AtriCure, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ATRICURE, INC. AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS Page Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 47 Consolidated Balance Sheets 49 Consolidated Statements of Operations and Comprehensive Loss 50 Consolidated Statements of Stockholders’ Equity 51 Consolidated Statements of Cash Flows 52 Notes to Consolidated Financial Statements 53 46 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of AtriCure, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of AtriCure, Inc. and subsidiaries (the "Company") as of December 31, 2025 and December 31, 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 47 Table of Contents Valuation of Performance Shares - Refer to Note 14 to the financial statements Critical Audit Matter Description Performance share awards (Performance Shares) were granted in 2025 with a grant date fair value of $11,662. The Performance Shares vest based on the achievement of performance conditions and/or market conditions. The number of Performance Shares with a market condition that vest and are issued to the recipient is based upon the Company’s total shareholder return (TSR) relative to the TSR of the selected market index. A Monte Carlo simulation was performed to estimate the fair value of the awards with a market condition on the date of grant. The number of Performance Shares with a performance condition that vest and are issued to the recipient is measured, as defined in the award agreement, based on the Company’s revenue compound annual growth rate or Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) compound annual growth rate, at the end of the defined performance period as compared to target thresholds. The Company’s share-based compensation expense is recognized over the requisite service period as the employee renders service. The determination of fair value on the grant date is affected by the stock price of the Company and the market index, as defined by the award agreement, at the beginning of the service period and grant date, the expected stock price volatility of the Company and the market index over the performance period, the risk-free interest rate, and/or the correlation coefficient of the daily returns for the Company and the market index over the performance period. Given the level of judgment involved by management to determine the grant date fair value of the Performance Awards, including the use of a specialist for awards with a market condition, our audit procedures required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company's determination of the grant date fair value of the Performance Shares included the following, among others: • We inquired with management regarding the key valuation assumptions and the methodology used in the determination of the grant date fair value of the Performance Shares. • We tested the design and operating effectiveness of the Company's internal controls over the determination of the grant date fair value of the Performance Shares. • We tested the accuracy of the data used in measuring the awards by agreeing the underlying inputs, such as grant date, share price, and vesting conditions to source documents, such as compensation committee minutes or Performance Share agreements. • We evaluated management’s valuation of Performance Shares with a performance condition through testing of revenue growth and adjusted EBITDA growth assumptions over the defined performance period by comparing to the Company’s annual plan and external guidance. • With the assistance of our fair value specialists, we evaluated management's valuation of Performance Shares with a market condition by: ▪ Evaluating the Monte Carlo simulation methodology and the reasonableness of the valuation assumptions, including the risk-free interest rate, expected volatility, and the correlation coefficients. ▪ Independently calculating a fair value estimate for the market condition Performance Shares using the underlying agreement and independently calculated valuation inputs. /s/ Deloitte & Touche LLP Cincinnati, Ohio February 19, 2026 We have served as the Company's auditor since 2002. 48 Table of Contents ATRICURE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 and 2024 (In Thousands, Except Per Share Amounts) 2025 2024 Assets Current assets: Cash and cash equivalents $ 167,428 $ 122,721 Accounts receivable, less allowance for credit losses of $ 750 and $ 550 66,653 60,339 Inventories 78,492 75,335 Prepaid and other current assets 9,944 9,431 Total current assets 322,517 267,826 Property and equipment, net 39,123 41,659 Operating lease right-of-use assets 6,868 5,727 Intangible assets, net 48,026 56,467 Goodwill 234,781 234,781 Other noncurrent assets 2,864 2,868 Total Assets $ 654,179 $ 609,328 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 25,310 $ 25,032 Accrued liabilities 53,089 45,587 Other current liabilities 3,121 2,805 Total current liabilities 81,520 73,424 Long-term debt 61,865 61,865 Finance and operating lease liabilities 11,516 11,860 Other noncurrent liabilities 7,343 1,210 Total Liabilities 162,244 148,359 Commitments and contingencies (Note 10) Stockholders’ Equity: Common stock, $ 0.001 par value, 90,000 shares authorized; 49,792 and 48,869 issued and outstanding 50 49 Additional paid-in capital 904,522 863,710 Accumulated other comprehensive income (loss) 566 ( 1,035 ) Accumulated deficit ( 413,203 ) ( 401,755 ) Total Stockholders’ Equity 491,935 460,969 Total Liabilities and Stockholders’ Equity $ 654,179 $ 609,328 See accompanying notes to consolidated financial statements. 49 Table of Contents ATRICURE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS YEARS ENDED DECEMBER 31, 2025, 2024 and 2023 (In Thousands, Except Per Share Amounts) 2025 2024 2023 Revenue $ 534,528 $ 465,307 $ 399,245 Cost of revenue 133,749 117,783 98,875 Gross profit 400,779 347,524 300,370 Operating expenses: Research and development expenses 99,209 96,178 73,915 Selling, general and administrative expenses 311,017 291,359 253,138 Total operating expenses 410,226 387,537 327,053 Loss from operations ( 9,447 ) ( 40,013 ) ( 26,683 ) Other income (expense): Interest expense ( 5,878 ) ( 6,407 ) ( 6,925 ) Interest income 4,479 4,434 3,792 Loss on debt extinguishment — ( 1,362 ) — Other income (expense) 683 ( 326 ) ( 31 ) Loss before income tax expense ( 10,163 ) ( 43,674 ) ( 29,847 ) Income tax expense 1,285 1,024 591 Net loss $ ( 11,448 ) $ ( 44,698 ) $ ( 30,438 ) Net loss per share: Basic and diluted net loss per share $ ( 0.24 ) $ ( 0.95 ) $ ( 0.66 ) Weighted average shares outstanding - basic and diluted 47,750 46,965 46,309 Comprehensive income (loss): Unrealized gain on investments $ — $ 800 $ 2,898 Foreign currency translation adjustment 1,601 ( 842 ) 205 Other comprehensive income (loss) 1,601 ( 42 ) 3,103 Net loss ( 11,448 ) ( 44,698 ) ( 30,438 ) Comprehensive loss, net of tax $ ( 9,847 ) $ ( 44,740 ) $ ( 27,335 ) See accompanying notes to consolidated financial statements. 50 Table of Contents ATRICURE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY YEARS ENDED DECEMBER 31, 2025, 2024, and 2023 (In Thousands) Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Shares Amount Balance—December 31, 2022 46,563 $ 47 $ 787,422 $ ( 326,619 ) $ ( 4,096 ) $ 456,754 Issuance of common stock under equity incentive plans 811 1 ( 4,241 ) — — ( 4,240 ) Issuance of common stock under employee stock purchase plan 152 — 5,261 — — 5,261 Share-based employee compensation expense — — 35,728 — — 35,728 Other comprehensive income — — — — 3,103 3,103 Net loss — — — ( 30,438 ) — ( 30,438 ) Balance—December 31, 2023 47,526 $ 48 $ 824,170 $ ( 357,057 ) $ ( 993 ) $ 466,168 Issuance of common stock under equity incentive plans 1,080 1 ( 5,929 ) — — ( 5,928 ) Issuance of common stock under employee stock purchase plan 263 — 5,064 — — 5,064 Share-based employee compensation expense — — 40,405 — — 40,405 Other comprehensive loss — — — — ( 42 ) ( 42 ) Net loss — — — ( 44,698 ) — ( 44,698 ) Balance—December 31, 2024 48,869 $ 49 $ 863,710 $ ( 401,755 ) $ ( 1,035 ) $ 460,969 Issuance of common stock under equity incentive plans 699 1 ( 9,796 ) — — ( 9,795 ) Issuance of common stock under employee stock purchase plan 224 — 5,923 — — 5,923 Share-based employee compensation expense — — 44,685 — — 44,685 Other comprehensive income — — — — 1,601 1,601 Net loss — — — ( 11,448 ) — ( 11,448 ) Balance—December 31, 2025 49,792 $ 50 $ 904,522 $ ( 413,203 ) $ 566 $ 491,935 See accompanying notes to consolidated financial statements. 51 Table of Contents ATRICURE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2025, 2024 and 2023 (In Thousands) 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 11,448 ) $ ( 44,698 ) $ ( 30,438 ) Adjustments to reconcile net loss to net cash provided by operating activities: Share-based compensation expense 44,685 40,405 35,728 Depreciation 12,090 11,214 9,460 Amortization of intangible assets 8,441 7,519 5,353 Amortization of deferred financing costs 478 478 486 Amortization of investments — 107 632 Acquired in-process research and development expense 6,000 12,000 — Loss on debt extinguishment — 1,362 — Other non-cash adjustments 1,374 2,175 1,503 Changes in operating assets and liabilities: Accounts receivable ( 5,610 ) ( 8,301 ) ( 9,872 ) Inventories ( 2,256 ) ( 7,740 ) ( 21,830 ) Other current assets ( 328 ) ( 949 ) ( 3,084 ) Accounts payable ( 960 ) ( 1,531 ) 6,177 Accrued liabilities 6,997 1,199 11,562 Other noncurrent assets and liabilities ( 2,129 ) ( 1,036 ) ( 1,193 ) Net cash provided by operating activities 57,334 12,204 4,484 Cash flows from investing activities: Sales and maturities of available-for-sale securities — 53,668 63,815 Purchases of property and equipment ( 9,050 ) ( 11,459 ) ( 11,998 ) Proceeds from sale of property and equipment — 25 — Acquisitions, including in-process research and development ( 6,000 ) ( 12,000 ) ( 30,000 ) Proceeds from capital grant 500 — — Net cash (used in) provided by investing activities ( 14,550 ) 30,234 21,817 Cash flows from financing activities: Proceeds from revolving credit facility, net of financing costs — 61,210 — Payments on debt, leases and financing obligation ( 1,201 ) ( 62,879 ) ( 992 ) Proceeds from financing obligation 6,250 — — Payment of financing costs and bank fees — ( 1,069 ) ( 60 ) Proceeds from stock option exercises 1,367 1,022 2,316 Shares repurchased for payment of taxes on stock awards ( 11,163 ) ( 6,951 ) ( 6,557 ) Proceeds from issuance of common stock under employee stock purchase plan 5,923 5,064 5,261 Net cash provided by (used in) financing activities 1,176 ( 3,603 ) ( 32 ) Effect of exchange rate changes on cash and cash equivalents 747 ( 424 ) ( 58 ) Net increase in cash and cash equivalents 44,707 38,411 26,211 Cash and cash equivalents—beginning of period 122,721 84,310 58,099 Cash and cash equivalents—end of period $ 167,428 $ 122,721 $ 84,310 Supplemental cash flow information: Cash paid for interest $ 5,255 $ 5,951 $ 6,376 Cash paid for income taxes, net of refunds 1,290 619 395 Non-cash investing and financing activities: Accrued purchases of property and equipment 1,262 334 1,427 See accompanying notes to consolidated financial statements. 52 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business — AtriCure, Inc. (the “Company” or “AtriCure”) is a leading innovator in surgical treatments and therapies for atrial fibrillation, left atrial appendage management and post-operative pain management, and sells its products to medical centers globally through its direct sales force and distributors. Principles of Consolidation— The Consolidated Financial Statements include the accounts of AtriCure, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents— The Company considers highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. Cash equivalents include demand deposits and money market funds with financial institutions. Investments— The Company invests primarily in government and agency obligations, corporate bonds, commercial paper and asset-backed securities and classifies all investments as available-for-sale. Investments maturing in less than one year are classified as short-term investments. Investments are recorded at fair value, with unrealized gains and losses recorded as accumulated other comprehensive income (loss). Gains and losses are recognized using the specific identification method when securities are sold and are included in interest income. The Company had no investments as of December 31, 2025 and 2024. The gross realized gains or losses from sales of available-for-sale investments were not significant in the years ended December 31, 2025, 2024 and 2023. Revenue Recognition — Revenue is generated primarily from the sale of medical devices. Sales of devices are categorized based on the type of product as follows: open ablation, minimally invasive ablation, pain management and appendage management. The Company recognizes revenue when control of promised devices is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those devices. Revenue is recognized at a point in time upon shipment or delivery of products. Shipping and handling activities performed after control transfers to customers are considered activities to fulfill the promise to transfer the products. Revenue includes shipping and handling revenue of $ 2,451 , $ 2,421 and $ 1,860 in the years ended December 31, 2025, 2024 and 2023. Products are sold primarily through a direct sales force and through distributors in certain international markets. Terms of sale are generally consistent for both end-users and distributors, except that payment terms are generally net 30 days for end-users and net 60 days for distributors, with some exceptions. The Company does not maintain any post-shipping obligations to customers; no installation, calibration or testing of products is performed subsequent to shipment in order to render products operational. The Company expects to be entitled to the total consideration for the products ordered as product pricing is fixed, and there are no adjustments for a significant financing component as payment terms fall within one year . The Company excludes taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price. Costs associated with product sales include commission expense for product sales and royalties paid for sales of certain products. As revenue from product sales are satisfied at a point in time, commission expense and royalties are incurred at that point in time rather than over time. Commissions are included in selling, general and administrative expenses, while royalties are included in cost of revenue. Significant judgments and estimates involved in the Company’s recognition of revenue include the estimation of a provision for returns. In the normal course of business, the Company is not obligated to accept product returns unless a product is defective as manufactured. The Company does not provide customers with the right to a refund. Sales Returns and Allowances — The Company maintains a provision for potential returns of defective or damaged products, and invoice adjustments. The Company adjusts the provision using the expected value method based on historical experience. Increases to the provision reduce revenue, and the provision is included in accrued liabilities. Allowance for Credit Losses on Accounts Receivable —The Company evaluates expected credit losses on accounts receivable, considering historical credit losses, current customer-specific information and other relevant factors when determining the allowance. An increase to the allowance for credit losses results in a corresponding increase in selling, general and administrative expenses. The Company charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. The Company’s history of write-offs has not been significant. Recoveries are 53 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) recognized when received as a reduction to the allowance for credit losses by decreasing bad debt expense. The following table provides a reconciliation of the changes in the allowance for estimated accounts receivable credit losses for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 2024 2023 Beginning balance - January 1 $ 550 $ 500 $ 230 Provision for expected credit losses 200 50 270 Recovery — — — Ending balance - December 31 $ 750 $ 550 $ 500 Concentration Risk — During 2025, 2024 and 2023, 8.7 %, 8.9 % and 8.8 % of the Company’s total revenue was derived from its top ten customers. As of December 31, 2025 and 2024, 13.7 % and 10.4 % of the Company’s total accounts receivable were derived from its top ten customers. No individual customer accounted for more than 10% of the Company’s accounts receivable as of December 31, 2025 and 2024. The Company is dependent on third-party suppliers, in some cases single-source suppliers. Inventories— Inventories are stated at the lower of cost or net realizable value based on the first-in, first-out cost method (FIFO) and consist of raw materials, work in process and finished goods. The Company’s industry is characterized by rapid product development and frequent new product introductions. Uncertain timing of regulatory approvals, variability in product launch strategies and variation in product sales all impact inventory reserves for excess, obsolete and expired products. An increase to inventory reserves results in a corresponding increase in cost of revenue. Inventories are written off against the reserve when they are physically disposed. Property and Equipment— Property and equipment are stated at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful life. The estimated useful life of leasehold improvements is the shorter of the estimated life or the lease term. The estimated useful lives of buildings is 15 to 20 years, while furniture, fixtures, computers and office equipment are depreciated from three to seven years . The Company’s RF and cryo generators are generally placed with customers that purchase the Company’s disposable products. The estimated useful lives of generators are based on anticipated usage by customers and may change in future periods with changes in usage or introduction of new technology. Depreciation related to generators is recorded in cost of revenue over three years . Maintenance and repair costs are expensed as incurred. The Company assesses the useful lives of property and equipment at least annually and retires assets no longer in use. Contingent Consideration— Contingent consideration arrangements obligate the Company to pay certain amounts if specified future events occur or conditions are met, such as the achievement of certain developmental, commercial or regulatory milestones. Contingent consideration obligations incurred in connection with a business combination are recorded at fair value on acquisition date and periodically measured, with changes in the estimated fair value reflected in operating expense. Contingent consideration arrangements arising from asset acquisitions are recorded within operating expenses at the time milestone results are achieved. Intangible Assets— Technology intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated fifteen year period benefited. Patent intangible assets with determinable useful lives are amortized over the estimated useful life of five years in a pattern reflecting their estimated economic benefit to the Company. Amortization of technology intangible assets is recorded in research and development expense, while amortization of patent intangible assets is recorded in cost of revenue. The Company reviews intangible assets for impairment if impairment indicators are present using its best estimates based on reasonable and supportable assumptions and projections. Goodwill— Goodwill represents the excess of purchase price over the fair value of the net assets acquired in business combinations. The Company’s goodwill is accounted for in a single reporting unit representing the Company as a whole. The Company performs impairment testing annually on October 1 or more often if impairment indicators are present. Long-lived Assets— The Company reviews property and equipment and intangible assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset's carrying value. 54 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) Leases —The Company leases office, manufacturing and warehouse facilities and automobiles under leases that qualify as either financing or operating leases, as determined at the inception of the lease arrangement. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make payments under the lease. Lease assets and liabilities are measured and recorded at the commencement date based on the present value of payments over the lease term. Lease assets and liabilities include lease incentives and options to extend or terminate when it is reasonably certain the Company will exercise that option. The Company uses the implicit rate when readily determinable; however, as most leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate. The Company also applies the short-term lease recognition exemption, recognizing lease payments in profit or loss, for lease terms of 12 months or less at commencement and with no option to extend the lease whose exercise is reasonably certain. The Company accounts for the lease and non-lease components as a single lease component. Additionally, the portfolio approach is applied for operating leases based on the terms of the underlying leases. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities, while finance leases are included in property and equipment and finance lease liabilities. The short-term portions of lease liabilities are included in other current liabilities and current maturities of debt and leases. Operating lease expense is recognized on a straight-line basis over the lease term. See Note 9 – Leases for further discussion. Sale-and-Leaseback Transaction —Sale-and-leaseback transactions occur when a company sells assets to a third party and simultaneously leases them back. The Company assesses the contract to identify if a sale occurred via transfer of control of the assets. In cases where control has not transferred, the Company continues to recognize the underlying asset within Property and equipment, net within the consolidated balance sheets, which is then depreciated over the shorter of the remaining useful life or lease term. Additionally, a financial liability is recognized and referred to as a financing obligation and is accounted for similarly to debt or finance leases. Payments are recognized as a reduction of the financing obligation and interest expense using the effective interest method. During the year ended December 31, 2025, the Company entered into one failed sale-and-leaseback transaction. See additional discussion in Note 8 – Borrowings and Financing Obligation. Other Income (Expense)— Other income (expense) consists primarily of foreign currency transaction gains and losses generated by settlements of intercompany balances denominated in Euros and customer invoices transacted in British Pounds, Australian Dollars and Canadian Dollars. Income Taxes —Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases along with operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities from a change in tax rates is recognized in the period that includes the enactment date. The Company’s estimate of the valuation allowance for deferred income tax assets requires significant estimates and judgments about future operating results. Deferred income tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more-likely-than-not that a deferred income tax asset will not be realized. Significant weight is given to evidence that can be objectively verified. The Company evaluates deferred income tax assets on an annual basis to determine if valuation allowances are required by considering all available evidence. Deferred income tax assets are realized by having sufficient future taxable income to allow the related tax benefits to reduce taxes otherwise payable. The sources of taxable income that may be available to realize the benefit of deferred income tax assets are future taxable income, future reversals of existing taxable temporary differences, taxable income in prior carryforward years and tax planning strategies that are both prudent and feasible. In evaluating the need for a valuation allowance, the existence of cumulative losses in recent years is significant objectively-verifiable negative evidence that must be overcome by objectively-verifiable positive evidence to avoid the need for a valuation allowance. The Company's valuation allowance offsets substantially all net deferred income tax assets as it is more-likely-than-not that the benefit of the deferred income tax assets will not be recognized in future periods. The Company has not reclassified income tax effects of the Tax Cuts and Jobs Act within accumulated other comprehensive (loss) income to retained earnings due to its full valuation allowance. Net Loss Per Share —Basic and diluted net loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Since the Company has 55 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) experienced net losses for all periods presented, net loss per share excludes the effect of 2,621 , 2,583 and 1,668 stock options, restricted stock awards, restricted stock units, performance share awards, and performance share units as of December 31, 2025, 2024 and 2023 because they are anti-dilutive. Therefore, the number of shares calculated for basic net loss per share is also used for the diluted net loss per share calculation. Research and Development Costs — Research and development costs include compensation and other internal and external costs associated with the development and research of new and existing products or concepts, preclinical studies, clinical trials and studies, related regulatory activities, acquired in-process research and development (IPR&D), as well as amortization of technology assets. Research and development costs are expensed as incurred. Clinical trial costs and other development costs incurred by third parties are expensed as contracted work is performed or over the expected service period. Acquired IPR&D expenses reflect the costs of externally developed IPR&D projects acquired in an asset acquisition that do not have an alternative future use. Acquired IPR&D is expensed on the acquisition date and future expenses to develop the IPR&D projects are recorded in research and development expense as incurred. Milestone payments made to third parties in connection with asset acquisitions are expensed as incurred up to the point of regulatory approval. Advertising Costs — The Company expenses advertising costs as incurred. Advertising expense was $ 2,229 , $ 2,817 and $ 1,695 during the years ended December 31, 2025, 2024 and 2023. Share-Based Compensation— The Company recognizes share-based compensation expense for all share-based payment awards, including stock options, restricted stock awards, restricted stock units, performance share awards (PSAs), performance share units (PSUs) and stock purchases related to an employee stock purchase plan, based on estimated fair values. The value of the portion of an award that is ultimately expected to vest is recognized as expense over the service period. The Company estimates the fair value of PSAs with a performance condition based on the closing stock price on the date of grant assuming the performance target will be achieved and may adjust expense over the performance period based on changes to estimates of performance target achievement. If such targets are not met or service is not rendered for the requisite service period, no compensation cost is recognized, and any recognized compensation cost in prior periods will be reversed. For PSAs and PSUs with a market condition, a Monte Carlo simulation is performed to estimate the fair value on the date of grant, and compensation cost is recognized over the requisite service period as the employee renders service, even if the market condition is not satisfied. The Company’s determination of the fair value is affected by the Company and market index stock performance, as defined by the award agreement, at the beginning of the service period and grant date; the expected volatility of the Company and market index stock performance over the performance period and the correlation coefficient of the daily returns for the Company and market index over the performance period. The Company estimates the fair value of restricted stock awards and restricted stock units based upon the grant date closing market price of the Company’s common stock. The Company estimates the fair value of time-based options on the date of grant using the Black-Scholes option-pricing model (Black-Scholes model). The Company’s determination of the fair value is affected by the Company’s stock price as well as several subjective assumptions, such as the Company’s expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. The Company also has an employee stock purchase plan (ESPP) covering substantially all U.S. employees. Under the ESPP, shares of the Company’s common stock may be purchased at a discount. The Company estimates the number of shares to be purchased under the ESPP at the beginning of each purchase period based upon the fair value of the stock at the beginning of the purchase period using the Black-Scholes model and records estimated compensation expense during the purchase period. Expense is adjusted at the time of stock purchase. Use of Estimates— The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires estimates and assumptions that affect the reported amounts of assets and liabilities, including intangible assets, contingent assets and liabilities and the reported amounts of revenue and expense during the reporting period. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results could differ from those estimates. Segments —The Company evaluates reporting segments in accordance with FASB ASC 280, “Segment Reporting”. The chief operating decision maker for the Company is the Chief Executive Officer. The Company has one business 56 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) activity and operates as one operating segment: the development, manufacture, and sale of devices used in surgical procedures, designed primarily for the surgical ablation of cardiac tissue, the exclusion of the left atrial appendage, and to block pain by temporarily ablating peripheral nerves. These devices are developed and marketed to a broad base of medical centers globally. Management considers all such sales to be part of the single operating segment. The Chief Executive Officer is regularly provided with consolidated expenses consistent with the presented consolidated statements of operations, accompanied by information about revenue by product type and geographic area, for purposes of allocating resources and net loss is the measure used in evaluating financial performance. Revenue by product type and geographic area is included at Note 11 - Revenue. The Company’s long-lived assets are located in the United States, except for $ 6,292 as of December 31, 2025 and $ 4,021 as of December 31, 2024 located primarily in Europe. Fair Value Disclosures —The Company classifies cash equivalents, investments in U.S. government and agency obligations, accounts receivable, other current assets, and accounts payable as Level 1. The carrying amounts of these assets and liabilities approximate their fair value due to their relatively short-term nature. Investments in corporate bonds, commercial paper and asset-backed securities are classified as Level 2 within the fair value hierarchy. The fair value of fixed term debt is estimated by calculating the net present value of future debt payments at current market interest rates and is classified as Level 2. The book value of the Company’s fixed term debt approximates its fair value because the interest rate varies with market rates. Significant unobservable inputs with respect to the fair value measurements of the Level 3 contingent consideration liabilities are developed using Company data. See Note 2 – Fair Value for further information on fair value measurements. Recent Accounting Pronouncements —In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. This guidance requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting this standard on its consolidated financial statements and disclosures. In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. This amendment modernizes and makes targeted improvements to the accounting for software costs found under Topic 350-40, effective for fiscal years and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting this standard on its consolidated financial statements and disclosures. In December 2025, the FASB issued ASU 2025-10, "Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities". This amendment establishes authoritative guidance on the accounting for government grants received by business entities, effective for fiscal years and interim periods beginning after December 15, 2028, with early adoption permitted. The Company is evaluating the impact of adopting this standard on its consolidated financial statements and disclosures. 2. FAIR VALUE FASB ASC 820, “Fair Value Measurements and Disclosures”, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The valuation technique for the Company’s Level 2 assets is based on quoted market prices for similar assets from observable pricing sources at the reporting date. 57 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Assets: Money market funds $ 156,491 $ — $ — $ 156,491 Total assets $ 156,491 $ — $ — $ 156,491 The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2024: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Assets: Money market funds $ 101,147 $ — $ — $ 101,147 Total assets $ 101,147 $ — $ — $ 101,147 There were no changes in the levels or methodology of measurement of financial assets and liabilities during the year ended December 31, 2025. The estimated fair value of money market funds transferred from a Level 2 fair value measurement to a Level 1 fair value measurement during the year ended December 31, 2024. Contingent Consideration-Business Combination. The Company's contingent consideration arrangements arising from the SentreHEART acquisition obligate the Company to pay certain defined amounts to former shareholders of SentreHEART if specified milestones are met related to the aMAZE IDE clinical trial, including PMA approval and reimbursement for the therapy involving SentreHEART's devices. The PMA approval milestone expired on December 31, 2023, while the achievement period for the reimbursement milestone expires on December 31, 2026. The contingent consideration liability is measured by applying the probability weighted scenario method using unobservable inputs, thus representing a Level 3 measurement within the fair value hierarchy. The Company continues to assess the projected probability of payment during the contractual achievement periods to be remote, resulting in no reported fair value as of December 31, 2025 and 2024. The Company had no Level 3 fair value measurements using significant other unobservable inputs for contingent consideration in the years ended December 31, 2025, 2024 and 2023. 3. ASSET ACQUISITION On October 15, 2024, the Company entered into an exclusive licensing agreement (Cooperation Agreement) to co-develop and commercialize equipment incorporating pulsed field ablation (PFA) technology. The Company paid cash of $ 12,000 for the exclusive license of related intellectual property. The transaction was accounted for as an asset acquisition, 58 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) resulting in acquired in-process research and development (IPR&D). The acquired IPR&D was expensed to research and development expense as the Company determined there was no alternative future use of the technologies acquired. The Cooperation Agreement also requires the Company to pay additional contingent consideration, settled in cash, with a maximum payout of $ 28,000 if all milestones are achieved successfully within the ten-year term as follows: • Development Milestones - $ 3,000 to $ 15,000 for successful delivery of equipment for defined purposes at multiple dates within the first two years of the contract and is reduced for calendar days lapsed from delivery dates at specified rates. • Regulatory Approval Milestone - up to $ 13,000 for First Market Authorization in the United States, as defined in the Cooperation Agreement. The contingent consideration will be expensed when each milestone becomes payable as a result of achievement. Milestone payments made under this agreement were $ 6,000 for the year ended December 31, 2025 and included as a component of research and development expense. During the year ended December 31, 2024, no milestones were achieved resulting in no financial impact to the Company. The agreement also contains provisions requiring future royalty payments on devices incorporating co-developed technology upon commercialization. 4. INTANGIBLE ASSETS AND GOODWILL The following table provides a summary of the Company’s intangible assets at December 31: 2025 2024 Cost Accumulated Amortization Cost Accumulated Amortization Technology $ 46,470 $ 16,144 $ 46,470 $ 13,103 Patents 30,000 12,300 30,000 6,900 Total $ 76,470 $ 28,444 $ 76,470 $ 20,003 Amortization expense of intangible assets was $ 8,441 , $ 7,519 and $ 5,353 for the years ended December 31, 2025, 2024 and 2023. The following table summarizes the allocation of amortization expense of intangible assets: 2025 2024 2023 Cost of revenue $ 5,400 $ 4,500 $ 2,400 Research and development expenses 3,041 3,019 2,953 Total $ 8,441 $ 7,519 $ 5,353 59 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) Future amortization expense is projected as follows: 2026 $ 9,535 2027 10,435 2028 6,535 2029 2,935 2030 2,935 2031 and thereafter 15,651 Total $ 48,026 The following table provides a summary of the Company’s goodwill, which is not amortized, but rather tested annually for impairment: Net carrying amount as of December 31, 2023 $ 234,781 Additions (Impairment) — Net carrying amount as of December 31, 2024 234,781 Additions (Impairment) — Net carrying amount as of December 31, 2025 $ 234,781 5. INVENTORIES Inventories consisted of the following at December 31: 2025 2024 Raw materials $ 39,052 $ 37,703 Work in process 3,759 3,604 Finished goods 35,681 34,028 Inventories $ 78,492 $ 75,335 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31: 2025 2024 Buildings and improvements $ 28,915 $ 29,309 Generators 27,396 25,687 Machinery and office equipment 35,511 31,321 Computer equipment and software 10,767 11,300 Construction in progress 5,042 4,331 Land 1,258 1,006 Total 108,889 102,954 Less accumulated depreciation ( 69,766 ) ( 61,295 ) Property and equipment, net $ 39,123 $ 41,659 Depreciation expense was $ 12,090 , $ 11,214 and $ 9,460 for the years ended December 31, 2025, 2024 and 2023. As of December 31, 2025 and 2024, the net carrying value of generators was $ 3,992 and $ 4,620 . 60 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) 7. ACCRUED LIABILITIES Accrued liabilities consisted of the following at December 31: 2025 2024 Accrued compensation and employee-related expenses $ 46,760 $ 39,505 Sales returns and allowances 3,476 3,123 Other accrued liabilities 2,853 2,959 Total $ 53,089 $ 45,587 8. BORROWINGS AND FINANCING OBLIGATION Asset backed revolving credit facility. The Company has an asset-based credit agreement (Credit Agreement) among the Borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as bookrunner and lead arranger (JPMCB), and Silicon Valley Bank, a Division of First-Citizen Bank & Trust Company, as Joint Lead Arrangers and Joint Bookrunners, and the lenders party thereto (Lenders). The Credit Agreement provides for an asset based revolving credit facility (ABL Facility) in an amount of up to $ 125,000 . The Company may request an increase in the revolving commitment by up to $ 40,000 (not to exceed a total of $ 165,000 ). Borrowing availability under the ABL Facility is based on the lesser of $ 125,000 or a borrowing base calculation as defined by the Credit Agreement. A portion of the ABL Facility, limited to $ 5,000 , is available for the issuance of letters of credit by JPMCB or other financial institutions. JPMCB in its sole discretion, may create swingline loans by advancing floating rate revolving loans requested. Any such swingline loans will reduce availability under the ABL Facility on a dollar-for-dollar basis. At the initial closing, the Company borrowed $ 61,865 . The proceeds of the ABL Facility were used to terminate the Company’s outstanding indebtedness and final fee under its then-existing Loan and Security Agreement with Silicon Valley Bank (SVB Loan Agreement). Certain prepayment and early termination fees under the SVB Loan Agreement were waived at termination. The SVB Loan Agreement terminated on January 5, 2024 and was treated as a debt extinguishment. The resulting loss on debt extinguishment is $ 1,362 . Through January 2025, the Company's required minimum utilization of the ABL facility was 40 % of the aggregate revolving commitment or $ 50,000 . This minimum utilization requirement was removed in connection with the First Amendment to Credit Agreement (as further described below). Subject to customary exceptions and restrictions, the Company may voluntarily prepay outstanding amounts under the ABL Facility at any time thereafter without premium or penalty. Any voluntary prepayments made will not reduce commitments under the ABL Facility. The Credit Agreement contains mandatory prepayment provisions which require prepayment of amounts outstanding under the ABL Facility upon specified events or Availability shortfall. The ABL facility is subject to a commitment fee of 0.37 % per annum of the daily available revolving commitment and paid on a quarterly basis. Outstanding amounts under the Credit Agreement bear interest at a rate per annum equal to, at the Company's election: (i) an alternate base rate (ABR) plus an applicable margin or (ii) an adjusted term secured overnight financing rate (SOFR) plus an applicable margin. All swingline loans bear interest at a rate per annum equal to the ABR plus the applicable margin under the Credit Agreement. Alternate base rate is equal to the greatest of Prime, the NYFRB Rate plus 0.50 % and Adjusted Term SOFR Rate plus 1.00 %. The applicable margin on borrowings will adjust ranging from 1.50 % to 1.75 % per annum for ABR borrowings and from 2.50 % to 2.75 % per annum for SOFR term borrowings determined by the average historical excess availability. Participation and fronting fees are accrued and paid on a quarterly basis. As of December 31, 2025, the effective interest rate on the ABL Facility was 6.59 %. The ABL Facility is secured by the assets of the Company, consisting of personal, tangible or intangible property, including certain outstanding equity interests of the Company’s direct subsidiaries, subject to limitations specified in the Credit Agreement. The Credit Agreement contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including but not limited to financial covenants relating to a fixed charge coverage ratio and a minimum excess availability requirement, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, specified agreements, restricted payments and prepayment of certain indebtedness. 61 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) First Amendment to Credit Agreement. On January 9, 2026, the Company entered into a First Amendment to Credit Agreement (First Amendment). The First Amendment provides a three-year extension of the term of the Credit Agreement, and all outstanding borrowings are due upon maturity of the Credit Agreement on January 9, 2029. The First Amendment provides for a reduction in the overall interest rate on the loans under the ABL Facility. The applicable margin on borrowings will adjust ranging from 1.25 % to 1.50 % per annum for ABR borrowings and from 2.25 % to 2.50 % per annum for SOFR term borrowings determined by the average historical excess availability. The First Amendment removes the minimum utilization financial covenant in addition to certain other loan administration updates. At the time of closing, the Company paid down $ 865 of borrowings and had $ 62,750 available borrowing capacity under the ABL Facility. The First Amendment was treated as a debt modification. Borrowings outstanding under the existing Credit Agreement have been classified as long-term in the Consolidated Balance Sheet as of December 31, 2025. Future maturities of debt, after consideration of the First Amendment to Credit Agreement on January 9, 2026, are projected as follows: 2026 $ — 2027 — 2028 — 2029 61,000 2030 — Total long-term debt, of which $ 61,000 is noncurrent. $ 61,000 Financing obligation. In August 2025, the Company transferred legal ownership of a building and certain real property on its corporate headquarters campus in Mason, Ohio for cash consideration of $ 6,250 . Simultaneously, the Company entered into a contract to lease back the existing building and real property, as well as the planned building expansion space from the buyer-lessor. The buyer-lessor is financing the development and construction of the expansion of additional manufacturing and office space. During construction of the expansion, the Company will maintain occupancy and pay rent for the existing building. Upon construction completion, the expanded premises will be leased for fifteen years with three five-year options to renew. Annual rental payments will be calculated at an amount equal to 8 % of the construction costs and will escalate 3 % annually. Rental payments will be allocated between the existing and the expanded property based on the relative fair value upon construction completion. Expansion rental payments are projected to be $ 38,469 for the fifteen year lease term expected to begin during 2026. The classification of the lease related to the expansion will be assessed upon completion of construction. Rental payments will be finalized upon completion of the expansion construction. Estimated rental payments for the expansion over the next five annual periods are as follows: 2026 $ 1,034 2027 2,099 2028 2,162 2029 2,227 2030 2,294 The lease of the existing building and certain real property sold is a failed sale-and-leaseback as a result of finance lease classification. The Company established a financing obligation equal to the $ 6,250 cash proceeds received. The Company allocated projected rental payments during the term of construction and fifteen-year lease term based on the estimated fair value of the existing real property assets and future expansion. The company imputes interest monthly at a 62 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) rate of 6.76 %. During the year ended December 31, 2025, interest expense was not significant. Future maturities of the financing obligation are projected as follows: 2026 $ 81 2027 128 2028 152 2029 180 2030 209 2031 and thereafter 5,485 Total long-term financing obligation, of which $ 81 is current $ 6,235 The financing obligation is included in Other current liabilities and Other noncurrent liabilities on the Condensed Consolidated Balance Sheet. 9. LEASES The Company has operating and finance leases for office, manufacturing and warehouse facilities and automobiles. The Company’s leases have remaining lease terms of one to ten years . Options to renew or extend leases beyond their initial term have been excluded from measurement of the ROU assets and lease liabilities as exercise is not reasonably certain. The weighted average remaining lease term and the discount rate for the reporting periods are as follows: As of As of As of December 31, 2025 December 31, 2024 December 31, 2023 Operating Leases Weighted average remaining lease term (years) 5.1 4.4 4.8 Weighted average discount rate 7.0 % 6.9 % 5.8 % Finance Leases Weighted average remaining lease term (years) 4.7 5.7 6.7 Weighted average discount rate 7.0 % 7.0 % 6.9 % A letter of credit for $ 1,250 was issued to the lessor of the Company's corporate headquarters building at inception of the lease and is renewed annually and remains outstanding as of December 31, 2025. The components of lease expense are as follows: Year Ended Year Ended Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Operating lease cost $ 1,981 $ 1,614 $ 1,284 Finance lease cost: Amortization of right-of-use assets 1,047 1,047 1,020 Interest on lease liabilities 557 626 673 Total finance lease cost $ 1,604 $ 1,673 $ 1,693 Short term lease expense was not significant for the years ended December 31, 2025, 2024 and 2023. 63 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) Supplemental cash flow information related to leases was as follows: Year Ended Year Ended Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,053 $ 1,486 $ 1,235 Operating cash flows for finance leases 557 626 673 Financing cash flows for finance leases 1,186 1,056 992 Right-of-use assets obtained in exchange for lease obligations: Operating Leases 2,474 2,765 1,509 Finance Leases — 421 — Supplemental balance sheet information related to leases was as follows: As of December 31, 2025 As of December 31, 2024 Operating Leases Operating lease right-of-use assets $ 6,868 $ 5,727 Current lease liabilities 1,734 1,619 Operating lease liabilities 5,541 4,579 Total operating lease liabilities $ 7,275 $ 6,198 Finance Leases Property and equipment, at cost $ 14,765 $ 14,765 Accumulated depreciation ( 9,922 ) ( 8,875 ) Property and equipment, net $ 4,843 $ 5,890 Current lease liabilities $ 1,306 $ 1,186 Finance lease liabilities 5,975 7,281 Total finance lease liabilities $ 7,281 $ 8,467 Maturities of lease liabilities as of December 31, 2025 were as follows: Operating Leases Finance Leases 2026 $ 1,957 $ 1,775 2027 1,905 1,808 2028 1,475 1,842 2029 1,072 1,818 2030 683 1,339 2031 and thereafter 1,748 — Total payments $ 8,840 $ 8,582 Less imputed interest ( 1,565 ) ( 1,301 ) Total lease liabilities $ 7,275 $ 7,281 64 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) 10. COMMITMENTS AND CONTINGENCIES License Agreements. In 2024, the Company entered into an exclusive licensing agreement (Cooperation Agreement) to co-develop and commercialize equipment incorporating pulsed field ablation (PFA) technology. The Company paid cash of $ 12,000 for the exclusive license of related intellectual property. The Cooperation Agreement also requires the Company to pay additional contingent consideration, settled in cash, with a maximum payout of $ 28,000 if all milestones are achieved successfully within the ten-year term. The agreement contains provisions requiring future royalty payments on devices incorporating co-developed technology upon commercialization. See Note 3 – Asset Acquisition for further information. The Company had been party to a license agreement that required payments of 5 % of specified product sales. In May 2023, the Company entered into an agreement that terminated the license agreement and the Company's obligations to make royalty payments. The Company made a one-time payment of $ 33,400 for the acquisition of patents and other intellectual property. The amount paid, together with transaction costs, was allocated between the acquired intangible asset, the release of payment for royalty obligations and legal expenses. The intangible asset was assigned a value of $ 30,000 and is being amortized over an estimated useful life of 5 years. There was no royalty expense for the years ended December 31, 2025 and 2024. Royalty expense was $ 1,333 for the year ended December 31, 2023. Purchase Commitments. The Company enters into various purchase arrangements related to its manufacturing and research and development activities. In the ordinary course of business, these agreements generally include terms that allow cancellation. In 2022, the Company entered into a clinical trial management agreement for the LeAAPS clinical trial. The terms of the agreement require payments upon achievement of various enrollment and project milestones over the estimated ten-year term, yet the agreement may be terminated early for any reason. Furthermore, the Company incurs additional variable costs, including pass through costs from clinical trial sites. Payments made under this agreement were $ 13,379 , $ 12,471 , and $ 5,636 for the years ended December 31, 2025, 2024, and 2023. In August 2025, the Company entered into a non-cancellable cloud computing arrangement with a term of seven years requiring total payments of $ 3,616 . Payments under this agreement will begin March 2026. Legal. The Company may, from time to time, become a party to legal proceedings which are subject to many uncertainties. Litigation and administrative proceedings over patent and other intellectual property rights are common in our industry, as are requests for information related to interactions with medical professionals. Accordingly, the financial impact of ultimate resolutions from legal proceedings may not be known for extended periods of time and are not predictable with assurance. A liability is established once management determines a loss is probable and an amount can be reasonably estimated. The Company recognizes income from a favorable resolution of legal proceedings when the associated cash or assets are received. On February 7, 2025, the representative for former securityholders of SentreHEART, Inc. filed a complaint in the Delaware Court of Chancery naming the Company as a defendant, and on May 23, 2025 filed a first amended complaint. The Company acquired SentreHEART, Inc. pursuant to a merger agreement dated August 11, 2019. The merger agreement provides for contingent consideration to be paid upon achievement of specified PMA and CPT reimbursement milestones by specified dates. The amended complaint alleges breach of contract and a related claim for breach of the implied covenant of good faith and fair dealing resulting from the Company's alleged failure to use commercially reasonable efforts to obtain premarket approval from FDA for the LARIAT System. The amended complaint seeks damages in the amount of the original PMA and CPT reimbursement milestones of up to $ 260,000 plus interest. The Company intends to vigorously defend this claim. A liability has not been recognized related to this matter because any potential loss is not currently probable or reasonably estimable. During the first quarter of 2023, the Company entered into a legal settlement of $ 7,500 in connection with the settlement of claims filed against a competitor. The Company recorded a $ 7,500 gain for the year ended December 31, 2023 for the proceeds received as a reduction to selling, general and administrative expenses. 11. REVENUE The Company develops, manufactures and sells devices designed primarily for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves. These devices are marketed to a broad base of medical centers globally and primarily used by cardiothoracic and thoracic surgeons. The Company recognizes revenue when control of promised goods is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. 65 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) United States revenue by product type is as follows: 2025 2024 2023 Open ablation $ 143,847 $ 123,647 $ 105,287 Minimally invasive ablation 31,475 45,737 44,577 Pain management 81,923 61,844 49,199 Appendage management 178,127 151,588 134,481 Total United States $ 435,372 $ 382,816 $ 333,544 International revenue by product type is as follows: 2025 2024 2023 Open ablation $ 41,040 $ 34,693 $ 31,483 Minimally invasive ablation 8,371 8,104 6,670 Pain management 7,692 5,624 2,013 Appendage management 42,053 34,070 25,535 Total International $ 99,156 $ 82,491 $ 65,701 Revenue attributed to customer geographic locations is as follows: 2025 2024 2023 United States $ 435,372 $ 382,816 $ 333,544 Europe 61,493 49,874 38,469 Asia-Pacific 30,723 27,379 24,526 Other International 6,940 5,238 2,706 Total International 99,156 82,491 65,701 Total Revenue $ 534,528 $ 465,307 $ 399,245 12. INCOME TAXES The Company files federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations. The Company uses the asset and liability method under which deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. A valuation allowance against deferred tax assets is recorded when it is more likely than not that such assets will not be fully realized. The Company's valuation allowance offsets substantially all its net deferred tax assets as it is more likely than not that the benefit of the deferred tax assets will not be recognized in future periods. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. Key elements of the Tax Cuts and Jobs Act of 2017 are made permanent under the OBBBA, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation. The legislation has multiple effective dates, with certain provisions effective in 2025 and others effective in 2026 or 2027. FASB ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on tax balances to be recognized in the period in which the legislation is enacted. As the Company maintains a full valuation allowance on its U.S. deferred tax assets, the legislation did not have a material impact on the income tax expense or effective tax rate for the year ended December 31, 2025. The Company’s pre-tax book loss for domestic and international operations was $ 8,811 and $ 1,352 for 2025, $ 36,983 and $ 6,691 for 2024, and $ 17,822 and $ 12,025 for 2023. The Company had undistributed earnings of foreign subsidiaries of approximately $ 774 at December 31, 2025. The Company does not consider these earnings as permanently reinvested but has determined that any related deferred taxes upon repatriation would be offset by our valuation allowance. 66 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) The Company’s provision for income taxes for each of the years ended December 31 is as follows: 2025 2024 2023 Current tax expense Federal $ — $ — $ — State 698 450 389 Foreign 649 568 217 Total current tax expense 1,347 1,018 606 Deferred tax expense Federal $ ( 1,215 ) $ ( 4,985 ) $ ( 2,972 ) State 1,276 ( 1,087 ) ( 928 ) Foreign ( 1,273 ) ( 1,379 ) ( 3,671 ) Change in valuation allowance 1,150 7,457 7,556 Total deferred tax expense ( 62 ) 6 ( 15 ) Total tax expense $ 1,285 $ 1,024 $ 591 The detail of deferred tax assets and liabilities at December 31 is as follows: 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 117,132 $ 116,679 Research and development credit carryforwards 22,089 18,181 Research and experimental expenditures 24,257 31,106 Equity compensation 12,486 11,738 Finance and operating lease liabilities 5,250 2,494 Inventories 3,179 3,325 Accruals and reserves 1,863 1,478 Property and equipment 327 1,052 Total deferred tax assets 186,583 186,053 Deferred tax liabilities: Intangible assets ( 3,085 ) ( 5,005 ) Right-of-use assets ( 3,029 ) ( 1,749 ) Other ( 217 ) ( 254 ) Total deferred tax liabilities ( 6,331 ) ( 7,008 ) Valuation allowance ( 180,177 ) ( 179,027 ) Net deferred tax assets $ 75 $ 18 67 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) The Company’s 2025 effective income tax rate differs from the federal statutory rate as follows: 2025 Federal tax at statutory rate 21.0 % $ ( 2,134 ) Nontaxable or nondeductible items Officer compensation disallowance ( 19.0 ) 1,927 Share-Based Payment Awards ( 19.7 ) 2,003 50% meals disallowance ( 7.1 ) 721 Other 0.9 ( 96 ) Changes in valuation allowance ( 12.0 ) 1,215 Tax Credits Federal R&D tax credit 38.5 ( 3,908 ) State & local income taxes, net of federal income tax effect † ( 5.5 ) 565 Foreign tax effects Netherlands Change in valuation allowance ( 11.9 ) 1,212 Deferred adjustments 5.0 ( 507 ) Statutory rate difference 1.3 ( 131 ) Other foreign jurisdictions ( 3.9 ) 394 Effect of cross-border tax laws ( 0.2 ) % 24 Effective tax rate ( 12.6 ) % $ 1,285 † California, Texas and Pennsylvania make up the majority (greater than 50%) of the tax effect in this category. The Company's 2024 and 2023 effective income tax rates differ from the federal statutory rate as follows: 2024 2023 Federal tax at statutory rate 21.0 % $ ( 9,171 ) 21.0 % $ ( 6,268 ) Permanent differences ( 6.7 ) 2,942 ( 10.4 ) 3,092 Valuation allowance ( 17.1 ) 7,457 ( 25.3 ) 7,556 State income taxes 1.7 ( 742 ) 1.8 ( 539 ) Federal R&D credit 6.9 ( 3,010 ) 6.6 ( 1,966 ) Foreign income taxes ( 1.3 ) 567 3.4 ( 1,012 ) Federal deferred adjustments ( 6.8 ) 2,981 0.9 ( 272 ) Effective tax rate ( 2.3 ) % $ 1,024 ( 2.0 ) % $ 591 The Company has federal net operating loss carryforwards of $ 216,111 which expire between 2029 and 2037 and $ 175,808 which have no expiration. The Company has state and local net operating loss carryforwards of $ 229,449 which expire between 2026 to 2045. A portion of the Company’s federal and state net operating loss carryforwards are subject to certain limitations under Internal Revenue Code Sections 382 and 383. The Company has federal research and development credit carryforwards of $ 22,089 which expire between 2026 and 2045. Additionally, the Company has foreign net operating loss carryforwards of $ 84,431 which have no expiration. The Company's federal, state, local and foreign tax returns are routinely subject to review by various taxing authorities. Federal income tax returns for periods beginning in 2022 are open for examination. Generally, state and foreign income tax returns for periods beginning in 2021 are open for examination. However, taxing authorities have the ability to audit net operating loss and tax credit carryforwards from years prior to these periods. The Company has not recognized certain tax benefits because of the uncertainty of realizing the entire value of the tax position taken on income tax returns upon review by the taxing authorities. The Company has not accrued any interest and penalties related to unrecognized 68 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) income tax benefits as a result of offsetting net operating losses. However, if required, the Company will recognize interest and penalties within income tax expense and within the related tax liability. A reconciliation of the change in federal and state unrecognized tax benefits for 2025, 2024 and 2023 is presented below: 2025 2024 2023 Balance at the beginning of the year $ 1,514 $ 1,672 $ 1,762 Increases (decreases) for prior year tax positions ( 296 ) ( 158 ) ( 90 ) Increases (decreases) for current year tax positions — — — Increases (decreases) related to settlements — — — Decreases related to statute lapse — — — Balance at the end of the year $ 1,218 $ 1,514 $ 1,672 The balance of unrecognized tax benefits, as disclosed above, would result in adjustments to deferred taxes and related valuation allowances Income taxes paid (net of refunds) was $ 1,290 for the year ended December 31, 2025. The following jurisdictions exceeded 5% of total income taxes paid (net of refunds) in 2025: 2025 Federal $ — State California 213 Texas 134 Pennsylvania 118 Foreign United Kingdom 225 Spain 105 Australia 99 Canada 82 13. EMPLOYEE BENEFIT PLANS The Company sponsors the AtriCure, Inc. 401(k) Plan (401(k) Plan), a defined contribution plan covering substantially all U.S. employees. Eligible employees may contribute pre- or post-tax annual compensation up to specified maximums under the Internal Revenue Code. The Company matches 50 % on the first 8 % of employee contributions to the 401(k) Plan. The Company’s matching contributions were $ 6,157 , $ 5,477 and $ 4,949 in 2025, 2024 and 2023. Additional amounts may be contributed to the 401(k) Plan at the discretion of the Company’s Board of Directors; however, no such discretionary contributions were made in 2025, 2024 or 2023. The Company also provides retirement benefits for employees of its foreign subsidiaries. Total contributions to foreign retirement plans were $ 697 , $ 702 and $ 503 in 2025, 2024 and 2023. 14. EQUITY COMPENSATION PLANS The Company has two share-based incentive plans: the 2023 Stock Incentive Plan (2023 Plan) and the 2018 Employee Stock Purchase Plan (ESPP). Stock Incentive Plan Under the 2023 Plan, the Board of Directors may grant restricted stock awards or restricted stock units (collectively RSAs), nonstatutory stock options, performance share awards, performance share units or stock appreciation rights to Company employees, directors and consultants, and may grant incentive stock options to Company employees. The Compensation Committee of the Board of Directors, as the administrator of the 2023 Plan, has the authority to determine 69 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) the terms of any awards, including the number of shares subject to each award, the exercisability of the awards and the form of consideration. As of December 31, 2025, 5,787 shares of common stock had been reserved for issuance under the 2023 Plan and 3,157 shares were available for future grants. The Company issues registered shares of common stock for stock option exercises, restricted stock grants and performance award grants. The following table summarizes total share-based compensation expense related to employees, directors and consultants for 2025, 2024 and 2023. The expense was allocated as follows: 2025 2024 2023 Cost of revenue $ 2,699 $ 2,323 $ 1,817 Research and development expenses 7,976 6,951 5,802 Selling, general and administrative expenses 34,010 31,131 28,109 Total $ 44,685 $ 40,405 $ 35,728 Performance Share Awards and Units. The award agreements for the performance share awards (PSAs) provide that each PSA that vests represents the right to receive one share of the Company’s common stock at the end of the performance period. The number of shares that vest and are issued to the recipient is based upon the Company’s performance with respect to specified targets at the end of the three-year performance period. Each target has a range of payouts that are used to determine the number of shares that will be issuable when the award vests. The performance and market condition payouts will be determined independently and accumulated to determine the total payout for the three-year performance period, subject to the maximum payout defined in the PSA agreements. All or a portion of the PSAs may vest following a change of control or a termination of service by reason of death or disability. PSAs granted in 2025 have three weighted performance targets measured over a three-year performance period: (i) the Company’s compound annual revenue growth rate (CAGR) in constant currency, a performance condition, (ii) percentage increase in Adjusted EBITDA over base year, a performance condition, and (iii) relative total shareholder return (TSR), a market condition. Adjusted EBITDA is calculated as net income/loss before other income/expense (including interest), income tax expense, depreciation and amortization expense, share-based compensation expense and non-recurring charges that are not reflective of the operational results of the Company's core business and may affect comparability of results period-over-period. Adjusted EBITDA specifically excludes PFA co-development upfront and milestone payments. TSR is measured against the NASDAQ Health Care Index constituents and the 20 -trading-day average stock price prior to the start and end of the performance period. The 2025 PSAs are weighted 50 % on the CAGR performance target, 30 % on the Adjusted EBITDA target, and 20 % on the TSR performance target. PSAs granted in 2025 have payout opportunities ranging from 0 % to 200 % of the target amount. PSAs awarded prior to 2025 have two weighted performance targets measured over a three-year performance period: (i) the Company’s compound annual revenue growth rate (CAGR), a performance condition and (ii) relative total shareholder return (TSR), a market condition. PSAs granted in 2023 and 2024 are weighted 75 % on the CAGR performance target and 25 % on the TSR performance target and have payout opportunities ranging from 0 % to 300 % of the target amount. During 2024, the Compensation Committee approved the grant of Performance Share Units (PSUs) to the Company's President and Chief Executive Officer. The award agreement for the PSUs provides that each PSU that vests represents the right to receive one share of the Company's common stock at the end of the measurement periods. The number of shares that vest and are issued are based on the attainment of specified stock prices over three measurement periods over a four year period. PSUs vest in defined tranches on the last day of the measurement period, subject to a market vesting condition upon the simple moving average of the closing share price during the 60 consecutive calendar days immediately prior to and including the measurement period date. PSUs that do not vest on the last day of the measurement period are forfeited. PSUs may vest following termination of service by reason of death or disability or change in control based on the performance criteria achieved as of the termination date or in connection with the change in control as specified in the award agreement. 70 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) Performance share activity at target attainment under the plans during 2025 was as follows: Performance Share Awards and Units Number of Shares Outstanding Weighted Average Grant Date Fair Value Outstanding at January 1, 2025 688 $ 37.63 Awarded 261 44.73 Vested ( 211 ) 46.60 Forfeited ( 44 ) 23.87 Outstanding at December 31, 2025 694 $ 37.21 The total fair value of performance share awards vested during 2025, 2024 and 2023 was $ 8,335 , $ 3,459 and $ 4,955 . In determining compensation expense, the fair value of performance share awards with a performance condition is based on the market value of the Company’s stock on the grant date of the awards. The fair value of performance share awards and performance share units with a market condition is estimated on the grant date using a Monte Carlo simulation and includes the following assumptions: 2025 2024 2023 Stock price $ 38.74 $ 36.28 $ 38.81 Expected term (years) 2.8 2.8 to 4.0 2.8 Company volatility 48.0 % 45.0 % 44.8 % Market index average volatility † 99.3 % 92.7 % 91.0 % Market index average correlation † 25.8 % 30.1 % 32.2 % Risk-free interest rate 4.0 % 4.2 to 4.3 % 4.6 % Dividend yield 0.0 % 0.0 % 0.0 % † Not applicable to valuation of performance share units. The expected term is estimated as the remaining performance period at the grant date. Expected volatility is estimated based on the Company and daily trading prices of the market index, adjusted for dividends and stock splits over the remaining performance period. The risk-free interest rate is based upon the United States Constant Maturity yield curve at the time of grant for the expected term of the performance share awards. Based on the assumptions above, the weighted average estimated grant date fair value per share and expense was as follows: 2025 2024 2023 Weighted average estimated grant date fair value $ 44.73 $ 33.19 $ 46.16 Expense 12,246 11,356 11,417 As of December 31, 2025, $ 15,414 of unrecognized compensation costs related to non-vested performance share awards and performance share units are expected to be recognized over a weighted-average period of 1.7 years. 71 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) Restricted Stock Awards and Units. Restricted stock awards and restricted stock units granted generally vest at a rate of 33.3 % on the first, second and third anniversaries of the grant date. Activity under the plans during 2025 was as follows: Restricted Stock Awards RSA Shares Outstanding Weighted Average Grant Date Fair Value Outstanding at January 1, 2025 1,633 $ 36.69 Awarded 958 37.49 Released ( 710 ) 38.47 Forfeited ( 143 ) 36.06 Outstanding at December 31, 2025 1,738 $ 36.45 The total fair value of restricted stock vested during 2025, 2024 and 2023 was $ 26,270 , $ 14,732 and $ 13,824 . In determining compensation expense, the fair value of restricted stock awards and restricted stock units is based on the market value of the Company’s stock on the grant date of the awards. The weighted average estimated grant date fair value per share and expense was as follows: 2025 2024 2023 Weighted average estimated grant date fair value $ 37.49 $ 33.47 $ 39.21 Expense 30,396 26,975 21,797 As of December 31, 2025, $ 37,652 of unrecognized compensation costs related to non-vested restricted stock awards and restricted stock units are expected to be recognized over a weighted-average period of 1.8 years. Stock Options. Stock options granted generally vest at a rate of 33.3 % on the first, second and third anniversaries of the grant date and expire ten years from the date of grant. Activity under the plans during 2025 was as follows: Time-Based Stock Options Number of Shares Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2025 262 $ 35.71 Granted — — Exercised ( 64 ) 21.21 Forfeited ( 8 ) ( 68.65 ) Outstanding at December 31, 2025 190 $ 39.23 3.0 $ 2,044 Vested and expected to vest 190 $ 39.23 2.9 $ 2,044 Exercisable at December 31, 2025 190 $ 39.23 3.0 $ 2,044 The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 895 , $ 711 and $ 2,982 . As a result of the Company’s full valuation allowance on its net deferred tax assets, no tax benefit was recognized related to the stock option exercises. The exercise price per share of each option is equal to the fair market value of the underlying share on the date of grant. For 2025, 2024 and 2023, $ 1,367 , $ 1,022 and $ 2,316 in cash proceeds from the exercise of stock options were included in the Consolidated Statements of Cash Flows. No options were granted in 2025, 2024, or 2023. Option expense was $ 0 , $ 328 , and $ 765 for the years ended December 31, 2025, 2024 and 2023. As of December 31, 2025 there is no unrecognized compensation cost related to stock options. 72 Table of Contents ATRICURE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) (In Thousands, Except Per Share Amounts) Employee Stock Purchase Plan Under the ESPP, shares of the Company’s common stock may be purchased at a discount ( 15 %) to the lesser of the closing price of the Company’s common stock on the first or last trading day of the offering period. The offering period (currently six months ) and the offering price are subject to change. Participants may not purchase more than $ 25 of the Company’s common stock in a calendar year and may not purchase a value of more than 3 shares during an offering period. As of December 31, 2025, 295 shares are available for future issuance under the ESPP. ESPP expense was $ 2,043 , $ 1,746 and $ 1,749 for the years ended December 31, 2025, 2024 and 2023. 15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) In addition to net losses, comprehensive loss includes foreign currency translation adjustments and unrealized losses on investments. Accumulated other comprehensive income (loss) consisted of the following, net of tax: 2025 2024 2023 Total accumulated other comprehensive loss at beginning of period $ ( 1,035 ) $ ( 993 ) $ ( 4,096 ) Unrealized (losses) gains on investments Balance at beginning of period $ — $ ( 800 ) $ ( 3,698 ) Other comprehensive income (loss) before reclassifications — 800 2,898 Amounts reclassified from accumulated other comprehensive loss to interest income — — — Balance at end of period $ — $ — $ ( 800 ) Foreign currency translation adjustment Balance at beginning of period $ ( 1,035 ) $ ( 193 ) $ ( 398 ) Other comprehensive income (loss) before reclassifications 2,306 ( 951 ) 154 Amounts reclassified from accumulated other comprehensive income (loss) to other income (expense) ( 705 ) 109 51 Balance at end of period $ 566 $ ( 1,035 ) $ ( 193 ) Total accumulated other comprehensive income (loss) at end of period $ 566 $ ( 1,035 ) $ ( 993 ) 73 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.