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Guardant Health, Inc. - Annual Report: 2023 (Form 10-K)

Stockholders’ equity:
Preferred stock, par value of $ per share; shares authorized, shares issued and outstanding as of December 31, 2023 and 2022
  
Common stock, par value of $ per share; shares authorized as of December 31, 2023 and 2022; and shares issued and outstanding as of December 31, 2023 and 2022, respectively
  
Additional paid-in capital
  
Accumulated other comprehensive loss
()()
Accumulated deficit
()()
Total Stockholders’ Equity
  
Total Liabilities and Stockholders’ Equity
$ $ 
The accompanying notes are an integral part of these consolidated financial statements.
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Guardant Health, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Year Ended December 31,
202320222021
Revenue:
Precision oncology testing $ $ $ 
Development services and other
   
Total revenue
   
Costs and operating expenses:
Cost of precision oncology testing   
Cost of development services and other   
Research and development expense   
Sales and marketing expense   
General and administrative expense   
Other operating expense   
Total costs and operating expenses
   
Loss from operations
()()()
Interest income   
Interest expense()()()
Other income (expense), net () 
Fair value adjustments of noncontrolling interest liability () 
Loss before provision for income taxes
()()()
Provision for income taxes
   
Net loss
()()()
Adjustment of redeemable noncontrolling interest
  ()
Net loss attributable to Guardant Health, Inc. common stockholders
$()$()$()
Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted
$()$()$()
Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted
   
The accompanying notes are an integral part of these consolidated financial statements.
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Guardant Health, Inc.
Consolidated Statements of Comprehensive Loss
(in thousands)
Year Ended December 31,
202320222021
Net loss
$()$()$()
Other comprehensive income (loss), net of tax impact:
Unrealized gain (loss) on available-for-sale securities
()()
Foreign currency translation adjustments
()()()
Other comprehensive income (loss) ()()
Comprehensive loss
$()$()$()
Comprehensive loss attributable to redeemable noncontrolling interest
  ()
Comprehensive loss attributable to Guardant Health, Inc. common stockholders
$()$()$()
The accompanying notes are an integral part of these consolidated financial statements.
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Guardant Health, Inc.
Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity
(in thousands, except share data)
Redeemable Noncontrolling InterestCommon Stock Additional
Paid-in
Capital		Accumulated
Other
Comprehensive Gain (Loss)		 
Accumulated
Deficit		Total Stockholders’ Equity
SharesAmount
Balance as of January 1, 2021
$  $ $ $ $()$ 
Cumulative effect adjustment for ASU 2020-06 adoption— — — ()—  ()
Issuance of common stock upon exercise of stock options—  —  — —  
Vesting of restricted stock units—  — — — — — 
Vesting of common stock exercised early— — —  — —  
Issuance of common stock under employee stock purchase plan—  —  — —  
Taxes paid related to net share settlement of restricted stock units— — — ()— — ()
Stock-based compensation— — —  — —  
Adjustment of redeemable noncontrolling interest — — — — ()()
 Reclassification of redeemable noncontrolling interest to noncontrolling interest liability()— — — — — — 
Other comprehensive loss, net of tax impact— — — — ()— ()
Net loss— — — — — ()()
Balance as of December 31, 2021
    ()() 
Issuance of common stock upon exercise of stock options—  —  — —  
Vesting of restricted stock units—  — — — — — 
Vesting of common stock exercised early— — —  — —  
Issuance of common stock under employee stock purchase plan—  —  — —  
Taxes paid related to net share settlement of restricted stock units— — — ()— — ()
Stock-based compensation— — —  — —  
 Tender offer issued in connection with the Joint Venture Acquisition and acquisition related costs— — — ()— — ()
Other comprehensive loss— — — — ()— ()
Net loss— — — — — ()()
Balance as of December 31, 2022
    ()() 
 Issuance of common stock upon follow-on public offering, net of offering costs of $
—  —  — —  
Issuance of common stock upon registered direct offering—  —  — —  
Issuance of common stock upon exercise of stock options—  —  — —  
Vesting of restricted stock units—  — — — — — 
Issuance of common stock under employee stock purchase plan —  —  — —  
Taxes paid related to net share settlement of restricted stock units— — — ()— — ()
Stock-based compensation— — —  — —  
Other comprehensive income— — — —  —  
Net loss— — — — — ()()
Balance as of December 31, 2023
$  $ $ $()$()$ 
The accompanying notes are an integral part of these consolidated financial statements.
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Guardant Health, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
202320222021
OPERATING ACTIVITIES:
Net loss
$()$()$()
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization    
Operating lease costs   
Contingent consideration   
Stock-based compensation    
Amortization of debt issuance costs   
Amortization of (discount) premium on marketable debt securities()  
Unrealized (gains) losses on marketable equity securities()  
Impairment of non-marketable equity securities and other related assets   
Fair value adjustments of noncontrolling interest liability   
Other()  
Cash effect of changes in operating assets and liabilities:
Accounts receivable, net  ()
Inventory, net()()()
Prepaid expenses and other current assets, net() ()
Other assets, net  ()
Accounts payable and accrued liabilities   
Operating lease liabilities()() 
Deferred revenue   
Net cash used in operating activities()()()
INVESTING ACTIVITIES:
Purchase of marketable debt securities()()()
Maturity of marketable debt securities   
Purchase of non-marketable equity securities and other related assets()()()
Purchase of property and equipment ()()()
Other   
Net cash provided by (used in) investing activities  ()
FINANCING ACTIVITIES:
Proceeds from issuance of common stock under employee stock purchase plan   
Proceeds from issuance of common stock upon exercise of stock options   
Taxes paid related to net share settlement of restricted stock units()()()
Proceeds from equity offerings   
Payment of equity offering costs ()  
Joint Venture Acquisition () 
Tender offer issued in connection with the Joint Venture Acquisition and acquisition related costs () 
Other ()()
Net cash provided by (used in) financing activities ()()
Net effect of foreign exchange rate changes on cash, cash equivalents and restricted cash()()()
Net increase (decrease) in cash, cash equivalents and restricted cash  ()()
Cash, cash equivalents and restricted cash – Beginning of period    
Cash, cash equivalents and restricted cash – End of period $ $ $ 
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes$ $ $ 
Supplemental Disclosures of Noncash Investing and Financing Activities:
Operating lease liabilities arising from obtaining right-of-use assets$ $ $ 
Purchase of property and equipment included in accounts payable and accrued liabilities$ $ $ 
Reclassification of redeemable noncontrolling interest to noncontrolling interest liability
$ $ $ 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$ $$
Restricted cash – included in other assets, net   
Total cash, cash equivalents and restricted cash$ $ $ 
The accompanying notes are an integral part of these consolidated financial statements.
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Guardant Health, Inc.
Notes to Consolidated Financial Statements
1.
2.
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operating and reportable segment. The Company's chief operating decision makers are its Co-Chief Executive Officers, who review financial information presented on a consolidated basis for the purposes of making operating decisions, assessing financial performance and allocating resources.
Restricted cash balance was $ million and $ million as of December 31, 2023, and 2022, respectively, which was included in other assets in the accompanying consolidated balance sheets.
 million and $ million as of December 31, 2023, and 2022, respectively, and are included in other assets, net on the accompanying consolidated balance sheets.
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 million for the year ended December 31, 2023 for of its non-marketable equity security investments, included in other income (expense), net on the accompanying consolidated statements of operations. In addition, in connection with the investment in non-marketable securities purchased by the Company, the Company acquired rights to purchase the investee at a pre-determined price subject to additional adjustments based on the performance of the investee, on or before December 31, 2022. In September 2022, the Company decided not to exercise such rights to purchase the investee and recorded an impairment of $ million for the year ended December 31, 2022, included in other income (expense), net on the accompanying consolidated statements of operations.
Pursuant to another investment in non-marketable securities purchased by the Company, the Company acquired rights to purchase the investee at a pre-determined price subject to additional adjustments based on the performance of the Company, on or before October 1, 2023, and acquired rights to obtain the exclusive license of the investee's certain technologies. In June 2023, the Company decided not to exercise such rights and recorded an impairment of $ million for the year ended December 31, 2023, included in other income (expense), net on the accompanying consolidated statements of operations.
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 % %
Customer B
 % % % % %
Customer C
*** %*
*    less than 10%
The Company's other receivables and other assets include payments due from a third-party in relation to the settlement of a patent dispute reached in August 2020 for $ million payable over a period of years. As of December 31, 2023, the Company has received $ million payments from the third-party, and evaluated and recorded a credit loss for the remaining $ million considering the third-party's credit worthiness and lack of financial history.
 $ 
Allowance for Credit Losses
  
Net Amount
$ $ Other assets:
Gross Amount
$ $ 
Allowance for Credit Losses
()()
Net Amount
$ $ 
The following table summarizes the allowance for credit losses activities for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
202320222021
(in thousands)
Prepaid expenses and other current assets:
Allowance for credit losses—Beginning of period
$ $ $ 
Charged to (reversed from) other income (expense), net
()()()
Reclassification
   
Allowance for credit losses—End of period
$ $ $ 
Other assets:
Allowance for credit losses—Beginning of period
$ $ $ 
Reclassification
()()()
Allowance for credit losses—End of period
$ $ $ 
 million and $ million, respectively.
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years
Furniture and fixtures
years
Computer hardware and computer software
years
Leasehold improvementsLesser of estimated useful life or remaining lease term million was reclassified as an intangible asset with a useful life of years.
Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill is not amortized but is tested for impairment at least annually during the fourth fiscal quarter, or if circumstances indicate its value may no longer be recoverable. The Company continues to operate in  segment, which is considered to be the sole reporting unit and, therefore, goodwill is tested for impairment at the enterprise level. As of December 31, 2023, there has been  impairment of goodwill.
— years.
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The Company had immaterial amount of impairment for long-lived assets for the years ended December 31, 2023, 2022 and 2021.
For the years ended December 31, 2023 and 2022, the Company recorded post-acquisition contingent consideration expense of $ million and $ million, respectively, included in research and development expenses on the accompanying consolidated statements of operations. The Company did t record any post-acquisition contingent consideration expense for the year ended December 31, 2021.
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million and $ million, respectively, of which $ million and $ million was considered long-term and recorded within other long-term liabilities on the accompanying consolidated balance sheets. Revenue recognized in the year ended December 31, 2023 that was included in the deferred revenue balance as of December 31, 2022 was $ million, and revenue recognized in the year ended December 31, 2022 that was included in the deferred revenue balance as of December 31, 2021 was $ million, respectively.
Transaction price allocated to the remaining performance obligations
Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenues in future periods. The Company expects to recognize substantially all of the remaining transaction price in the next - years.
The Company incurred advertising costs of $ million, $ million and $ million for the years ended December 31, 2023, 2022 and 2021, respectively.
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3.
% ownership interest in the Joint Venture and seats on the board of the Joint Venture.
The joint venture agreement included a put-call arrangement with respect to the shares of the Joint Venture held by SoftBank and its affiliates. Under certain specified circumstances and on terms specified in the joint venture agreement, including timely written notice, SoftBank had the right to cause the Company to purchase all shares of the Joint Venture held by SoftBank and its affiliates, or the put right, and the Company had a right to purchase all such shares, or the call right.
Prior to November 2021, the noncontrolling interest held by SoftBank contained embedded put-call redemption features that were not solely within the Company’s control and had been classified outside of permanent equity in the consolidated balance sheets. The put-call feature embedded in the redeemable noncontrolling interest did not require bifurcation as it did not meet the definition of a derivative and was considered to be clearly and closely related to the redeemable noncontrolling interest. The Company elected to recognize the changes in redemption value immediately as they occur as if the put-call redemption feature were exercisable at the end of the reporting period. The adjustment of redeemable noncontrolling interest was recorded as an adjustment to net loss attributable to Guardant Health, Inc. common stockholders in the Company's consolidated statement of operations.
In November 2021, the Company exercised its call right contained in the joint venture agreement with SoftBank to purchase all of the shares held by SoftBank and its affiliates in consideration for the payment of the aggregate purchase price to be determined based on an independent third-party valuation. Upon the Company's exercise of the call right in November 2021, SoftBank no longer had the option to exercise its put right. In connection with exercising the call right, the Company reclassified $ million from redeemable noncontrolling interest to noncontrolling interest liability.
In June 2022, the Company purchased all of the shares held by SoftBank and its affiliates in consideration for a cash payment of the aggregate purchase price of $ million, which resulted in $ million of fair value adjustments to the noncontrolling interest liability for the year ended December 31, 2022. In connection with the Joint Venture Acquisition, the Company also issued a tender offer to purchase the Joint Venture's Class B common stock issued and issuable upon exercise of vested Joint Venture's stock options held by the Joint Venture's employees (see Note 11, Stock-Based Compensation).
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4.
 $ 
Leasehold improvements
  
Computer hardware
  
Construction in progress
  
Furniture and fixtures
  
Computer software
  
Property and equipment, gross
$ $ 
Less: accumulated depreciation
()()
Property and equipment, net
$ $ 
Depreciation expense related to property and equipment was $ million, $ million and $ million for the years ended December 31, 2023, 2022 and 2021, respectively.
Accounts Payable and Accrued Liabilities
 $ Accrued compensation  
Operating lease liabilities
  
Others
  
Total accounts payable and accrued liabilities
$ $ 
5.
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 $ $ $ 
Total cash equivalents
$ $ $ $ 
U.S. government debt securities
$ $ $ $ 
Total short-term marketable debt securities
$ $ $ $ Long-term marketable equity securities$ $ $ $ 
Total
$ $ $ $ 
Financial Liabilities:
Contingent consideration
$ $ $ $ Total$ $ $ $ 
December 31, 2022
Fair ValueLevel 1Level 2Level 3
(in thousands)
Financial Assets:
Money market funds
$ $ $ $ 
U.S. government debt securities    
Total cash equivalents
$ $ $ $ 
U.S. government debt securities
$ $ $ $ 
Total short-term marketable debt securities
$ $ $ $ 
Long-term marketable equity securities
$ $ $ $ 
Total
$ $ $ $ 
Financial Liabilities:
Contingent consideration
$ $ $ $ 
Total
$ $ $ $ 
The Company measures the fair value of money market funds based on quoted prices in active markets for identical securities. U.S. government debt securities are valued taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.
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lock-up period from Lunit's IPO date, during which the Company shall not transfer Lunit's shares between accounts, establish or cancel pledges, sell, or withdraw such shares, without approval from the Korea Exchange. In November 2023, Lunit issued bonus shares to its existing shareholders by allocating one new share for each existing share, and the Company is subject to the same lock-up period with the same restrictions for these bonus shares. As of December 31, 2023 and 2022, the balance of the investment in Lunit was $ million and $ million, respectively, included in other assets, net, on the accompanying consolidated balance sheets. In addition, the Company recorded $ million unrealized gains and $ million unrealized losses on the investment in Lunit for the years ended December 31, 2023 and 2022, respectively, included in other income (expense), net on the accompanying consolidated statements of operations. The Company did t record any unrealized gains or losses on the investment in Lunit for the year ended December 31, 2021.
There were no transfers between Level 1, Level 2 and Level 3 during the periods presented.
Acquisition-related contingent consideration is measured at fair value on a quarterly basis and changes in estimated contingent consideration to be paid are included in general and administrative expense in the consolidated statements of operations. The fair value of acquisition-related contingent consideration is estimated using a multiple-outcome discounted cash flow valuation technique. Contingent consideration is classified within Level 3 of the fair value hierarchy, as it is based on a probability that includes significant unobservable inputs. The significant unobservable inputs include a probability-weighted estimate of achievement of certain commercialization milestones, and discount rate to present value the expected payments. A significant change in any of these input factors in isolation could have a material impact to fair value measurement. As of December 31, 2023 and 2022, the Company's acquisition-related contingent consideration liability was $ million and $ million, respectively, of which $ million and $ million was considered long-term and recorded within other long-term liabilities on the accompanying consolidated balance sheets.
Prior to the completion of the Joint Venture Acquisition in June 2022, the fair value of the noncontrolling interest liability was considered to be a Level 3 measurement and was determined based on an annual internal rate of return of % on the initial amount of $ million invested by SoftBank in May 2018, to the date of Company's exercising the call right in November 2021. The noncontrolling interest liability was fully paid by June 30, 2022 (see Note 3, Joint Venture).
 $ $    ))  ) 
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 $ $ $ 
U.S. government debt securities
  () 
Total
$ $ $()$ 
December 31, 2022
Amortized CostGross Unrealized GainGross Unrealized LossEstimated Fair Value
(in thousands)
Money market fund
$ $ $ $ 
U.S. government debt securities
  () 
Total
$ $ $()$ 
None of the Company’s marketable debt securities had been in an unrealized loss position for more than one year as of December 31, 2023.
 $()$ $()$ $()
Total
$ $()$ $()$ $()
material realized gains or losses on marketable debt securities for the periods presented. The Company determined that it did have the ability and intent to hold all marketable debt securities that had been in a continuous loss position until maturity or recovery and the loss position was temporary due to market volatility, thus there has been recognition of credit losses for the years ended December 31, 2023, 2022 and 2021, respectively.
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6.
 $()$ 
Non-compete agreements and other covenant rights
 () Acquired technology () 
Total intangible assets subject to amortization
 () Intangible assets not subject to amortization:Goodwill —  
Total purchased intangible assets
$ $()$ 
December 31, 2022
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountRemaining Weighted-Average Useful Life
(in thousands)(in years)
Intangible assets subject to amortization:
Acquired license$ $()$ 
Non-compete agreements and other covenant rights () 
Acquired technology () 
Total intangible assets subject to amortization
 () 
Intangible assets not subject to amortization:
Goodwill —  
Total purchased intangible assets
$ $()$ 
Amortization of finite-lived intangible assets was $ million, $ million and $ million, for the years ended December 31, 2023, 2022 and 2021, respectively.
 2025 2026 2027 2028 
2029 and thereafter
 Total$ 
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7.
billion principal amount of its % Convertible Senior Notes due 2027, or the 2027 Notes. The 2027 Notes do not bear interest, and the principal amount of the Notes will not accrete. However, special interest and additional interest may accrue on the 2027 Notes at a rate per annum not exceeding % (subject to certain exceptions) upon the occurrence of certain events such as the failure to file certain reports to the Securities and Exchange Commission, or to remove certain restrictive legends from the Notes. The Notes will mature on November 15, 2027, unless repurchased, redeemed or converted earlier.
Before August 15, 2027, holders of the 2027 Notes will have the right to convert their 2027 Notes only under the following circumstances:
•during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on March 31, 2021, if the last reported sale price of the Company's common stock exceeds % of the conversion price for each of at least trading days (whether or not consecutive) during the consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, or the sale price condition;
•during the consecutive business days immediately after any consecutive trading day period, or the measurement period, if the trading price per $1,000 principal amount of the Notes for each trading day of the measurement period is less than % of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on such trading day; or
•upon the occurrence of specified corporate events
From and after August 15, 2027, holders of the 2027 Notes may convert their 2027 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.
The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.
The initial conversion rate is 7.1523 shares of common stock per $1,000 principal amount of 2027 Notes, which represents an initial conversion price of approximately $ per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.
The Company may not redeem the 2027 Notes at its option at any time before November 20, 2024. The Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after November 20, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds % of the conversion price on (i) each of at least trading days, whether or not consecutive, during the consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.
If certain corporate events that constitute a “Fundamental Change” occur, then, subject to a limited exception for certain cash mergers, holders of Notes may require the Company to repurchase their 2027 Notes at a cash repurchase price equal to the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.
Since the 2027 Notes were not convertible as of December 31, 2023, the net carrying amount of the 2027 Notes was classified as a long-term liability.
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 $ Less: debt issuance costs, net of amortization()()Net carrying amount$ $ 
The total estimated fair value of the 2027 Notes was $ billion and $ billion as of December 31, 2023 and 2022, respectively. The fair value was determined based on the closing trading price per $ of the 2027 Notes as of the last day of trading for the period.
 $ $ Total interest expense recognized$ $ $ Effective interest rate % % %
Note Hedges
To minimize the impact of potential economic dilution upon conversion of the 2027 Notes, the Company entered into convertible note hedge transactions, or the 2027 Note Hedges, with respect to its common stock concurrent with the issuance of the Notes. The 2027 Note Hedges cover, subject to customary adjustments, the number of shares of common stock initially underlying the Notes. The strike price of the 2027 Note Hedges will initially be approximately $ per share, which represents a premium of % over the last reported sale price of the Company’s common stock of $ per share on November 16, 2020, and is subject to certain adjustments under the terms of the 2027 Note Hedges.
The 2027 Note Hedges will expire upon maturity of the 2027 Notes. The 2027 Note Hedges are separate transactions and are not part of the terms of the 2027 Notes. Holders of the 2027 Notes will not have any rights with respect to the 2027 Note Hedges. The shares receivable related to the 2027 Note Hedges are excluded from the calculation of diluted earnings per share as they are anti-dilutive.
million for the 2027 Note Hedges, which has been recorded as a reduction to additional paid-in capital and will not be remeasured.
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8.
to years, some of which include one or more options to renew. As leases approach maturity, the Company considers various factors such as market conditions and the terms of any renewal options that may exist to determine whether it will renew the lease, as such, the Company does not include renewal options in its lease terms for calculating its lease liability, as the renewal options allow it to maintain operational flexibility and the Company is not reasonably certain it will exercise these renewal options at the time of the lease commencement. In July 2020, the Company entered into lease agreements for additional office space in Palo Alto, California, or the Palo Alto Lease, and in San Diego, California, or the San Diego Lease, and took possession of these facilities in March 2021. The San Diego Lease has a term of years, and the Palo Alto Lease has a term of years with an option to renew the lease term for an additional years which has not been considered in the determination of ROU asset or lease liability as the Company does not consider it reasonably certain of exercising the renewal option. Both leases consist of fixed and variable payments and are being accounted for as operating leases. The Company estimated the incremental borrowing rate to determine the present value of lease payments for the San Diego and Palo Alto leases using trading data of the Company's convertible debt adjusted for credit rating and market yield curves.
Operating lease expense for the years ended December 31, 2023, 2022 and 2021, was $ million, $ million and $ million, respectively, which includes both lease and non-lease components (primarily common area maintenance charges and property taxes).
Weighted-average discount rate
 % % 2025 2026 2027 2028 
2029 and thereafter
 Total operating lease payments$ Less: imputed interest()Total operating lease liabilities$ 
Finance leases are not material to the Company's consolidated financial statements.
9.
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of the Company’s patents. Discovery in the case has concluded. In October 2023, the District Court dismissed with prejudice TwinStrand’s infringement claims related to U.S. Patent Nos. 10,689,699 and 10,752,951.
On November 14, 2023, a jury verdict was entered in favor of TwinStrand Biosciences and the University of Washington and against the Company. The jury found that the Company willfully infringed U.S. Patent Nos. 10,287,631 and 10,760,127, and awarded TwinStrand Biosciences and the University of Washington $ million in damages, representing a % royalty on past sales. As a result, the Company recorded a liability of $ million in the fourth quarter of 2023, which is reflected as a charge to other operating expense on its consolidated statements of operations, and as a component of other long-term liabilities on its consolidated balance sheets. Post-trial motions by both parties are due on March 4, 2024, where the Company will file motions to overturn the jury’s verdict, seek a new trial, and/or amend the judgment. TwinStrand BioSciences has indicated to the District Court that it will seek treble damages based on the jury’s finding of willful infringement, pre- and post-judgment interest, and a go-forward running royalty. A hearing date has not yet been set on the post-trial motions. The Company strongly disagrees with the jury verdict and will vigorously contest the verdict and judgment through post-trial motions in the District Court, and if needed, through appeal to the U.S. Court of Appeals for the Federal Circuit.
On August 1, 2023, the Company publicly announced that it entered into a Collaboration and Settlement Agreement, or the Collaboration Agreement, with Illumina, Inc., or Illumina. Under the terms of the Collaboration Agreement, the parties have agreed to extend their long-standing commercial relationship by agreeing to collaborate on the sharing of specimen samples in order to advance cancer research, and by entering into a new long-term purchase and supply commitment. Furthermore, the parties agreed to dismiss with prejudice the March 2022 lawsuit filed by Illumina in the U.S. District Court for the District of Delaware, Illumina, Inc. v. Guardant Health, Inc. et al, Case No. 1:22-cv-00334-GBW-CJB, including any allegations related to the subject intellectual property.
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10.
dividends on the Company’s common stock had been declared by the Board of Directors. Shares underlying unvested restricted stock units Shares underlying unvested market-based restricted stock units Shares underlying unvested performance-based restricted stock units 
Shares available for issuance under the 2018 Incentive Award Plan
 Shares available for issuance under the 2018 Employee Stock Purchase Plan Shares available for issuance under the 2023 Employment Inducement Incentive Award Plan  Total
Equity Offering
In May 2023, the Company completed a follow-on underwritten public offering, in which it issued and sold shares of its common stock at a price of $ per share, and received net proceeds of $ million after deducting underwriting discounts and commissions and other offering costs of $ million. In December 2023, the Company completed a registered direct offering with an investment management firm, in which it issued and sold shares of its common stock at a price of $ per share, and received net proceeds of $ million.
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11.
shares reserved under the 2012 Plan were forfeited. Any outstanding awards granted under the 2012 Plan remain outstanding, subject to the terms of the 2012 Plan and applicable award agreement, and further cancellation of awards granted under the 2012 Plan are not available for grant in the future. No further grants will be made under the 2012 Plan. The number of shares of common stock available for issuance under the 2018 Plan may be increased on January 1 of each calendar year beginning in 2019 and ending in 2028 by an amount equal to the least of (i) shares, (ii) four percent of the shares of common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, assuming the conversion of any shares of preferred stock, but excluding shares issuable upon the exercise or payment of stock options, warrants or other equity securities with respect to which shares have not actually been issued, and (iii) such smaller number of shares as determined by the Company’s Board of Directors.
2023 Employment Inducement Incentive Award Plan
In August 2023, the Company’s Board of Directors adopted the 2023 Employment Inducement Incentive Award Plan, or the 2023 Plan, under which the Company may exclusively grant awards to its new employees as an inducement material to the employee’s entry into employment with the Company. The 2023 Plan was approved by the Company's Board of Directors without stockholder approval in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules.

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  $ $ 
2018 Plan annual increase(1)
 — Granted()  Exercised— () Canceled () Restricted stock units granted()— 
Restricted stock units canceled
 — Market-based restricted stock units canceled — Performance-based restricted stock units granted()— Performance-based restricted stock units canceled — 
Balance as of December 31, 2021
    
2018 Plan annual increase(1)
 — Granted()  Granted in connection with the Joint Venture Acquisition()  Exercised— () Canceled () Restricted stock units granted()— 
Restricted stock units canceled
 — Performance-based restricted stock units granted()— Performance-based restricted stock units canceled — 
Balance as of December 31, 2022
    
2018 Plan annual increase(1)
 — Shares authorized under the 2023 Plan — Granted()  Exercised— () Canceled () Restricted stock units granted()— 
Restricted stock units canceled
 — Performance-based restricted stock units granted()— Performance-based restricted stock units canceled — 
Balance as of December 31, 2023
  $ $ 
Vested and Exercisable as of December 31, 2023
 $ $ 
(1)Effective as of January 1, 2021, 2022 and 2023, an additional  shares of common stock became available for issuance under the 2018 Plan, as a result of the operation of the automatic annual increase provision therein.
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million, $ million and $ million for the years ended December 31, 2023, 2022 and 2021, respectively.
The weighted-average grant date fair value of options granted was $, $ and $ per share for the years ended December 31, 2023, 2022 and 2021, respectively.
Future stock-based compensation for unvested options as of December 31, 2023 was $ million, which is expected to be recognized over a weighted-average period of years.
Restricted Stock Units
 $ Granted  Vested and released() Canceled() 
Balance as of December 31, 2021
  Granted Granted in connection with the Joint Venture Acquisition Vested and released() Canceled() 
Balance as of December 31, 2022
 Granted Vested and released() Canceled() 
Balance as of December 31, 2023
$ 
Future stock-based compensation for unvested restricted stock units as of December 31, 2023 was $ million, which is expected to be recognized over a weighted-average period of  years.
Performance-based Restricted Stock Units
Since November 2020, the Compensation Committee of the Board of Directors started to approve, and the Company started to grant performance-based restricted stock units, or PSUs, to its employees and non-employees. The PSUs granted to employees consist of financial and/or operational metrics to be met over a performance period of approximately to years and an additional service period requirement of up to years after the performance metrics are met. The PSUs granted to a consultant consistent of operational metrics to be met over a performance period of years. The PSUs are expected to be expensed over a period of approximately to years subject to meeting the respective performance metrics and service requirements.
In November 2020, and as part of these PSU programs, the Company granted PSUs consisting of a performance period of years combined with an additional service period requirement of should the vesting criteria be met. As of December 31, 2023, these PSUs had a grant-date fair value of approximately $ million, net of forfeitures, however compensation expense for these PSUs has been recorded to-date since the achievement of the performance metrics did not meet the criteria for accrual as of December 31, 2023.
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 $ Granted  Canceled() 
Balance as of December 31, 2021
  Granted  Canceled() 
Balance as of December 31, 2022
  Granted  Vested and released() Canceled() 
Balance as of December 31, 2023
$ 
Stock-based compensation recorded for the PSUs for the years ended December 31, 2023, 2022 and 2021 was $ million, $ million and $ million, respectively. Future stock-based compensation for unvested PSUs that are probable to vest as of December 31, 2023 was $ million, which is expected to be recognized over a weighted-average period of years.
Market-based Restricted Stock Units
In May 2020, the Board of Directors approved and granted market-based restricted stock units, or MSUs, under the 2018 Plan to each of the Company's Co-Chief Executive Officers, which is subject to the achievement of market-based share price goals established by the Board of Directors. The MSUs consist of separate tranches and the vesting of each tranche is subject to the Company's common stock closing price being maintained at or above a predetermined share price goal for a period of consecutive calendar days. The share price goal can be met any time during the performance period from the date of grant. Upon vesting, the MSUs must be held for a period of six to depending on the time of vesting within the performance period. The vesting of the MSUs can also be triggered upon a change in control event and achievement of a certain change in control price goal, or when there is a qualifying termination or in the event of death or disability. Any MSUs that remain unvested at the end of the performance period will automatically be forfeited and terminated without further consideration.
per shareTranche 2
$ per share
Tranche 3
$ per share
The grant date fair values of the MSUs were determined using a Monte Carlo valuation model for each tranche. The related stock-based compensation expense for each tranche was recognized based on an accelerated attribution method over the estimated derived service period. The derived service period was the median duration of the successful stock price paths to meet the price goal for each tranche as simulated in the Monte Carlo valuation model. The Monte Carlo valuation model used assumptions such as volatility, risk-free interest rate, cost of equity and dividend estimated for the performance period of the MSU. The weighted-average grant date fair value of the MSUs was $ per share and the weighted-average derived service period was estimated to be in the range of – years.
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per share was achieved for a period of consecutive calendar days. MSUs were granted, vested or canceled during the years ended December 31, 2023, and 2022.  $ Vested and released() 
Canceled (1)
() 
Balance as of December 31, 2021
  
Balance as of December 31, 2022
  
Balance as of December 31, 2023
 $ 
(1)Represented shares withheld by the Company for the holders' tax obligation upon release of vested MSUs.
The MSUs were fully expensed as of June 30, 2022. Stock-based compensation for the MSUs for the years ended December 31, 2022 and 2021 was $ million and $ million, respectively, which was recorded in general and administrative expenses on the accompanying consolidated statement of operations.
AMEA 2020 Equity Incentive Plan
In August 2020, the board of directors of the Joint Venture approved its 2020 Equity Incentive Plan, or the AMEA 2020 Plan, under which the Joint Venture may grant equity incentive awards to its employees and non-employees.
In June 2022, in connection with the Joint Venture Acquisition, the Company issued a tender offer to purchase the Joint Venture's Class B common stock issued and issuable upon exercise of vested Joint Venture's stock options, at a price of $ per share determined pursuant to an independent valuation. In July 2022, the Company settled the tender offer with the grantees for a total amount of $ million. In addition, in connection with the Joint Venture Acquisition, the unvested Joint Venture's stock options were cancelled and such grantees received replacement awards covering a number of shares of the Company's common stock. The replacement awards, valued at $ million, are subject to the same vesting schedule that applied to the unvested Joint Venture's stock option immediately prior to the close of the Joint Venture Acquisition transaction, to be recognized over a weighted-average period of years. The Company accounted for this as a modification which resulted in an immaterial incremental stock-based compensation expense. After the settlement of the tender offer in July 2022, the Company cancelled the AMEA 2020 Plan.
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$ $ Granted() Exercised—() Canceled() 
Balance as of December 31, 2021
  Exercised—() Canceled() Canceled in connection with the Joint Venture Acquisition()() 
Balance as of December 31, 2022
$ $ 
stock options were granted under the AMEA 2020 Plan for the year ended December 31, 2022. The weighted-average grant date fair value of options granted under the AMEA 2020 Plan was $ per share for the year ended December 31, 2021.
Stock‑Based Compensation Expense
 $ $ Cost of development services and other   
Research and development expense
   
Sales and marketing expense
   
General and administrative expense
   
Total stock-based compensation expense
$ $ $ 
Valuation of Stock Options
–
–
–
Expected volatility
% – %
% – %
% – %
Risk-free interest rate
% – %
% – %
% – %
Expected dividend yield
%
%
%
The determination of the fair value of stock options on the date of grant using a Black-Scholes option-pricing model is affected by the estimated fair value of common stock of the Company and the Joint Venture, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment to determine. The valuation assumptions were determined as follows:
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.
The Joint Venture did not anticipate paying any dividends, therefore used an expected dividend yield of zero.
2018 Employee Stock Purchase Plan
In September 2018, the Company’s Board of Directors adopted and its stockholders approved the 2018 Employee Stock Purchase Plan, or the ESPP. A total of shares of common stock were initially reserved for issuance under the ESPP. On the first day of each calendar year beginning on January 1, 2019 and ending on and including January 1, 2028, the number of shares of common stock available for issuance under the ESPP may be increased by the least of (i) shares, (ii) % of the shares outstanding (on an as-converted basis) on the last day of the immediately preceding calendar year, assuming the conversion of any shares of preferred stock, but excluding shares issuable upon the exercise or payment of stock options, warrants or other equity securities with respect to which shares have not actually been issued, and (iii) such smaller number of shares as determined by the Company’s Board of Directors. Effective as of January 1, 2020 and March 2, 2023, an additional  and shares of common stock became available for issuance under the ESPP.
Subject to any plan limitations, the ESPP allows eligible employees to contribute, normally through payroll deductions, up to % of their earnings for the purchase of the Company’s common stock at a discounted price per share. The price at which common stock is purchased under the ESPP is equal to % of the fair market value of the Company’s common stock on the first or last day of the offering period, whichever is lower. The ESPP provides for separate  offering periods beginning on May 15 and November 15 of each year.
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, and , for the years ended December 31, 2023, 2022 and 2021, respectively. The total compensation expense related to the ESPP was $ million, $ million and $ million, for the years ended December 31, 2023, 2022 and 2021, respectively.
Expected volatility
% – %
% – %
% – %
Risk-free interest rate
% – %
% – %
% – %
Expected dividend yield
%
%
%
As of December 31, 2023, the unrecognized stock-based compensation expense related to the ESPP was $ million, which is expected to be recognized over the remaining term of the offering period of years.
12.
)$()$()
Adjustment of redeemable noncontrolling interest
  ()
Net loss attributable to Guardant Health, Inc. common stockholders, basic and diluted
$()$()$()
Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted
$()$()$()
Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted
   
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   Restricted stock units   MSUs   PSUs   ESPP obligation   Common stock subject to repurchase   Convertible senior notes   Total   

13.
)$()$()Foreign   Total$()$()$()$$ Foreign 
Total current tax expense
$$$ 
Deferred:
Federal $$$ State Foreign()() 
Total deferred tax expense
$()$()$ 
Total provision for income taxes
$$$ 
135

 $ Capitalized research and development costs  Property, equipment and intangible assets  
Accruals and reserves
  
Research and development credits
  
Stock-based compensation
  
Lease liabilities
  
Other
  
Total deferred tax assets
$ $ Deferred tax liabilities:Right-of-use asset$()$()Equity security investments() Other()()
Total deferred tax liabilities
$()$()Less: valuation allowance()()Net deferred tax assets$ $     
)$()$()Capitalized research and expenditures true-up   Stock-based compensation   Research and development credits()()()Change in valuation allowance   
State taxes, net of federal benefits
()()()
Other
 () 
Total provision for income taxes
$ $ $ 
The Company’s actual tax expense differed from the statutory federal income tax expense using a tax rate of 21% for the years ended December 31, 2023, 2022 and 2021, primarily due to the change in valuation allowance, state income taxes net of federal benefits, withholding taxes, research and development tax credits, stock-based compensation expenses, and capitalized research and expenditures true-up.
As of December 31, 2023 and 2022, the Company had net operating loss carryforwards of $ billion and $ billion for federal purposes, and $ billion and $ billion for state and local purposes, respectively, which may be subject to limitations as described below. If not utilized, these carryforwards will begin to expire in 2031 for federal purposes, and 2024 for state and local purposes. Federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited. Some but not all states conform to the federal treatment of net operating losses.
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million, net of reserve of $ million, and $ million, net of reserve of $ million, respectively. As of December 31, 2022, the Company had federal and state research and development tax credit carryforwards of $ million and $ million, respectively. The federal research and development tax credit carryforwards will expire at various dates beginning in the year 2032. The Company’s state research and development tax credit carryforwards do not expire.
Utilization of the net operating loss, or NOL, carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of NOL carryforwards and credits before utilization. Current laws impose substantial restrictions on the utilization of NOL carryforwards and credits in the event of an “ownership change” within a three-year period as defined by the Internal Revenue Code Section 382, or Section 382. If there should be an ownership change, the Company’s ability to utilize its NOL carryforwards and credits could be limited. The Company has not performed a Section 382 analysis.
Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Due to the Company’s history of U.S. operating losses, the Company believes that the recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized and, accordingly, have provided a full valuation allowance against net U.S. deferred tax assets. The net change in total valuation allowance was an increase of $ million, an increase of $ million and an increase of $ million for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company considers the earnings of certain non-U.S. subsidiaries to be indefinitely reinvested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. The Company has not recorded a provision for deferred U.S. federal and state income tax expense and foreign withholding taxes on approximately $ million of undistributed earnings of foreign subsidiaries indefinitely reinvested outside the United States. If the foreign earnings are repatriated, the income tax provision would be adjusted in the period the earnings are determined to be no longer indefinitely reinvested outside the United States.
The Company has made an accounting policy election to treat Global Intangible Low-Taxed Income, or GILTI, taxes as a current period expense rather than including these amounts in the measurement of deferred taxes.
Uncertain Tax Positions
The Company records unrecognized tax benefits, where appropriate, for all uncertain income tax positions. The Company recorded unrecognized tax benefits for uncertain tax positions of $ million and $ million as of December 31, 2023 and 2022, respectively, which, if recognized, would not affect the effective income tax rate due to the valuation allowance that currently offsets the deferred tax assets.
 $ $ Increases related to current year’s tax positions   (Decreases) increases related to prior years’ tax positions()  Unrecognized tax benefits - End of period$ $ $ 
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. During the years ended December 31, 2023, 2022 and 2021, the Company recognized interest and penalties associated with unrecognized tax benefits. There are tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.
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14.
% of eligible compensation on a pre-tax basis. For the years ended December 31, 2023, 2022 and 2021, the Company contributed $ million, $ million and $ million, respectively, to match employee contributions as permitted by the plan. The Company pays the administrative costs for the plan.
15.
operating segment. The Company's chief operating decision makers are its Co-Chief Executive Officers, who review financial information presented on a consolidated basis for the purposes of making operating decisions, assessing financial performance and allocating resources. $ $ International   
Total revenue
$ $ $ 
% and %, respectively, of the Company’s long-lived assets and right-of-use assets are located in the United States.
16.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures
Our management, with the participation of our co-chief executive officers, or Co-CEOs, and chief financial officer, or CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our Co-CEOs and CFO have concluded that as of December 31, 2023, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such required information is accumulated and communicated to our management, including our Co-CEOs and CFO, as appropriate, to allow timely decisions regarding required disclosures.
Management report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our Co-CEOs and CFO, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of our assessment under the framework in the Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2023. The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by an independent registered public accounting firm, as stated in their report included in this section of this Annual Report on Form 10-K.
Changes in internal control
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred for the quarter ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations Over Internal Controls
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Management, including our Co-CEOs and CFO, do not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Guardant Health, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited the internal control over financial reporting of Guardant Health, Inc. and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 22, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
San Jose, California
February 22, 2024
Item 9B. Other Information.
During the fiscal quarter ended December 31, 2023, none of our directors or officers or a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item 10 of Form 10-K will be included in our 2024 Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for our 2024 Annual Meeting of Stockholders and is incorporated herein by reference. The 2024 Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates.
Item 11. Executive Compensation
The information required by this Item 11 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information required by this Item 14 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)    Documents filed as part of this report
(1)    All financial statements
See Index to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
(2)    Financial Statement Schedules
All financial statement schedules have been omitted since the required information was not applicable or was not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements or the accompanying notes.
(3)    Exhibits required by Item 601 of Regulation S-K
The exhibits listed in the following Index to Exhibits are filed, furnished or incorporated by reference as part of this Annual Report on Form 10-K.
141

INDEX TO EXHIBITS
Incorporated by Reference
Exhibit NumberExhibit DescriptionFormFile No.ExhibitFiling DateFiled/Furnished Herewith
3.18-K001-386833.110/9/2018
3.28-K001-386833.210/9/2018
4.110-K001-386834.13/2/2020
4.28-K001-386834.111/20/2020
10.1#S-1333-22720610.39/6/2018
10.1(a)#S-1333-22720610.49/6/2018
10.2#S-8333-22776299.2(a)10/10/2018
10.2(a)#S-1/A333-22720610.9(a)9/21/2018
10.2(b)#S-1/A333-22720610.9(b)9/21/2018
10.2(c)#S-1/A333-22720610.9(c)9/21/2018
10.2(d)#10-K001-3868310.3(d)2/25/2021
10.3#S-8333-22776299.310/10/2018
10.3(a)#10-K001-3868310.4(a)3/29/2019
10.4#10-Q001-3868310.18/3/2023
10.5#10-Q001-3868310.18/6/2020
10.6S-1/A333-22720610.89/18/2018
10.7S-1333-22720610.29/6/2018
10.8S-1333-22720610.2(a)9/6/2018
10.910-Q001-3868310.111/5/2020
10.10§S-1333-22720610.79/6/2018
10.11§S-1333-22720610.7(a)9/6/2018
10.12§S-1333-22720610.7(b)9/6/2018
10.13§S-1333-22720610.7(c)9/6/2018
10.14§S-1333-22720610.7(d)9/6/2018

142

Incorporated by Reference
Exhibit NumberExhibit DescriptionFormFile No.ExhibitFiling DateFiled/Furnished Herewith
10.15§10-K001-3868310.192/25/2021
10.16#10-K001-3868310.193/29/2019
10.17#8-K001-3868310.25/27/2020
10.188-K001-3868310.111/20/2020
10.19#10-Q001-3868310.111/6/2023
10.19(a)#10-Q001-3868310.211/6/2023
21.1*
23.1*
23.2*
24.1*
31.1*
31.2*
31.3*
32.1**
32.2**
32.3**
97.1*
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document*
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*

143

Incorporated by Reference
Exhibit NumberExhibit DescriptionFormFile No.ExhibitFiling DateFiled/Furnished Herewith
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)*
___________________________
*    Filed herewith.
**    Furnished herewith.
#    Indicates management contract or compensatory plan.
§    Portions of this exhibit (indicated by asterisks) have been omitted pursuant to, a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, or Item 601(a)(5) of Regulation S-K.

Item 16. Form 10-K Summary
None.

144
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GUARDANT HEALTH, INC.
Dated:February 22, 2024By:/s/ Helmy Eltoukhy
Name:Helmy Eltoukhy
Title:
Co-Chief Executive Officer and Chairman of the Board
By:/s/ AmirAli Talasaz
Name:
AmirAli Talasaz
Title:
Co-Chief Executive Officer and Director
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Helmy Eltoukhy and AmirAli Talasaz, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
145
Table of Contents
SignatureTitleDate
/s/ Helmy EltoukhyCo-Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)		February 22, 2024
Helmy Eltoukhy
/s/ AmirAli TalasazCo-Chief Executive Officer and Director
(Principal Executive Officer)		February 22, 2024
AmirAli Talasaz
/s/ Michael BellChief Financial Officer
(Principal Accounting Officer and Principal Financial Officer)		February 22, 2024
Michael Bell
/s/ Ian ClarkLead Independent DirectorFebruary 22, 2024
Ian Clark
/s/ Vijaya GaddeDirectorFebruary 22, 2024
Vijaya Gadde
/s/ Steve KrognesDirectorFebruary 22, 2024
Steve Krognes
/s/ Meghan JoyceDirectorFebruary 22, 2024
Meghan Joyce
/s/ Musa TariqDirectorFebruary 22, 2024
Musa Tariq
/s/ Myrtle PotterDirectorFebruary 22, 2024
Myrtle Potter
146

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