation matters, but cannot provide any assurance as to the ultimate outcome or that an adverse resolution would not have a material adverse effect on its financial condition and results of operations. There are many uncertainties associated with any litigation and these actions or other third party claims against the Company, or by the Company against third parties, may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could adversely affect gross margins in future periods. If this were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The Company assesses legal contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. When evaluating legal contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against it may be unsupported, exaggerated or unrelated to possible outcomes, and as such are not meaningful indicators of its potential liability. During the periods presented, the Company has not recorded any accrual for loss contingencies associated with such legal proceedings, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable. Illumina Litigation. On March 16, 2018, a lawsuit (the ’831 lawsuit) against the Company was filed in the United States District Court for the Northern District of California by Illumina, Inc., or Illumina, alleging that the Company’s Panorama test infringes certain claims of U.S. Patent No. 9,493,831 (the ’831 patent). Among other relief, the complaint seeks damages or other monetary relief including costs and pre- and post-judgment interest, treble damages, injunctive relief, attorneys’ fees and costs. On August 16, 2018, the Company filed a counterclaim against Illumina, alleging that certain of Illumina’s NIPT tests infringe on the Company’s U.S. Patent No. 8,682,592 (the ’592 patent). Among other relief, Natera seeks damages or other monetary relief including costs and pre- and post-judgment interest, treble damages, injunctive relief, attorneys’ fees and costs. On June 13, 2019, Illumina filed a petition for inter partes CareDX Litigation Matters. On March 26, 2019, CareDX, Inc., or CareDX, filed suit against the Company in the United States District Court for the District of Delaware (“CareDX’s Patent Case”). The suit alleges that the Company infringed two patents, 9,845,497 and 8,703,652. The complaint seeks unspecified damages and injunctive relief. On May 16, 2019, the Company filed a motion to dismiss CareDX’s Patent Case for failure to state a claim, and a hearing on the motion took place on November 21, 2019. On March 23, 2020, CareDX additionally alleged in an amended complaint that Natera infringed U.S. Patent No. 10,329,607. On April 8, 2020, Natera filed a renewed motion to dismiss all three of CareDX’s patent assertions for failure to state a claim. On May 4, 2020, Natera withdrew its earlier motion to dismiss with the intent to promptly file an early motion for summary judgment. ​ In an action that has been consolidated with CareDX’s Patent Case, Natera has also alleged that CareDX infringes Natera’s U.S. Patent Nos. 10,526,658 and 10,597,724, seeking unspecified damages and injunctive relief. ​ In addition, on April 10, 2019, CareDX filed suit against the Company in the United States District Court for the District of Delaware, alleging false advertising, trademark disparagement, unfair competition, and unfair or deceptive trade practices based on statements describing studies that concern the Company’s technology and CareDX’s technology (“CareDX’s Advertising Case”). The complaint seeks unspecified damages and injunctive relief. On May 30, 2019, the Company filed a motion to dismiss the entirety of CareDX’s Advertising Case for failure to state a claim. On February 7, 2020, CareDx filed an amended complaint withdrawing its trademark disparagement claim. On February 18, 2020, the Company filed a counterclaim against CareDX in the United States District Court for the District of Delaware, alleging false advertising, unfair competition and deceptive trade practices and seeking unspecified damages and injunctive relief. Other Litigation Matters. On or about January 27, 2020, the Company filed suit against ArcherDX, Inc., or ArcherDX, in the United States District Court for the District of Delaware, alleging that certain of ArcherDX’s DNA oncology products infringe on the Company’s U.S. Patent No. 10,538,814 (the ’814 patent). On April 15, 2020, Natera filed an amended complaint alleging that ArcherDx also infringed the Company’s U.S. Patent Nos. 10,557,172, 10,597,708, and 10,590,482. The amended complaint seeks monetary damages and injunctive relief. On or about August 13, 2019, a suit was filed against the Company in the Circuit Court of Cook County, Illinois by a patient alleging claims relating to a discordant test result and seeking monetary damages. On March 15, 2019, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of California, alleging that the plaintiff received an unauthorized text message to her cellular telephone in violation of the Telephone Consumer Protection Act. Among other relief, the complaint seeks statutory and other damages, injunctive relief, attorneys’ fees, and costs. On June 18, 2019, the Company filed a motion to dismiss, which was denied. An amended complaint was filed on April 23, 2020. On each of February 17, 2016, March 10, 2016, March 28, 2016 and April 4, 2016, purported class action lawsuits were filed in the Superior Court of the State of California for the County of San Mateo (the “San Mateo Superior Court”), against Natera, its directors, certain of its officers and 5% stockholders and their affiliates, and each of the underwriters of the Company’s July 1, 2015 initial public offering (the “IPO”). The complaints asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended. The complaints alleged, among other things, that the Registration Statement and Prospectus for the Company’s IPO contained materially false or misleading statements, and/or omitted material information that was required to be disclosed, about the Company’s business and prospects. Among other relief, the complaints sought class certification, unspecified compensatory damages, rescission, attorneys’ fees, and costs. On October 23, 2017, the San Mateo Superior Court granted the Company’s motion to dismiss the claims under Sections 12(a)(2) and 15 of the Securities Act of 1933, as amended, without leave to re-file, and granted the Company’s motion to dismiss the claims under Section 11 of the Act with leave to re-file. Plaintiffs refiled an amended complaint on November 22, 2017. On August 7, 2018 the judge granted a motion by the Company for judgment on the pleadings, without leave to amend, and ordered that judgment be entered in favor of the defendants. Plaintiffs appealed the judgment on or about March 29, 2019, and the appeal was heard on February 18, 2020. On February 28, 2020, the Court of Appeal for the State of California affirmed the judgment on the pleadings in favor of Natera . ​ Director and Officer Indemnifications As permitted under Delaware law, and as set forth in the Company’s Certificate of Incorporation and its Bylaws, the Company indemnifies its directors, executive officers, other officers, employees and other agents for certain events or occurrences that may arise while in such capacity. The maximum potential amount of future payments the Company could be required to make under this indemnification is unlimited; however, the Company has insurance policies that may limit its exposure and may enable it to recover a portion of any future amounts paid. Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, the Company believes any obligations under this indemnification would not be material, other than an initial $1.5 million for securities related claims and $0.3 million for commercial general liability claims. However, no assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case the Company may incur substantial liabilities as a result of these indemnification obligations. Third-Party Payer Reimbursement Audits From time to time, the Company receives recoupment requests from third-party payers for alleged overpayments. The Company disagrees with the contentions of pending requests and/or has recorded an estimated reserve for the alleged overpayments. Contractual Commitments The following table sets forth the material contractual commitments as of March 31, 2020 with a remaining term of at least one year: ​ ​ ​ ​ ​ ​ Party Commitments ​ Expiry Date ​ ​ (in thousands) ​ ​ Laboratory instruments supplier $ 6,683 ​ December-2021 Material supplier ​ 10,375 ​ March-2021 Application service providers ​ 9,778 ​ January-2021 - October-2022 Gene sequencing reagents and kits provider ​ 675 ​ April-2021 Other material suppliers ​ 9,712 ​ Various ​ $ 37,223 ​ ​ ​

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2020
Stock-Based Compensation
Stock-Based Compensation	9. Stock-Based Compensation 2015 Equity Incentive Plan In June 2015, the Board adopted, and the Company’s stockholders approved, the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), which, by its terms, took effect as of the Company’s IPO on July 2, 2015. The 2015 Plan replaced the Company’s 2007 Stock Plan (the “2007 Plan”). No further awards have been granted under the 2007 Plan after July 1, 2015. However, any remaining awards that were outstanding under the 2007 Plan will continue to be governed by the terms of that plan. The Company initially reserved 3,451,495 shares of its common stock for issuance under the 2015 Plan; in addition, the Company authorized the reservation of up to 9,890,310 shares of common stock to cover shares reserved but unissued under the 2007 Plan and shares subject to outstanding awards under the 2007 Plan that expire or lapse unexercised or shares issued under the 2007 Plan that are subsequently reacquired by the Company. Performance-based Awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Granted ​ Options Granted ​ RSUs Granted ​ Options Vested ​ RSUs Vested ​ Milestone ​ Valuation Method (in thousands) Q1 2019 ​ 200 ​ 300 ​ 38 ​ 69 ​ (1) ​ Monte-Carlo Simulation Q2 2019 ​ — ​ 188 ​ — ​ — ​ (2) ​ Fair Market Value Q3 2019 ​ — ​ 50 ​ — ​ — ​ (1) ​ Monte-Carlo Simulation Q1 2020 ​ 150 ​ 300 ​ — ​ — ​ (1) ​ Monte-Carlo Simulation Q1 2020 ​ — ​ 436 ​ — ​ — ​ (3) ​ Fair Market Value Q1 2020 ​ 129 ​ — ​ — ​ — ​ (3) ​ Black-Scholes-Merton ________________________________ (1) The awards will vest based on the achievement of certain values of the Company’s common stock at multiple thresholds within certain periods and are contingent upon the completion of requisite service through the date of such vesting. ​ (2) The vesting of the awards will be triggered after the end of the achievement milestone, as measured by the Company. ​ (3) The awards will vest based on achievement of certain revenue target and are contingent upon the completion of requisite service through the date of such vesting. ​ The Company has recognized $1.4 million and $0.2 million in stock-based compensation for performance-based awards for the three months ended March 31, 2020 and March 31, 2019, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ 2020 Risk-free interest rate ​ 0.61 % — 1.64 % Expected dividend yield ​ ​ ​ ​ 0.00 % Expected volatility ​ 55 % — 65 % Expected term (years) ​ 5.25 ​ — 7.25 ​ ​ Employee Stock Purchase Plan In the second quarter of 2015, the Company’s stockholders approved the 2015 Natera, Inc. Employee Stock Purchase Plan (the “ESPP”), which became effective upon the Company’s IPO on July 2, 2015. Under the ESPP, employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee’s payroll deductions under the ESPP are limited to 15% of the employee’s compensation and employees may not purchase more than 5,000 shares of stock during any offering period. A participant shall not be granted an option under the ESPP if such option would permit the participant’s rights to purchase stock to accrue at a rate that exceeds $25,000 fair market value of stock for each calendar year in which such option is outstanding at any time. The Company has made 893,548 shares available for issuance under the Plan, a number that is automatically increased by the least of (i) 1% of the total number of shares of common stock actually issued and outstanding on the last business day of the prior fiscal year, (ii) 880,000 shares of common stock (subject to certain adjustments pursuant to Subsection (c) below), or (iii) a number of shares of common stock determined by the Board. The first offering period of 2020 started on November 1, 2019 and will end on April 30, 2020. No shares were purchased in the three months ending March 31, 2020. Stock Options The following table summarizes option activity for the three months ended March 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Options ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ Shares ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Available for ​ Number of ​ Exercise ​ Contractual ​ Intrinsic (in thousands, except for contractual life and exercise price) ​ Grant ​ Shares ​ Price ​ Life ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ (In years) ​ ​ Balance at December 31, 2019 6,416 8,497 ​ $ 10.39 ​ 6.88 ​ $ 197,955 Additional shares authorized 3,120 ​ — ​ ​ ​ ​ ​ ​ ​ ​ Options granted (409) 409 ​ $ 25.51 ​ ​ ​ ​ ​ Options exercised — (356) ​ $ 10.74 ​ ​ ​ ​ ​ Options forfeited/cancelled 45 (45) ​ $ 17.76 ​ ​ ​ ​ ​ RSUs granted ​ (4,140) ​ — ​ ​ ​ ​ ​ ​ ​ ​ RSUs forfeited/cancelled ​ 88 ​ — ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2020 5,120 8,505 ​ $ 11.07 ​ 6.78 ​ $ 159,957 Exercisable at March 31, 2020 ​ ​ 5,078 ​ $ 7.85 ​ 5.54 ​ $ 111,759 Vested and expected to vest at March 31, 2020 ​ ​ 8,316 ​ $ 10.96 ​ 6.74 ​ $ 157,297 ​ Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date (in thousands, except for grant date fair value) ​ Shares ​ Fair Value ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 ​ 2,404 ​ $ 19.86 Granted ​ 2,071 ​ $ 26.67 Vested ​ (291) ​ $ 16.88 Cancelled/forfeited ​ (44) ​ $ 21.35 Balance at March 31, 2020 ​ 4,140 ​ $ 22.48 ​ Stock-Based Compensation Expense Employee stock-based compensation expense was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods, if actual forfeitures differ from those estimates. Non-employee stock-based compensation expense was not adjusted for estimated forfeitures up until the occurrence of the actual forfeiture of the associated awards. The following tables present the effect of employee and non-employee stock-based compensation expense on selected statements of operations line items for the three months ended March 31, 2020 and 2019. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ ​ 2020 ​ 2019 ​ Employee Non-Employee Total Employee Non-Employee Total ​ (in thousands) ​ Cost of revenues ​ $ 314 ​ $ — ​ $ 314 ​ $ 168 ​ $ — ​ $ 168 ​ Research and development ​ 1,682 ​ 160 ​ 1,842 ​ 894 ​ — ​ 894 ​ Selling, general and administrative ​ 5,252 ​ 9 ​ 5,261 ​ 2,646 ​ 343 ​ 2,989 ​ Total ​ $ 7,248 ​ $ 169 ​ $ 7,417 ​ $ 3,708 ​ $ 343 ​ $ 4,051 ​ As of March 31, 2020, approximately $96.7 million of unrecognized compensation expense, adjusted for estimated forfeitures, related to unvested option awards and RSUs will be recognized over a weighted-average period of approximately 3.1 years. Valuation of Stock Option Grants to Employees and Non-employees Upon the adoption of ASU 2018-07 on January 1, 2019, the fair value of stock options granted to both employees and non-employees is estimated on the grant date using the Black-Scholes option-pricing model except for the performance-based options with a market condition. Prior to January 1, 2019, the Company only estimated the fair value of the stock options granted to its employees on the grant date, while the fair value of its unvested non-employee stock options was remeasured at the end of each reporting period up until their vesting date. The fair value of the stock options is amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Company utilizes Black-Scholes option pricing model when estimating the fair value of stock options. For the three months ended March 31, 2020, the following valuation assumptions were applied on both the employee and non-employee options. In the same period of the prior year, the valuation assumptions as follows were only used for stock options granted to employees. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ 2020 2019 Expected term (years) 5.27 ​ — 10.0 ​ 5.33 ​ — 5.53 ​ Expected volatility 49.94 % — 58.53 % 42.53 % — 42.75 % Expected dividend rate ​ ​ ​ 0.00 % ​ ​ ​ 0.00 % Risk-free interest rate 0.44 % — 1.70 % 2.26 % — 2.60 % ​ Expected Term Expected Volatility Expected Dividend Rate Risk-Free Interest Rate

Debt

Debt	3 Months Ended
	Mar. 31, 2020
Debt
Debt	10 . Debt Credit Line Agreement In September 2015, the Company entered into a credit line with UBS (the “Credit Line”) providing for a $50.0 million revolving line of credit that can be drawn down in increments at any time. The Credit Line was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%. The Credit Line is secured by a first priority lien and security interest in the Company’s money market and marketable securities held in its managed investment account with UBS. UBS has the right to demand full or partial payment of the Credit Line Obligations and terminate the Credit Line, in its discretion and without cause, at any time. For the three months ended March 31, 2020 and 2019, the Company recorded interest expense on the Credit Line of $0.3 million and $0.4 million, respectively. Interest payments on the Credit Line were made within the same periods. As of March 31, 2020, remaining accrued interest was $1.1 million, and the total principal amount outstanding with accrued interest was $49.0 million. 2017 Term Loan In August 2017, the Company entered into the 2017 Term Loan with OrbiMed, which has a maximum borrowing capacity of $100.0 million. On the closing date of August 8, 2017, the Company borrowed $75.0 million, with the remaining $25.0 million available to borrow at the Company’s option at any time through December 31, 2019, subject to standard conditions. The amounts borrowed under 2017 Term Loan will primarily be used for general corporate purposes and to fund and support the Company’s business and operations. Interest is accrued on the outstanding balance of the loan at a rate equal to the sum of (i) 8.75% plus (ii) the higher of 1.00% or LIBOR. The 2017 Term Loan has an eighty-four month term and will mature in August 2024. The Company is required to make interest payments on a quarterly basis, with repayment of the full outstanding balance on the maturity date. The Company’s obligations under the 2017 Term Loan are secured by substantially all of its assets, including its intellectual property, subject to certain customary exceptions. On December 31, 2018, the Company amended certain terms in the 2017 Term Loan with OrbiMed. The amendment increased the existing unused borrowing capacity from $25.0 million to $50.0 million and extended the expiration date for the option to draw the additional to March 31, 2019. If the Company has drawn from the unused borrowing capacity of $50.0 million, the interest rate described above would instead decrease to the sum of (i) 8.25% plus (ii) the higher of 1.00% or LIBOR. If the amount drawn is less than $50.0 million, the interest rate would remain at the sum of (i) 8.75% plus (ii) the higher of 1.00% or LIBOR. In April 2019, the Company entered into a second amendment of the 2017 Term Loan with OrbiMed to further extend the expiration date until December 31, 2019 to draw the unused borrowing capacity of $50.0 million. In the second amendment, the interest rate is equal to the sum of (i) 8.25% plus (ii) the higher of 1.00% or LIBOR, provided the Company draws the minimum capacity of $25.0 million. If the amount drawn is less than $25.0 million, the interest rate would remain at the sum of (i) 8.75% plus (ii) the higher of 1.00% or LIBOR. As a fee in consideration of extending the commitment to provide this option to draw until December 31, 2019, the Company issued an additional 25,000 shares of our common stock to OrbiMed on April 29, 2019. As of December 31, 2019, the Company did not exercise such option, and the right to draw the unused borrowing capacity has expired. The 2017 Term Loan contains customary affirmative and negative covenants including financial information maintenance covenants, indebtedness limitation covenants, minimum net revenues covenants, and investment covenants. It also includes standard events of default such as payment defaults and nonperformance of obligations and covenants described above. Upon an event of default, an additional interest of 3.00% may be applied to the outstanding debt balance until such default is cured, and OrbiMed may declare all outstanding obligations immediately due and payable. As of December 31, 2019, the Company was in compliance with all of its covenants under the 2017 Term Loan. On August 14, 2017, the Company paid OrbiMed a fee in consideration of providing the 2017 Term Loan by issuing 300,000 shares of its common stock. The fair value of the fee was $2.4 million, which was determined based on the Company’s stock price of $8.16 on August 8, 2017. Additionally, the Company paid legal fees of $0.3 million in connection with this term loan. Total debt issuance costs incurred amounted to $2.7 million, which is accounted for as a debt discount to be amortized on a straight-line basis over the term of the loan. The Company has classified $2.1 million of the debt discount as a direct reduction from the outstanding debt balance of $75.0 million, while the remainder is classified as noncurrent assets (as described in Note 6, Balance Sheet Components ). The following table indicates how the Company reported its long-term debt at the end of the period: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2020 ​ 2019 ​ ​ ​ (Amounts in thousands) ​ ​ ​ Debt principal balance ​ $ 75,000 ​ $ 75,000 Less: unamortized debt discount ​ ​ (2,119) ​ ​ (1,344) Net carrying amount at end of period ​ $ 72,881 ​ $ 73,656 ​ The unamortized debt discount increased from $1.3 million as of December 31, 2019 to $2.1 million due to a reclass of the unamortized portion of debt issuance cost previously classified in noncurrent assets of $0.9 million to long-term debt financing. The reclass was recorded as a result of the expiration for option to draw the unused borrow capacity as of March 31, 2020. The term loan was subsequently paid off in April 2020 (see Note 13, Subsequent Events ). ​ ​

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Taxes
Income Taxes	11. Income Taxes In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020. The CARES Act includes modifications for net operating loss carryovers and carrybacks, limitations of business interest expense, immediate refund of alternative minimum tax (AMT) credit carryovers as well as a technical correction to the Tax Cuts and Jobs Act of 2017, for qualified improvement property. As of March 31, 2020, the Company expects that these provisions will not have a material impact as the Company has no net operating losses or AMT credits that would fall under these provisions and does not expect interest expense to be deductible due to current and historical losses. During the three months ended March 31, 2020 and 2019, the Company recorded total income tax expense of approximately $23,000 and $74,000, respectively. The income tax expense is primarily attributable to foreign income tax expenses resulting from testing to clinics and licenses cloud-based software and intellectual property, that are based in a foreign country. There was no state income tax expense recorded for the three months ended March 31, 2020 and March 31, 2019. Due to the Company’s history of cumulative operating losses, the Company concluded that, after considering all the available objective evidence, it is not more likely than not that all of the Company’s net deferred tax assets will be realized. Accordingly, all of the Company’s deferred tax assets, which includes net operating loss or NOL carryforwards and tax credits related primarily to research and development, continue to be subjected to a valuation allowance as of March 31, 2020. The Company will continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets. The Company had $9.0 million and $8.6 million in unrecognized tax benefits at March 31, 2020 and December 31, 2019, respectively. The reversal of the uncertain tax benefits would not affect the effective tax rate to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense. As of March 31, 2020, there were no

Net Loss per Share

Net Loss per Share	3 Months Ended
	Mar. 31, 2020
Net Loss per Share
Net Loss per Share	12. Net Loss per Share Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, excluding shares subject to repurchase and without consideration of potentially dilutive securities. Diluted net loss per share is computed by giving effect to all potentially dilutive common shares outstanding for the period. For purposes of this computation, outstanding common stock options, and restricted stock units are considered to be common share equivalents. Common share equivalents are excluded from the computation in periods in which they have an anti-dilutive effect, unless the consideration of any one of them gives a dilutive effect. The following table provides the basic and diluted net loss per share computations for the three months ended March 31, 2020 and 2019. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, (in thousands, except per share data) 2020 2019 Numerator: ​ ​ ​ ​ ​ ​ Net loss, basic and diluted $ (35,372) $ (34,091) ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ Weighted-average number of shares used in computing net loss per share, basic and diluted ​ ​ 78,287 ​ ​ 62,831 ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ (0.45) ​ $ (0.54) ​ The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would be anti-dilutive, as of March 31, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ 2020 2019 ​ (in thousands) Options to purchase common stock ​ 8,505 9,533 Restricted stock units ​ 4,140 ​ 2,086 Employee stock purchase plan ​ 77 ​ 99 ​ ​ 12,722 11,718 ​

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2020
Subsequent Events
Subsequent Events	​ 13. Subsequent Events In April 2020, the Company executed a purchase agreement for the sale of $287.5 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 to the initial purchasers in a private placement and for initial resale to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. A maximum of 9,634,700 shares of the Company’s common stock may be issued upon conversion of the Convertible Notes, subject to adjustment. The net proceeds from the offering of the Convertible Notes, given the initial purchasers’ full exercise of their option to purchase additional Convertible Notes, were approximately $278.9 million net of the underwriting discount. In April 2020, the Company used a portion of the net proceeds from the offering of the Convertible Notes to repay its obligations under its 2017 Term Loan with OrbiMed. The payoff amount was $79.2 million, which includes the principal amount of $75.0 million and $4.2 million of early payment penalties and accrued interest through the payment date. ​

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. The unaudited interim condensed consolidated financial information includes only adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the full year or the results for any future periods. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date, these financial statements should be read in conjunction with the audited financial statements, and related notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2020.
Liquidity Matters	Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. The Company had a net loss of $35.4 million for the three months ended March 31, 2020 and recorded a cumulative-effect adjustment of $0.4 million upon the adoption of ASU 2016-13 on January 1, 2020, which increased the accumulated deficit to $734.9 million at March 31, 2020 from $699.2 million at December 31, 2019. As of March 31, 2020, the Company had $74.1 million in cash and cash equivalents, $331.7 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 10, Debt Debt The Company continues to develop and commercialize future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders will experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to the Company. If the Company is unable to obtain additional financing, it may be required to delay the development and commercialization of its products and significantly scale back its business and operations. In April 2019, the Company completed an underwritten equity offering to and sold 6,052,631 shares of its common stock at a price to the public of $19 per share. Before offering expenses of $0.6 million, the Company received proceeds of $108.1 million net of the underwriting discount. In October 2019, the Company completed another underwritten equity offering and sold 6,571,428 shares of its common stock at a price to the public of $35 per share. Before offering expenses of $0.4 million, the Company received proceeds of $216.2 million net of the underwriting discount. In April 2020, the Company executed a purchase agreement for the sale of $287.5 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 (the “Convertible Notes”) to the initial purchasers in a private placement and for initial resale to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. A maximum of 9,634,700 shares of the Company’s common stock may be issued upon conversion of the Convertible Notes, subject to adjustment. The net proceeds from the offering of the Convertible Notes, given the initial purchasers’ full exercise of their option to purchase additional Convertible Notes, were approximately $278.9 million net of underwriting discount. In April 2020, the Company used a portion of the net proceeds from the offering of the Convertible Notes to repay its obligations under its 2017 Term Loan with OrbiMed. The payoff amount was $79.2 million, which includes the principal amount of $75.0 million and $4.2 million of early payment penalties and accrued interest through the payment date. Based on the Company’s current business plan, the Company believes that its existing cash and marketable securities will be sufficient to meet its anticipated cash requirements for at least 12 months after May 7, 2020.
Principles of Consolidation	Principles of Consolidation ​ The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. The Company established a subsidiary that operates in the state of Texas to support the Company’s laboratory and operational functions. All intercompany balances and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include the allowance for doubtful accounts, the operating right-of-use assets and the associated lease liabilities, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, stock-based compensation, the fair value of common stock, income tax uncertainties, and the expected consideration to be received from contracts with customers. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors, including contractual terms and statutory limits; however, actual results could differ from these estimates and could have an adverse effect on the Company's financial statements.
Fair Value	Fair Value The Company discloses the fair value of financial instruments for financial assets and liabilities for which the value is practicable to estimate. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions.
Restricted Cash	Restricted Cash The Company separately discloses restricted cash from cash and cash equivalents. As of March 31, 2020, short-term restricted cash totaled $0.1 million held as collateral for the settlement of foreign
Credit Losses	Credit Losses ​ Trade accounts receivable and other receivables. ​ Available-for-sale debt securities.
Investments	Investments Investments consist primarily of debt securities such as U.S. Treasuries, U.S. agency and municipal bonds. Management determines the appropriate classification of securities at the time of purchase and re-evaluates such determination at each balance sheet date. The Company generally classifies its entire investment portfolio as available-for-sale. The Company views its available-for-sale portfolio as available for use in current operations. Accordingly, the Company classifies all investments as short-term, even though the stated maturity may be more than one year from the current balance sheet date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity.
Risk and Uncertainties	Risk and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic information is rapidly evolving. Our test volumes began to decrease in the second half of March 2020 as a result of the COVID-19 pandemic spreading to the United States and resulting limitations and reordering of priorities across the U.S. healthcare system. The Company expects test volumes to continue to be adversely affected by COVID-19 and cannot predict when volumes will return to normal. Financial instruments that potentially subject the Company to credit risk consist of cash, accounts receivable and investments. The Company limits its exposure to credit loss by placing its cash in financial institutions with high credit ratings. The Company's cash may consist of deposits held with banks that may at times exceed federally insured limits. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. The Company performs evaluations of financial conditions for insurance carriers, patients, clinics and laboratory partners and generally does not require collateral to support credit sales. For the three months ended March 31, 2020, and 2019, there were no customers exceeding 10% of total revenues on an individual basis. As of March 31, 2020 and December 31, 2019, there were no customers with an outstanding balance exceeding 10% of net accounts receivable.
Revenue Recognition	Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ​ ● Identification of a contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Revenue recognition when, or as, the performance obligations are satisfied ​ Revenue Recognition
Cost of Product Revenues	Cost of Product Revenues The components of cost of product revenues are material and service costs, impairment charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical records, order and delivery systems, shipping charges to transport samples, third-party test fees and allocated overhead including rent, information technology costs, equipment depreciation and utilities. Costs associated with the performance of diagnostic services are recorded as tests are accessioned.
Cost of Licensing and Other Revenues	Cost of Licensing and Other Revenues
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation is related to stock options and restricted stock units (“RSUs”) granted to the Company’s employees and is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards on a straight-line basis. No compensation cost is recognized when the requisite service has not been met and the awards are therefore forfeited. ​ For stock options with market conditions, the Company derives the requisite service period using the Monte Carlo simulation model. For stock options and RSUs that vest upon meeting performance conditions or market conditions in combination with performance conditions, the Company derives the requisite service period from the grant date to the date it is probable that the vesting conditions will be met. ​ The fair value of non-employee awards is determined based on a one-time measurement at the grant date, and it is no longer subject to periodic remeasurement. The Company continues to recognize stock-based compensation expense as services are rendered by the non-employees over the vesting period, which is accounted for on a straight-line basis. The Company uses the Black-Scholes option-pricing model and the Monte Carlo simulation model to estimate the fair value of stock options issued to employees and non-employees. The model requires the input of the Company's expected stock price volatility, the expected term of the awards, and a risk-free interest rate. Determining these assumptions requires significant judgment. See further discussion on the valuation assumptions used under Note 9, Stock-based Compensation
Capitalized Software Held for Internal Use	Capitalized Software Held for Internal Use The Company capitalizes salaries and related costs of employees and consultants who devote time to the development of internal-use software development projects. Capitalization begins during the application development stage, once the preliminary project stage has been completed. If a project constitutes an enhancement to previously developed software, the Company assesses whether the enhancement is significant and creates additional functionality to the software, thus qualifying the work incurred for capitalization. Once the project is available for general release, capitalization ceases and the Company estimates the useful life of the asset and begins amortization. The Company periodically assesses whether triggering events are present to review internal-use software for impairment. Changes in estimates related to internal-use software would increase or decrease operating expenses or amortization recorded during the reporting period. The Company amortizes its internal-use software over the estimated useful lives of three years. The net book value of capitalized software held for internal use was $1.1 million and $1.2 million as of March 31, 2020 and December 31, 2019, respectively. Amortized expense for amounts previously capitalized for the three months ended March 31, 2020 and 2019 was $0.3 million for both periods.
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Comprehensive loss and its components encompass all changes in equity other than those with stockholders, and include net loss, unrealized gains and losses on available-for-sale marketable securities. ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ March 31, ​ 2020 ​ 2019 ​ (in thousands) Beginning balance $ 919 ​ $ (552) Net unrealized gain on available-for-sale securities, net of tax ​ 4,747 ​ ​ 286 Reclassifications of losses realized from sale of available-for-sale securities ​ — ​ ​ — Increase in other comprehensive loss ​ 4,747 ​ ​ 286 Ending balance $ 5,666 ​ $ (266)
Net Loss per Share	Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for potential dilutive shares. For purposes of the diluted net loss per share calculation, outstanding common stock options, RSUs, and ESPP are considered potential dilutive shares but are excluded from this calculation as the result becomes anti-dilutive, unless the consideration of any one of them gives a dilutive effect. ​
Property and Equipment	Property and Equipment Property and equipment, including purchased and internally developed software, are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are generally three five years
Impairment of Long-lived Assets	Impairment of Long-lived Assets The Company periodically evaluates the carrying value of its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amount of the long-lived assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows.
Recent Accounting Pronouncements	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed below, the Company believes that the impact of accounting standards updates recently issued that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Goodwill - Internal-Use Software Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 ‑ 40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments amortized costs. The Company adopted ASU 2016-13, as amended, effective January 1, 2020 using the modified retrospective method and recorded a cumulative-effect adjustment of $0.4 million in retained earnings as of January 1, 2020. Collaborative Arrangements Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The guidance will be effective for the Company in the first quarter of our fiscal year 2021. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848)

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Schedule of Accumulated Other Comprehensive Income (Loss)	​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ March 31, ​ 2020 ​ 2019 ​ (in thousands) Beginning balance $ 919 ​ $ (552) Net unrealized gain on available-for-sale securities, net of tax ​ 4,747 ​ ​ 286 Reclassifications of losses realized from sale of available-for-sale securities ​ — ​ ​ — Increase in other comprehensive loss ​ 4,747 ​ ​ 286 Ending balance $ 5,666 ​ $ (266)

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2020
Revenue Recognition
Schedule of disaggregation of revenues	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2020 ​ 2019 (Amounts in thousands) ​ ​ ​ ​ ​ Product revenues ​ ​ ​ ​ ​ ​ Sale of genetic tests ​ $ 87,046 ​ $ 63,364 Licensing and other ​ ​ ​ ​ ​ Constellation and paternity ​ ​ 1,367 ​ ​ 1,332 License and development services ​ ​ 4,802 ​ ​ 148 Other ​ ​ 797 ​ ​ 1,980 Licensing and other revenues ​ ​ 6,966 ​ ​ 3,460 Total revenues ​ $ 94,012 ​ $ 66,824
Schedule of disaggregation of revenues by payer types	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2020 ​ 2019 (Amounts in thousands) ​ ​ ​ ​ ​ Insurance carriers ​ $ 70,672 ​ $ 50,201 Laboratory and other partners ​ ​ 15,683 ​ ​ 10,023 Patients ​ ​ 7,657 ​ ​ 6,600 Total revenues ​ $ 94,012 ​ $ 66,824
Schedule of total revenue by geographic area	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ 2020 2019 (Amounts in thousands) ​ ​ ​ ​ ​ United States $ 86,731 $ 60,283 Americas, excluding U.S. ​ 782 ​ 818 Europe, Middle East, India, Africa ​ 3,476 ​ 4,004 Asia Pacific and Other ​ 3,023 ​ 1,719 Total revenues $ 94,012 $ 66,824
Schedule of beginning and ending balances of accounts receivable and deferred revenues	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ Balance at ​ ​ March 31, ​ December 31, (Amounts in thousands) ​ 2020 ​ 2019 Assets: ​ ​ ​ ​ ​ ​ Accounts receivable ​ $ 61,577 ​ $ 53,351 Liabilities: ​ ​ ​ ​ ​ ​ Deferred revenue, current portion ​ $ 51,840 ​ $ 56,016 Deferred revenue, long-term portion ​ ​ 25,152 ​ ​ 23,808 Total deferred revenues ​ $ 76,992 ​ $ 79,824
Schedule of changes in the balance of deferred revenues	​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ Revenues ​ ​ (in thousands) Balance at December 31, 2019 ​ $ 79,824 Increase in deferred revenues ​ ​ 710 Revenue recognized during the period that was included in ​ ​ (3,455) Revenue recognized from performance obligations satisfied ​ ​ (87) Balance at March 31, 2020 ​ $ 76,992

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2020
Fair Value Measurements
Summary of financial assets and liabilities measured on recurring basis	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ December 31, 2019 ​ Level I Level II Level III Total Level I Level II Level III Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market deposits ​ $ 35,818 ​ $ — ​ $ — ​ $ 35,818 ​ $ 22,477 ​ $ — ​ $ — ​ $ 22,477 U.S. Treasury securities ​ ​ 249,314 ​ ​ — ​ ​ — ​ ​ 249,314 ​ ​ 293,157 ​ ​ — ​ ​ — ​ ​ 293,157 Municipal securities ​ ​ — ​ ​ 82,367 ​ ​ — ​ ​ 82,367 ​ ​ — ​ ​ 85,908 ​ ​ — ​ ​ 85,908 Total financial assets ​ $ 285,132 ​ $ 82,367 ​ $ — ​ $ 367,499 ​ $ 315,634 ​ $ 85,908 ​ $ — ​ $ 401,542

Financial Instruments (Tables)

Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2020
Financial Instruments
Schedule of available-for-sale securities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ December 31, 2019 ​ Amortized Gross Gross Estimated Fair Value Amortized Gross Gross Estimated Fair Value ​ ​ (in thousands) Money market deposits ​ $ 35,818 ​ $ — ​ $ — ​ $ 35,818 ​ $ 22,477 ​ $ — ​ $ — ​ $ 22,477 U.S. Treasury securities ​ 243,821 ​ ​ 5,493 ​ ​ — ​ 249,314 ​ 292,506 ​ 731 ​ (80) ​ 293,157 Municipal securities ​ ​ 82,214 ​ ​ 195 ​ ​ (42) ​ ​ 82,367 ​ ​ 85,638 ​ ​ 277 ​ ​ (7) ​ ​ 85,908 Total ​ $ 361,853 ​ $ 5,688 ​ $ (42) ​ $ 367,499 ​ $ 400,621 ​ $ 1,008 ​ $ (87) ​ $ 401,542 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classified as: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 35,818 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 22,477 Short-term investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 331,681 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 379,065 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 367,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 401,542
Summarized portfolio of available-for-sale securities by contractual maturity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ ​ Amortized ​ Fair ​ ​ (in thousands) Less than one year ​ $ 127,898 ​ $ 128,675 Greater than one year but less than five years ​ ​ 198,137 ​ ​ 203,006 Total ​ $ 326,035 ​ $ 331,681

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2020
Balance Sheet Components
Schedule of property and equipment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ Useful Life 2020 2019 ​ ​ (in thousands) Machinery and equipment 3 -5 $ 41,634 ​ $ 36,414 Furniture and fixtures 3 years ​ 1,376 ​ 1,376 Computer equipment 3 years ​ 1,796 ​ 1,828 Capitalized software held for internal use 3 years ​ 6,480 ​ ​ 5,917 Leasehold improvements Lesser of useful life or lease term ​ 11,746 ​ 11,556 Construction-in-process ​ ​ 7,037 ​ 7,716 ​ ​ ​ 70,069 ​ 64,807 Less: Accumulated depreciation and amortization ​ ​ (43,351) ​ (41,524) Total Property and Equipment, net ​ $ 26,718 ​ $ 23,283
Schedule of accrued compensation	​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2020 2019 ​ (in thousands) Accrued paid time off $ 1,912 ​ $ 1,850 Accrued commissions 6,997 ​ 5,767 Accrued bonuses 2,017 ​ 5,710 Other accrued compensation 5,027 ​ 2,761 Total accrued compensation $ 15,953 ​ $ 16,088
Schedule of other accrued liabilities	​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2020 2019 ​ (in thousands) Reserves for refunds to insurance carriers $ 11,599 ​ $ 9,410 Accrued charges for outsourced testing ​ 6,051 ​ ​ 8,408 Testing and laboratory materials from suppliers ​ 7,821 ​ ​ 4,301 Marketing and corporate affairs ​ 2,136 ​ ​ 2,957 Legal, audit and consulting fees 5,055 ​ 2,873 Accrued shipping charges ​ 209 ​ ​ 305 Sales tax payable ​ 1,412 ​ ​ 1,691 Accrued specimen service fees ​ 1,066 ​ ​ 2,269 Clinical trials and studies ​ 1,157 ​ ​ 1,092 Operating lease liabilities, current portion ​ 5,947 ​ ​ 5,739 Fixed asset purchases ​ 643 ​ ​ 1,482 Other accrued expenses ​ 7,297 ​ ​ 8,516 Total other accrued liabilities $ 50,393 ​ $ 49,043
Summary of reserve balance and activities for refunds to insurance carriers	​ ​ ​ ​ ​ ​ ​ ​ March 31, March 31, ​ 2020 2019 ​ (in thousands) Beginning balance $ 9,410 ​ $ 10,012 Additional reserves 4,684 ​ 2,504 Reserves released (2,495) ​ (1,465) Ending balance $ 11,599 ​ $ 11,051 ​ ​ ​ ​ ​ ​ Released into revenue $ 1,027 ​ $ 478 ​ ​ ​ ​ ​ ​

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases
Schedule of lease liabilities	​ ​ ​ ​ ​ March 31, ​ 2020 ​ ​ ( in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 5,947 Operating lease liabilities, long-term portion ​ 24,727 Total operating lease liabilities $ 30,674
Schedule of annual minimum lease payments	​ ​ ​ ​ ​ Operating Leases ​ (in thousands) Year ending December 31: ​ ​ 2020 (remaining 9 months) $ 6,633 2021 ​ 9,067 2022 ​ 9,319 2023 ​ 7,797 2024 ​ 2,400 2025 and thereafter ​ 4,730 ​ ​ 39,946 Less: imputed interest ​ (9,272) Operating lease liabilities $ 30,674

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies
Schedule of material contractual commitments	​ ​ ​ ​ ​ ​ Party Commitments ​ Expiry Date ​ ​ (in thousands) ​ ​ Laboratory instruments supplier $ 6,683 ​ December-2021 Material supplier ​ 10,375 ​ March-2021 Application service providers ​ 9,778 ​ January-2021 - October-2022 Gene sequencing reagents and kits provider ​ 675 ​ April-2021 Other material suppliers ​ 9,712 ​ Various ​ $ 37,223 ​ ​

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Schedule of performance-based awards	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Granted ​ Options Granted ​ RSUs Granted ​ Options Vested ​ RSUs Vested ​ Milestone ​ Valuation Method (in thousands) Q1 2019 ​ 200 ​ 300 ​ 38 ​ 69 ​ (1) ​ Monte-Carlo Simulation Q2 2019 ​ — ​ 188 ​ — ​ — ​ (2) ​ Fair Market Value Q3 2019 ​ — ​ 50 ​ — ​ — ​ (1) ​ Monte-Carlo Simulation Q1 2020 ​ 150 ​ 300 ​ — ​ — ​ (1) ​ Monte-Carlo Simulation Q1 2020 ​ — ​ 436 ​ — ​ — ​ (3) ​ Fair Market Value Q1 2020 ​ 129 ​ — ​ — ​ — ​ (3) ​ Black-Scholes-Merton ________________________________ (1) The awards will vest based on the achievement of certain values of the Company’s common stock at multiple thresholds within certain periods and are contingent upon the completion of requisite service through the date of such vesting. ​ (2) The vesting of the awards will be triggered after the end of the achievement milestone, as measured by the Company. ​ (3) The awards will vest based on achievement of certain revenue target and are contingent upon the completion of requisite service through the date of such vesting.
Summary of stock option activity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Options ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ Shares ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Available for ​ Number of ​ Exercise ​ Contractual ​ Intrinsic (in thousands, except for contractual life and exercise price) ​ Grant ​ Shares ​ Price ​ Life ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ (In years) ​ ​ Balance at December 31, 2019 6,416 8,497 ​ $ 10.39 ​ 6.88 ​ $ 197,955 Additional shares authorized 3,120 ​ — ​ ​ ​ ​ ​ ​ ​ ​ Options granted (409) 409 ​ $ 25.51 ​ ​ ​ ​ ​ Options exercised — (356) ​ $ 10.74 ​ ​ ​ ​ ​ Options forfeited/cancelled 45 (45) ​ $ 17.76 ​ ​ ​ ​ ​ RSUs granted ​ (4,140) ​ — ​ ​ ​ ​ ​ ​ ​ ​ RSUs forfeited/cancelled ​ 88 ​ — ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2020 5,120 8,505 ​ $ 11.07 ​ 6.78 ​ $ 159,957 Exercisable at March 31, 2020 ​ ​ 5,078 ​ $ 7.85 ​ 5.54 ​ $ 111,759 Vested and expected to vest at March 31, 2020 ​ ​ 8,316 ​ $ 10.96 ​ 6.74 ​ $ 157,297
Restricted stock units	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date (in thousands, except for grant date fair value) ​ Shares ​ Fair Value ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 ​ 2,404 ​ $ 19.86 Granted ​ 2,071 ​ $ 26.67 Vested ​ (291) ​ $ 16.88 Cancelled/forfeited ​ (44) ​ $ 21.35 Balance at March 31, 2020 ​ 4,140 ​ $ 22.48
Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Schedule of assumptions used in valuation of fair value	​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ 2020 Risk-free interest rate ​ 0.61 % — 1.64 % Expected dividend yield ​ ​ ​ ​ 0.00 % Expected volatility ​ 55 % — 65 % Expected term (years) ​ 5.25 ​ — 7.25 ​
Employee stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Schedule of assumptions used in valuation of fair value	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ 2020 2019 Expected term (years) 5.27 ​ — 10.0 ​ 5.33 ​ — 5.53 ​ Expected volatility 49.94 % — 58.53 % 42.53 % — 42.75 % Expected dividend rate ​ ​ ​ 0.00 % ​ ​ ​ 0.00 % Risk-free interest rate 0.44 % — 1.70 % 2.26 % — 2.60 %

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2020
Debt
Schedule of maturities of long-term debt	​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2020 ​ 2019 ​ ​ ​ (Amounts in thousands) ​ ​ ​ Debt principal balance ​ $ 75,000 ​ $ 75,000 Less: unamortized debt discount ​ ​ (2,119) ​ ​ (1,344) Net carrying amount at end of period ​ $ 72,881 ​ $ 73,656

Net Loss per Share (Tables)

Net Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Net Loss per Share
Basic and diluted net loss per common share	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, (in thousands, except per share data) 2020 2019 Numerator: ​ ​ ​ ​ ​ ​ Net loss, basic and diluted $ (35,372) $ (34,091) ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ Weighted-average number of shares used in computing net loss per share, basic and diluted ​ ​ 78,287 ​ ​ 62,831 ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ (0.45) ​ $ (0.54)
Total outstanding potentially dilutive shares not included in the calculation of dilutive EPS	​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ 2020 2019 ​ (in thousands) Options to purchase common stock ​ 8,505 9,533 Restricted stock units ​ 4,140 ​ 2,086 Employee stock purchase plan ​ 77 ​ 99 ​ ​ 12,722 11,718

Description of Business (Detail

Description of Business (Details)	3 Months Ended
	Mar. 31, 2020segment
Description of Business
Number of operating segments	1

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Liquidity Matters (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 13, 2020	Oct. 17, 2019	Apr. 26, 2019	Jan. 01, 2019	Apr. 30, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Oct. 31, 2019	Apr. 30, 2019	Apr. 23, 2019	Dec. 31, 2018	Aug. 31, 2017	Aug. 14, 2017	Aug. 08, 2017
Policies
Net (loss) income						$ (35,372)	$ (34,091)
Cumulative-effect adjustment upon adoption				$ 400		403
Accumulated deficit						734,946	699,200	$ 699,171
Cash and cash equivalents						74,144		61,926
Marketable securities						331,681		379,065
Short-term Credit Line, outstanding balance						50,087		50,123
Long-term Term Loan, carrying amount						$ 72,881		$ 73,656
Common stock, shares issued						78,652,000		78,005,000
Payment of offering expenses		$ 400	$ 600
Proceeds from issuance of common stock		$ 216,200	$ 108,100
Aggregate principal amount						$ 75,000		$ 75,000
Debt principal balance						75,000		$ 75,000
2017 Term Loan
Policies
Long-term Term Loan, carrying amount						72,900
Remaining borrowing capacity										$ 50,000		$ 50,000	$ 50,000		$ 25,000
Common stock, shares issued										25,000			300,000	300,000
Stock issued (in dollars per share)														$ 8.16
Aggregate principal amount														$ 75,000
Debt principal balance														$ 75,000
Subsequent Event | 2.25% Convertible Senior Notes
Policies
Aggregate principal amount	$ 287,500				$ 287,500
Interest rate (as a percent)	2.25%				2.25%
Common stock that may be issued upon conversion of notes	9,634,700				9,634,700
Net proceeds	$ 278,900				$ 278,900
Debt principal balance	$ 287,500				287,500
Subsequent Event | 2017 Term Loan
Policies
Aggregate principal amount					75,000
Repayment of Term Loan					79,200
Debt principal balance					75,000
Debt extinguishment costs					$ 4,200
Equity offering
Policies
Common stock, shares issued									6,571,428		6,052,631
Stock issued (in dollars per share)		$ 35									$ 19
Accumulated Deficit
Policies
Net (loss) income						(35,372)	(34,091)
Cumulative-effect adjustment upon adoption						$ 403	$ (185)

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Restricted Cash (Details) $ in Millions	Mar. 31, 2020USD ($)
Summary of Significant Accounting Policies
Restricted cash, current portion in balance sheet	$ 0.1

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Allowance for credit losses	$ 4,300	$ 3,300
Credit losses	1,387
Write offs	$ 400

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Concentration (Details) - customer	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Sales | Customer
Risk and Uncertainties
Number of customers exceeding 10% of benchmark	0	0
Concentration risk (as a percent)	10.00%
Accounts receivable | Credit
Risk and Uncertainties
Number of customers exceeding 10% of benchmark	0		0
Concentration risk (as a percent)	10.00%

Summary of Significant Accoun_8

Summary of Significant Accounting Policies - Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Cost of revenues	$ 41,520	$ 41,605
Capitalized software	$ 1,100		$ 1,200
Capitalized software held for internal use
Estimated useful life (in years)	3 years
Amortized expense	$ 300	$ 300

Summary of Significant Accoun_9

Summary of Significant Accounting Policies - AOCIL (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 919
Increase in other comprehensive loss	4,747	$ 286
Ending balance	5,666
Net unrealized gain on available-for-sale securities, net of tax
Accumulated Other Comprehensive Income (Loss) [Line Items]
Increase in other comprehensive loss	4,747	286
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	919	(552)
Ending balance	$ 5,666	$ (266)

Summary of Significant Accou_10

Summary of Significant Accounting Policies - Property (Details)	3 Months Ended
	Mar. 31, 2020
Minimum
Property and Equipment
Estimated useful life	P3Y
Maximum
Property and Equipment
Estimated useful life	P5Y

Summary of Significant Accou_11

Summary of Significant Accounting Policies - Accounting Pronouncements (Details) $ in Millions	Dec. 31, 2019USD ($)
ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect adjustment	$ 0.4

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended			12 Months Ended
	Aug. 31, 2019	Feb. 28, 2019	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Sep. 30, 2019
Revenue recognized			$ 1,027		$ 478
Cost of revenues			41,520		41,605
Deferred revenue, Long-term			25,152				$ 23,808
Other assets			12,093				12,476
Deferred revenue			76,992				79,824
Deferred revenue, current portion			51,840				56,016
Total revenues			94,012		66,824
Deferred revenue, long-term portion			25,152				$ 23,808
Revenue recognized during the period that was included in deferred revenues at the beginning of the period			(3,455)
Product
Revenue recognized			1,000		500
Total revenues			$ 87,046		63,364
Product | Minimum
Billing collection period (in months)			9 months
Product | Maximum
Billing collection period (in months)			12 months
Licensing and other
Cost of revenues			$ 3,458		1,698
Total revenues			6,966		$ 3,460
Genetic testing services
Revenue recognized during the period that was included in deferred revenues at the beginning of the period			$ (200)
Qiagen
Proceeds from license agreement						$ 5,000
Agreement term			10 years
Revenue, remaining performance obligation						40,000
Qiagen | Volume, regulatory and commercial milestones
Revenue, remaining performance obligation						$ 10,000
Laboratory distribution partners | Product | Minimum
Billing collection period (in months)			2 months
Laboratory distribution partners | Product | Maximum
Billing collection period (in months)			3 months
BGI
Proceeds from license agreement		$ 50,000		$ 35,600
Receivable				$ 2,500
Agreement term		10 years
BGI | Sequencing services
Other assets								$ 6,000
BGI | Sequencing products
Other assets								4,000
BGI | Sequencing products and services
Other assets			$ 10,000					$ 10,000
Foundation Medicine, Inc. ("FMI")
Proceeds from license agreement			16,300
Agreement term	5 years
Automatic renewals, successive period thereafter	1 year
Foundation Medicine, Inc. ("FMI") | Upfront licensing fees and prepaid revenues
Initial transaction price	$ 13,300
Foundation Medicine, Inc. ("FMI") | Developmental, regulatory, and commercial milestones
Initial transaction price	$ 32,000
Foundation Medicine, Inc. ("FMI") | Developmental performance milestones
Proceeds from license agreement			3,000
Foundation Medicine, Inc. ("FMI") | Licensing fees and prepaid revenue
Proceeds from license agreement			13,300
BGI and FMI | Genetic testing services
Revenue recognized during the period that was included in deferred revenues at the beginning of the period			$ (3,300)

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Total revenues	$ 94,012	$ 66,824
Decrease to loss from operations	$ (34,872)	$ (31,746)
Basic and diluted (in dollars per share)	$ (0.45)	$ (0.54)
United States
Disaggregation of Revenue [Line Items]
Total revenues	$ 86,731	$ 60,283
Americas, excluding U.S.
Disaggregation of Revenue [Line Items]
Total revenues	782	818
Europe, Middle East, India, Africa
Disaggregation of Revenue [Line Items]
Total revenues	3,476	4,004
Asia Pacific and Other
Disaggregation of Revenue [Line Items]
Total revenues	3,023	1,719
Insurance carriers
Disaggregation of Revenue [Line Items]
Total revenues	70,672	50,201
Laboratory and other partners
Disaggregation of Revenue [Line Items]
Total revenues	15,683	10,023
Patients
Disaggregation of Revenue [Line Items]
Total revenues	7,657	6,600
Product
Disaggregation of Revenue [Line Items]
Total revenues	87,046	63,364
Upfront license and constellation and paternity
Disaggregation of Revenue [Line Items]
Total revenues	1,367	1,332
License and development services
Disaggregation of Revenue [Line Items]
Total revenues	4,802	148
Other, licensing and other
Disaggregation of Revenue [Line Items]
Total revenues	797	1,980
Licensing and other
Disaggregation of Revenue [Line Items]
Total revenues	$ 6,966	$ 3,460

Revenue Recognition - Accounts

Revenue Recognition - Accounts Receivable and Deferred Revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019
Assets
Accounts receivable	$ 61,577	$ 53,351
Liabilities:
Deferred revenue, current portion	51,840	56,016
Deferred revenue, long-term portion	25,152	23,808
Total deferred revenues	76,992	79,824
Current accounts receivable	61,577	53,351
Other noncurrent assets	$ 12,093	$ 12,476
BGI
Liabilities:
Accounts receivable			$ 2,500

Revenue Recognition - Changes i

Revenue Recognition - Changes in Balance of Deferred Revenues (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Revenue Recognition
Balance	$ 79,824
Increase in deferred revenues	710
Revenue recognized during the period that was included in deferred revenues at the beginning of the period	(3,455)
Revenue recognized from performance obligations satisfied within the same period	(87)
Balance	$ 76,992

Revenue Recognition - Deferred

Revenue Recognition - Deferred Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Revenue Recognition
Revenue recognized during the period that was included in deferred revenues at the beginning of the period	$ 3,455
Deferred revenue, current portion	51,840	$ 56,016
Deferred revenue, Long-term	25,152	23,808
Total deferred revenues	$ 76,992	$ 79,824

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Available-for-sale securities
Fair Value Measurements
Unrealized losses	$ 23,200
Recurring
Financial Assets:
Total financial assets	367,499	$ 401,542
Recurring | Money market deposits
Financial Assets:
Total financial assets	35,818	22,477
Recurring | U.S. Treasury securities
Financial Assets:
Total financial assets	249,314	293,157
Recurring | Municipal securities
Financial Assets:
Total financial assets	82,367	85,908
Recurring | Level 1
Financial Assets:
Total financial assets	285,132	315,634
Recurring | Level 1 | Money market deposits
Financial Assets:
Total financial assets	35,818	22,477
Recurring | Level 1 | U.S. Treasury securities
Financial Assets:
Total financial assets	249,314	293,157
Recurring | Level 2
Financial Assets:
Total financial assets	82,367	85,908
Recurring | Level 2 | Municipal securities
Financial Assets:
Total financial assets	$ 82,367	85,908
Contingent consideration | Evercord
Liabilities:
Total consideration		$ 4,700

Financial Instruments (Details)

Financial Instruments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)itemposition	Mar. 31, 2019item	Dec. 31, 2019USD ($)
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Estimated Fair Value	$ 331,681		$ 379,065
Other than temporary impairment	$ 0
Number of investments sold | item	0	0
Number of investments, unrealized loss position | position	10
Amortized Cost
Less than one year	$ 127,898
Greater than one year but less than five years	198,137
Total	326,035
Fair Value
Less than one year	128,675
Greater than one year but less than five years	203,006
Total	331,681
Available-for-sale securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	361,853		400,621
Unrealized Gain	5,688		1,008
Unrealized Loss	(42)		(87)
Estimated Fair Value	367,499		401,542
Unrealized loss position	23,200
Money market deposits
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	35,818		22,477
Estimated Fair Value	35,818		22,477
U.S. Treasury securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	243,821		292,506
Unrealized Gain	5,493		731
Unrealized Loss			(80)
Estimated Fair Value	249,314		293,157
Municipal securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Amortized Cost	82,214		85,638
Unrealized Gain	195		277
Unrealized Loss	(42)		(7)
Estimated Fair Value	82,367		85,908
Cash equivalents | Available-for-sale securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Estimated Fair Value	35,818		22,477
Short-term investments | Available-for-sale securities
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract]
Estimated Fair Value	$ 331,681		$ 379,065

Balance Sheet Components - Prop

Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Property and Equipment, net
Property and equipment, gross	$ 70,069	$ 64,807
Less: Accumulated depreciation and amortization	(43,351)	(41,524)
Total Property and Equipment, net	26,718	23,283
Depreciation expense	1,800
Impairment	0
Machinery and equipment
Property and Equipment, net
Property and equipment, gross	41,634	36,414
Furniture and fixtures
Property and Equipment, net
Property and equipment, gross	$ 1,376	1,376
Useful Life	3 years
Computer equipment
Property and Equipment, net
Property and equipment, gross	$ 1,796	1,828
Useful Life	3 years
Capitalized software held for internal use
Property and Equipment, net
Property and equipment, gross	$ 6,480	5,917
Useful Life	3 years
Leasehold improvements
Property and Equipment, net
Property and equipment, gross	$ 11,746	11,556
Construction-in-process
Property and Equipment, net
Property and equipment, gross	$ 7,037	$ 7,716
Minimum | Machinery and equipment
Property and Equipment, net
Useful Life	3 years
Maximum | Machinery and equipment
Property and Equipment, net
Useful Life	5 years

Balance Sheet Components - Othe

Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Sep. 30, 2019	Apr. 30, 2019	Dec. 31, 2018	Aug. 31, 2017	Aug. 14, 2017	Aug. 08, 2017
Balance Sheet Components [Line Items]
Common stock, shares issued	78,652,000		78,005,000
Cost of revenues	$ 41,520	$ 41,605
Amortization of debt discount	121	$ 98
Noncurrent assets	12,093		$ 12,476
Evercord
Balance Sheet Components [Line Items]
Net collections	500
Credit loss expense	1,200
Evercord | Contingent consideration
Balance Sheet Components [Line Items]
Total consideration			$ 4,700
Noncurrent assets
Balance Sheet Components [Line Items]
Debt discount	0
Long-term Debt
Balance Sheet Components [Line Items]
Debt discount	900
2017 Term Loan
Balance Sheet Components [Line Items]
Common stock, shares issued					25,000		300,000	300,000
Debt instrument, fee amount								$ 2,400
Remaining borrowing capacity					$ 50,000	$ 50,000	$ 50,000		$ 25,000
Debt discount								$ 2,700
2017 Term Loan | Noncurrent assets
Balance Sheet Components [Line Items]
Debt instrument, fee amount							$ 1,200
Evercord | Contingent consideration
Balance Sheet Components [Line Items]
Accounts receivable	3,100
BGI | Sequencing products and services
Balance Sheet Components [Line Items]
Noncurrent assets	$ 10,000			$ 10,000

Balance Sheet Components - Impa

Balance Sheet Components - Impairment for Receivables (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Balance Sheet Components
Bad debt expense	$ 1,387
Impairment	$ 0

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Compensation (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Balance Sheet Components
Accrued paid time off	$ 1,912	$ 1,850
Accrued commissions	6,997	5,767
Accrued bonuses	2,017	5,710
Other accrued compensation	5,027	2,761
Total accrued compensation	$ 15,953	$ 16,088

Balance Sheet Components - Ot_2

Balance Sheet Components - Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Balance Sheet Components
Reserves for refunds to insurance carriers	$ 11,599	$ 9,410	$ 11,051	$ 10,012
Accrued charges for outsourced testing	6,051	8,408
Testing and laboratory materials from suppliers	7,821	4,301
Marketing and corporate affairs	2,136	2,957
Legal, audit and consulting fees	5,055	2,873
Accrued shipping charges	209	305
Sales tax payable	1,412	1,691
Accrued specimen service fees	1,066	2,269
Clinical trials and studies	1,157	1,092
Operating lease liabilities, current portion	5,947	5,739
Fixed asset purchases	643	1,482
Other accrued expenses	7,297	8,516
Total other accrued liabilities	$ 50,393	$ 49,043

Balance Sheet Components - Rese

Balance Sheet Components - Reserve Balance and Activities for Refunds (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Balance Sheet Components
Beginning balance	$ 9,410	$ 10,012
Additional reserves	4,684	2,504
Reserves released	(2,495)	(1,465)
Ending balance	11,599	11,051
Released into revenue	$ 1,027	$ 478

Leases (Details)

Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)ft²location	Mar. 31, 2019USD ($)	Dec. 31, 2019USD ($)	Jun. 30, 2019USD ($)ft²
Lessee, Lease, Description [Line Items]
Operating lease liabilities, current portion included in other accrued liabilities | $	$ 5,947		$ 5,739
Operating lease liabilities, long-term portion | $	24,727		$ 26,297
Operating lease liabilities | $	$ 30,674
Weighted average remaining lease term	2 years 10 months 17 days
Weighted average discount rate (as a percent)	10.77%
Lease expense | $	$ 1,900
Operating lease payments | $	$ 2,200	$ 2,100
Corporate Headquarters Lease
Lessee, Lease, Description [Line Items]
Office space (area) | ft²	113,000
Number of office space locations | location	2
Term of lease	84 months
Renewal term of lease	5 years
"First Space" Sublease
Lessee, Lease, Description [Line Items]
Office space (area) | ft²	88,000
"Second Space" Sublease
Lessee, Lease, Description [Line Items]
Office space (area) | ft²	25,000
Corporate Headquarters Sublease
Lessee, Lease, Description [Line Items]
Office space (area) | ft²				25,879
Term of lease				48 months
Sublease receivable | $				$ 1,900
Tukwila, WA lease
Lessee, Lease, Description [Line Items]
Office space (area) | ft²	10,000
Term of lease	62 months
Renewal term of lease	5 years
Austin TX, Long-term Lease
Lessee, Lease, Description [Line Items]
Office space (area) | ft²	94,000
Term of lease	132 months

Leases - Payments (Details)

Leases - Payments (Details) $ in Thousands	Mar. 31, 2020USD ($)
Leases
2020 (remaining 9 months)	$ 6,633
2021	9,067
2022	9,319
2023	7,797
2024	2,400
2025 and thereafter	4,730
Total	39,946
Less: imputed interest	(9,272)
Operating lease liabilities	$ 30,674

Commitments and Contingencies_2

Commitments and Contingencies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Mar. 31, 2020USD ($)	Mar. 26, 2019claim
Other commitments
Shareholders (as a percent)	5.00%
Total commitments		$ 37,223
Laboratory instruments supplier
Other commitments
Total commitments		6,683
Material supplier
Other commitments
Total commitments		10,375
Application service provider
Other commitments
Total commitments		9,778
Gene sequencing reagents and kits
Other commitments
Total commitments		675
Other material supplier
Other commitments
Total commitments		9,712
Securities related claims
Other commitments
Estimate of possible loss		1,500
Commercial general liability claims
Other commitments
Estimate of possible loss		$ 300
CareDX's Patent Case
Other commitments
Number of claims | claim			2

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Jun. 30, 2015
Stock Based Compensation
Shares granted	4,140,000
2015 Plan
Stock Based Compensation
Shares reserved for issuance				3,451,495
Additional shares reserved for issuance				9,890,310
Performance-based awards
Stock Based Compensation
Stock-based compensation expense	$ 1,400,000	$ 200,000
Employee and non-employee stock options
Stock Based Compensation
Stock-based compensation expense	$ 7,417,000	$ 4,051,000
Shares available for issuance	5,120,000		6,416,000
Restricted stock units
Stock Based Compensation
Number of shares vested	291,000
Shares granted	2,071,000
2015 Employee Stock Purchase Plan
Stock Based Compensation
Shares reserved for issuance	893,548
Shares granted	0
Shares reserved for issuance as a proportion common stock outstanding (as a percent)	1.00%
Price in relation to fair market value of common stock on the date of grant, lower range limit (as a percent)	85.00%
Maximum number of shares a participant may receive during the period (in shares)	5,000
Maximum amount of award or purchase during a calendar year	$ 25,000
Maximum employee contribution of employee's cash compensation (as a percent)	15.00%
2015 Employee Stock Purchase Plan | Minimum
Stock Based Compensation
Shares reserved for issuance	880,000

Stock-Based Compensation - Perf

Stock-Based Compensation - Performance-based Awards (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted (in shares)	4,140
FMV
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Valuation Method	Fair Market Value		Fair Market Value
Black-Scholes Merton
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Valuation Method	Black-Scholes-Merton
Monte-Carlo
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Valuation Method	Monte-Carlo Simulation	Monte-Carlo Simulation		Monte-Carlo Simulation
Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,400			$ 200
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted (in shares)	2,071
RSUs Vested (in shares)	291
Restricted stock units | FMV
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted (in shares)	436		188
Restricted stock units | Monte-Carlo
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Granted (in shares)	300	50		300
RSUs Vested (in shares)				69
Employee and non-employee stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted (in shares)	409
Stock-based compensation expense	$ 7,417			$ 4,051
Employee and non-employee stock options | Black-Scholes Merton
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted (in shares)	129
Employee and non-employee stock options | Monte-Carlo
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted (in shares)	150			200
Options Vested (in shares)				38
Number of options vested				38

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Stock Based Compensation
RSUs granted (in shares)	(4,140)
RSUs forfeited/cancelled (in shares)	88
Employee and non-employee stock options
Stock Based Compensation
Shares available for grant, beginning balance	6,416
Additional shares authorized	3,120
Options granted (in shares)	(409)
Options forfeited (in shares)	45
Shares available for grant, end balance	5,120	6,416
Number of shares
Outstanding, beginning balance (in shares)	8,497
Options granted (in shares)	409
Options exercised (in shares)	(356)
Options forfeited (in shares)	(45)
Outstanding, end balance (in shares)	8,505	8,497
Exercisable (in shares)	5,078
Vested and expected to vest (in shares)	8,316
Weighted-Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 10.39
Granted (in dollars per share)	25.51
Exercised (in dollars per share)	10.74
Forfeited (in dollars per share)	17.76
Outstanding, end balance (in dollars per share)	11.07	$ 10.39
Exercisable (in dollars per share)	7.85
Vested and expected to vest (in dollars per share)	$ 10.96
Additional disclosures
Weighted average contractual term, options outstanding	6 years 9 months 10 days	6 years 10 months 17 days
Exercisable (in years)	5 years 6 months 14 days
Vested and expected to vest (in years)	6 years 8 months 26 days
Aggregate intrinsic value, options outstanding	$ 159,957	$ 197,955
Aggregate intrinsic value, options exercisable	111,759
Aggregate intrinsic value, vested and expected to vest	$ 157,297
Restricted stock units
Stock Based Compensation
RSUs granted (in shares)	(2,071)
RSUs forfeited/cancelled (in shares)	44

Stock-Based Compensation - Assu

Stock-Based Compensation - Assumptions (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Performance-based awards
Valuation of Stock Option Grants to Employees
Expected volatility, minimum	55.00%
Expected volatility, maximum	65.00%
Risk free interest rate, minimum	0.61%
Risk free interest rate, maximum	1.64%
Performance-based awards | Minimum
Valuation of Stock Option Grants to Employees
Expected term (years)	5 years 3 months
Performance-based awards | Maximum
Valuation of Stock Option Grants to Employees
Expected term (years)	7 years 3 months
Expected dividend yield	0.00%
Employee and non-employee stock options
Stock Based Compensation
Options granted (in shares)	409,000
Employee stock options
Valuation of Stock Option Grants to Employees
Expected volatility, minimum	49.94%	42.53%
Expected volatility, maximum	58.53%	42.75%
Expected dividend yield	0.00%	0.00%
Risk free interest rate, minimum	0.44%	2.26%
Risk free interest rate, maximum	1.70%	2.60%
Employee stock options | Minimum
Valuation of Stock Option Grants to Employees
Expected term (years)	5 years 3 months 7 days	5 years 3 months 29 days
Employee stock options | Maximum
Valuation of Stock Option Grants to Employees
Expected term (years)	10 years	5 years 6 months 10 days
Non-employee stock options
Stock Based Compensation
Options granted (in shares)	72,849
Options unvested (in shares)	23,126

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Units (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Shares
Granted (in shares)	4,140
Canceled/Forfeited (in shares)	(88)
Restricted stock units
Shares
Balance (in shares)	2,404
Granted (in shares)	2,071
Vested (in shares)	(291)
Canceled/Forfeited (in shares)	(44)
Balance (in shares)	4,140
Weighted Average Grant Date Fair Value
Balance (in dollars per share) | $ / shares	$ 19.86
Granted (in dollars per share) | $ / shares	26.67
Vested (in dollars per share) | $ / shares	16.88
Canceled/Forfeited (in dollars per share) | $ / shares	21.35
Balance (in dollars per share) | $ / shares	$ 22.48

Stock-Based Compensation - Comp

Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Employee and non-employee stock options
Stock based compensation expense
Options granted (in shares)	409,000
Stock-based compensation expense	$ 7,417	$ 4,051
Unrecognized compensation expense	$ 96,700
Unrecognized compensation expense, weighted average period of recognition	3 years 1 month 6 days
Employee and non-employee stock options | Cost of revenues
Stock based compensation expense
Stock-based compensation expense	$ 314	168
Employee and non-employee stock options | Research and development
Stock based compensation expense
Stock-based compensation expense	1,842	894
Employee and non-employee stock options | Selling, general and administrative
Stock based compensation expense
Stock-based compensation expense	5,261	2,989
Employee stock options
Stock based compensation expense
Stock-based compensation expense	7,248	3,708
Employee stock options | Cost of revenues
Stock based compensation expense
Stock-based compensation expense	314	168
Employee stock options | Research and development
Stock based compensation expense
Stock-based compensation expense	1,682	894
Employee stock options | Selling, general and administrative
Stock based compensation expense
Stock-based compensation expense	$ 5,252	2,646
Non-employee stock options
Stock based compensation expense
Options granted (in shares)	72,849
Options unvested (in shares)	23,126
Stock-based compensation expense	$ 169	343
Non-employee stock options | Research and development
Stock based compensation expense
Stock-based compensation expense	160
Non-employee stock options | Selling, general and administrative
Stock based compensation expense
Stock-based compensation expense	$ 9	$ 343

Debt (Details)

Debt (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 29, 2019	Dec. 31, 2018	Aug. 14, 2017	Aug. 08, 2017	Apr. 30, 2019	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Dec. 31, 2019	Aug. 31, 2017	Sep. 30, 2015
Debt Instrument [Line Items]
Issuance of common stock to Orbimed (in shares)	25,000
Common stock, shares issued						78,652,000		78,652,000	78,005,000
Amortization of debt discount						$ 121	$ 98
Interest expense						2,464	2,724
Debt principal balance						75,000		$ 75,000	$ 75,000
Less: unamortized debt discount						(2,119)		(2,119)	(1,344)
Net carrying amount at end of period						72,881		72,881	$ 73,656
Line Of Credit-UBS
Debt Instrument [Line Items]
Maximum borrowing capacity											$ 50,000
Outstanding balance						49,000		49,000
Accrued interest								1,100
Interest expense						$ 300	400
Line Of Credit-UBS | LIBOR
Debt Instrument [Line Items]
Spread on interest rate (as a percent)						1.10%
Noncurrent assets
Debt Instrument [Line Items]
Debt discount						$ 0		0
Long-term Debt
Debt Instrument [Line Items]
Debt discount						900		900
2017 Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity										$ 100,000
Remaining borrowing capacity		$ 50,000		$ 25,000	$ 50,000					$ 50,000
Outstanding balance				$ 75,000
Interest expense						2,100	$ 2,300
Additional interest in the event of default (as a percent)				3.00%
Common stock, shares issued			300,000		25,000					300,000
Debt instrument, fee amount			$ 2,400
Stock issued (in dollars per share)			$ 8.16
Legal fees			$ 300
Debt discount			2,700
Debt, increase (decrease)			(2,100)
Debt principal balance			$ 75,000
Net carrying amount at end of period						$ 72,900		$ 72,900
2017 Term Loan | Minimum
Debt Instrument [Line Items]
Remaining borrowing capacity					$ 25,000
Prepayment premium (as a percent)				2.50%
2017 Term Loan | Maximum
Debt Instrument [Line Items]
Prepayment premium (as a percent)				12.50%
2017 Term Loan | LIBOR
Debt Instrument [Line Items]
Spread on interest rate (as a percent)		8.75%		8.75%	8.75%
Base interest rate (as a percent)		1.00%		1.00%	1.00%
2017 Term Loan | LIBOR | Scenario of minimum borrowing capacity of drawn
Debt Instrument [Line Items]
Spread on interest rate (as a percent)		8.25%			8.25%
Base interest rate (as a percent)		1.00%			1.00%
2017 Term Loan | Noncurrent assets
Debt Instrument [Line Items]
Debt instrument, fee amount										$ 1,200

Income taxes (Details)

Income taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Income Taxes
Income tax expense	$ 23,000	$ 74,000
Unrecognized tax benefits	9,000,000		$ 8,600,000
Interest and penalties accrued	$ 0

Net Loss per Share - Loss per S

Net Loss per Share - Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Numerator:
Net loss, basic and diluted	$ (35,372)	$ (34,091)
Denominator:
Weighted-average number of shares used in computing net loss per share, basic and diluted	78,287	62,831
Net loss per share, basic and diluted (in dollars per share)	$ (0.45)	$ (0.54)

Net Loss per Share - Potentiall

Net Loss per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	12,722	11,718
Employee and non-employee stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	8,505	9,533
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	4,140	2,086
Employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	77	99

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Thousands	Apr. 13, 2020	Apr. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Aug. 14, 2017
Subsequent Event [Line Items]
Debt principal balance			$ 75,000	$ 75,000
Subsequent Event | 2.25% Convertible Senior Notes
Subsequent Event [Line Items]
Interest rate (as a percent)	2.25%	2.25%
Common stock that may be issued upon conversion of notes	9,634,700	9,634,700
Net proceeds	$ 278,900	$ 278,900
Debt principal balance	$ 287,500	287,500
2017 Term Loan
Subsequent Event [Line Items]
Debt principal balance					$ 75,000
2017 Term Loan | Subsequent Event
Subsequent Event [Line Items]
Repayment of Term Loan		79,200
Debt principal balance		75,000
Debt extinguishment costs		$ 4,200