What changed in this filing

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Item 1. Financial Statements

2025-11-03 compared with 2025-08-05 · 118 added, 102 removed, 860 unchanged (20% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

September 30,

2025 December 31,

3 unchanged sentences

Accounts receivable, net and contract assets 346,035 308,455

181,505 141,860

Inventories 185,796 141,860

Prepaid expenses and other current assets 94,955 38,951

10 unchanged sentences

Accrued expenses 111,183 128,851

Current portion of long-term debt, net 710,685 —

Total current liabilities 837,228 139,100

1 unchanged sentence

Other long-term liabilities 71,799 54,758

Deferred tax liabilities, net 8,218 —

Total liabilities 1,717,317 1,699,656

6 unchanged sentences

300,000 shares authorized;

117,621 and 123,138 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

117,523 and 123,138 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 23,909 —

8 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

28 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

1 unchanged sentence

Other comprehensive income

Unrealized (loss) gain on marketable securities, net

Unrealized gain on marketable securities, net

312 1,735 466 1,272

Foreign currency translation adjustment ( 3 ) 2 ( 6 ) ( 5 )

Unrealized (loss) gain on derivative instruments, net

Unrealized gain (loss) on derivative instruments, net

3,671 ( 6,919 ) ( 30,599 ) 1,772

6 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating activities

21 unchanged sentences

Purchases of property and equipment ( 5,543 ) ( 7,644 )

Net cash used in investing activities ( 5,634 ) ( 124,720 )

Net cash provided by (used in) investing activities

195,975 ( 292,203 )

Financing activities

1 unchanged sentence

Proceeds from issuance of common stock under equity incentive plans, net of taxes paid related to net share settlement

17,683 27,554

Net cash (used in) provided by financing activities

( 324,689 ) 27,554

Net (decrease) increase in cash and cash equivalents

Net increase in cash and cash equivalents

303,815 35,948

10 unchanged sentences

(in thousands)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Common Stock Additional

Capital Accumulated

Comprehensive Loss

Retained Earnings Total

Comprehensive Loss Retained Earnings Total

Stockholders’

Shares Amount

BALANCE AS OF MARCH 31, 2025 123,170 $ 123 $ 7,596 $ ( 3,413 ) $ 477,964 $ 482,270

BALANCE AS OF JUNE 30, 2025 117,621 $ 118 $ — $ ( 28,403 ) $ 361,033 $ 332,748

Share-based compensation expense — — 12,160 — — 12,160

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net and shares issued under the ESPP plan 269 1 4,523 — — 4,524

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net 627 1 16,480 — — 16,481

Repurchase of common stock

( 725 ) ( 1 ) ( 4,731 ) ( 34,112 ) ( 38,844 )

Other comprehensive loss

Other comprehensive income

— — — 6,145 — 6,145

Net income — — — — 175,225 175,225

BALANCE AS OF JUNE 30, 2025 117,621 $ 118 $ — $ ( 28,403 ) $ 361,033 $ 332,748

Six Months Ended June 30, 2025

BALANCE AS OF SEPTEMBER 30, 2025 117,523 $ 118 $ 23,909 $ ( 22,258 ) $ 502,146 $ 503,915

Nine Months Ended September 30, 2025

Common Stock Additional

9 unchanged sentences

Repurchase of common stock ( 6,996 ) ( 7 ) ( 28,766 ) ( 316,203 ) ( 344,976 )

Other comprehensive income

Other comprehensive loss

— — — ( 26,087 ) ( 26,087 )

Net income — — — — 458,480 458,480

BALANCE AS OF JUNE 30, 2025 117,621 $ 118 $ — $ ( 28,403 ) $ 361,033 $ 332,748

Three Months Ended June 30, 2024

BALANCE AS OF SEPTEMBER 30, 2025 117,523 $ 118 $ 23,909 $ ( 22,258 ) $ 502,146 $ 503,915

Three Months Ended September 30, 2024

Common Stock Additional

4 unchanged sentences

Shares Amount

BALANCE AS OF MARCH 31, 2024 127,186 $ 127 $ 11,794 $ ( 1,486 ) $ 167,373 $ 177,808

BALANCE AS OF JUNE 30, 2024 126,535 $ 127 $ 30,747 $ ( 2,068 ) $ 260,618 $ 289,424

Share-based compensation expense — — 12,578 — — 12,578

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net and shares issued under the ESPP plan 415 1 9,481 — — 9,482

Repurchase of common stock ( 1,066 ) ( 1 ) 1 — —

Other comprehensive income

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net 648 — 18,561 — — 18,561

Other comprehensive loss

— — — ( 4,871 ) — ( 4,871 )

Net income — — — — 137,011 137,011

BALANCE AS OF JUNE 30, 2024 126,535 $ 127 $ 30,747 $ ( 2,068 ) $ 260,618 $ 289,424

Six Months Ended June 30, 2024

BALANCE AS OF SEPTEMBER 30, 2024 127,183 $ 127 $ 61,886 $ ( 6,939 ) $ 397,629 $ 452,703

Nine Months Ended September 30, 2024

Common Stock Additional

Capital Accumulated

Comprehensive (Loss) Income

Comprehensive Loss

Retained Earnings

8 unchanged sentences

Net income — — — — 307,079 307,079

BALANCE AS OF JUNE 30, 2024 126,535 $ 127 $ 30,747 $ ( 2,068 ) $ 260,618 $ 289,424

BALANCE AS OF SEPTEMBER 30, 2024 127,183 $ 127 $ 61,886 $ ( 6,939 ) $ 397,629 $ 452,703

See accompanying notes to condensed consolidated financial statements.

26 unchanged sentences

In addition to receiving upfront licensing fees from our ENHANZE collaborations, we are entitled to receive event and sales-based milestone payments, revenues from the sale of bulk rHuPH20 and royalties from commercial sales of approved partner products co-formulated with ENHANZE.

We currently earn royalties from sales of 10 commercial products including sales of five commercial products from the Roche collaboration, two commercial products from the Janssen collaboration and one commercial product from each of the Takeda, argenx and BMS collaborations.

We currently earn royalties from sales of ten commercial products including sales of five commercial products from the Roche collaboration, two commercial products from the Janssen collaboration and one commercial product from each of the Takeda, argenx and BMS collaborations.

We have commercialized auto-injector products with Teva Pharmaceutical Industries, Ltd.

25 unchanged sentences

Cash equivalents consist of highly liquid investments, readily convertible to cash, which mature within 90 days or less from the date of purchase.

As of June 30, 2025, our cash and cash equivalents consisted of money market funds, bank certificate of deposits and demand deposits at commercial banks.

As of September 30, 2025, our cash and cash equivalents consisted of money market funds, bank certificate of deposits and demand deposits at commercial banks.

Marketable securities are investments with original maturities of more than 90 days from the date of purchase that are specifically identified to fund current operations.

15 unchanged sentences

The carrying amount of cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments.

Available-for-sale marketable securities consist of corporate debt securities, United States (“U.S.”) Treasury securities, agency bonds and commercial paper, and are measured at fair value using Level 1 and Level 2 inputs.

As of September 30, 2025, our available-for-sale marketable securities consisted of corporate debt securities and United States (“U.S.”) Treasury securities, and were measured at fair value using Level 1 and Level 2 inputs.

Level 2 financial instruments are valued using market prices on less active markets and proprietary pricing valuation models with observable inputs, including interest rates, yield curves, maturity dates, issue dates, settlement dates, reported trades, broker-dealer quotes, issue spreads, benchmark securities or other market related data.

25 unchanged sentences

Property and Equipment, Net

Property and equipment, including ROU assets, are recorded at cost, less accumulated depreciation and amortization.

Equipment is depreciated using the straight-line method over its estimated useful life ranging from three years to ten years and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter.

Property and equipment, which includes internal-use software and leasehold improvements, are recorded at cost, less accumulated depreciation and amortization.

Equipment and internal-use software are depreciated using the straight-line method over its estimated useful life ranging from three years to ten years and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter.

Impairment of Long-Lived Assets

16 unchanged sentences

No portion of our foreign currency forward contracts were excluded from the assessment of hedge effectiveness.

As of June 30, 2025, all hedges were determined to be highly effective.

As of September 30, 2025, all hedges were determined to be highly effective.

The assets or liabilities associated with our hedging contracts are recorded at fair market value in prepaid expense and other current assets, prepaid expenses and other assets, accrued expenses, or other long-term liabilities, respectively, in our condensed consolidated balance sheets.

4 unchanged sentences

We do not use derivatives for speculative or trading purposes.

As of June 30, 2025, the amount expected to be recognized as a net loss out of AOCI into our condensed consolidated statements of income during the next 12 months is $ 9.9 million.

As of September 30, 2025, the amount expected to be recognized as a net loss out of AOCI into our condensed consolidated statements of income during the next 12 months is $ 8.5 million.

Business Combinations

46 unchanged sentences

All amounts owed to us are noncancelable after the underlying triggering event occurs, and nonrefundable once paid.

Unless terminated earlier in

accordance with its terms, collaborations generally continue in effect until the last to expire royalty payment term, as determined on a product by product and country by country basis, with each royalty term starting on the first commercial sale of that product and ending the later of:

Unless terminated earlier in accordance with its terms, collaborations generally continue in effect until the last to expire royalty payment term, as determined on a product by product and country by country basis, with each royalty term starting on the first commercial sale of that product and ending the later of:

(i) a specified period or term set forth in the agreement or (ii) expiration of the last to expire of the valid claims of our patents covering rHuPH20 or other specified patents developed under the collaboration which valid claim covers a product developed under the collaboration.

71 unchanged sentences

The fees are charged based on hours worked by our employees and the fixed contractual rate per hour, plus third-party pass-through costs, on a monthly basis.

We recognize revenues as the related services are performed based on the amounts billed, as the

partner consumes the benefit of research and development work simultaneously as we perform these services, and the amounts billed reflect the value of these services to the customer.

We recognize revenues as the related services are performed based on the amounts billed, as the partner consumes the benefit of research and development work simultaneously as we perform these services, and the amounts billed reflect the value of these services to the customer.

Device License, Development and Supply Arrangements

21 unchanged sentences

Although wholesalers have product return rights, we do not believe they have a significant incentive to return the product to us.

The determination of certain reserves and sales allowances requires us to make a number of judgements and estimates to reflect our best estimate of the transaction price and the amount of consideration to which we believe we would be ultimately entitled to receive.

The determination of certain reserves and sales allowances requires us to make a number of judgments and estimates to reflect our best estimate of the transaction price and the amount of consideration to which we believe we would be ultimately entitled to receive.

The expected value is determined based on unit sales data, contractual terms with customers and third-party payers, historical and estimated future percentage of rebates incurred on sales, historical and future insurance plan billings, any new or anticipated changes in programs or regulations that would impact the amount of the actual rebates, customer purchasing patterns, product expiration dates and levels of inventory in the distribution channel.

16 unchanged sentences

We sell bulk rHuPH20 to partners for use in research and development and, subsequent to receiving marketing approval, we sell it for use in collaboration commercial products.

Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement or a supply agreement, and delivery of units of bulk rHuPH20 represent performance obligations under

each purchase order.

Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement or a supply agreement, and delivery of units of bulk rHuPH20 represent performance obligations under each purchase order.

We provide a standard warranty that the product conforms to specifications.

32 unchanged sentences

On a quarterly basis, we assess the need for valuation allowance on our DTAs, weighing all positive and negative evidence, to assess if it is more-likely-than-not that some or all of our DTAs will be realized.

We recorded a provision for

income tax of $ 39.8 million and $ 65.5 million with an effective tax rate of 19.4 % and 18.8 % for the three and six months ended June 30, 2025, respectively.

We recorded a provision for income tax of $ 43.7 million and $ 109.2 million with an effective tax rate of 20.2 % and 19.3 % for the three and nine months ended September 30, 2025, respectively.

The difference between our effective tax rates and the U.S.

federal statutory rate of 21% is primarily due to decreases from share-based compensation windfall tax benefit, Foreign Derived Intangible Income deduction, valuation allowance adjustments, and research and development credit generation, partially offset by state income tax and Section 162(m) disallowance.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law addressing key provisions of the 2017 Tax Cuts and Jobs Act set to expire at the end of 2025 along with certain other U.S.

corporate tax provisions.

The OBBBA is applicable to us beginning in the third quarter of 2025.

We are still evaluating the full impact of the OBBBA on our consolidated financial statements and related disclosures.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

The OBBBA addresses key provisions of the 2017 Tax Cuts and Jobs Act including the immediate expensing of domestic research and development expenditures and 100% bonus depreciation on qualified property.

The impacts of the OBBBA are reflected in our condensed consolidated statements of operations for the period ended September 30, 2025, of which there was no material impact to our income tax expense.

As of September 30, 2025, certain provisions of the OBBBA will change the timing of cash tax payments in the current fiscal year and future periods.

Segment Information

12 unchanged sentences

Statements or Other Significant Matters

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software

The new guidance includes amendments to clarify and modernize the accounting for costs related to internal-use software, including removing all references to project stages and clarifying thresholds used to begin capitalizing internal-use software development costs.

Annual periods beginning after December 15, 2027 (our 2028 Form 10-K), and interim reporting periods within those annual reporting periods (our Q1 2027 Form 10-Q) - Early adoption is permitted.

Prospective, Retrospective or Modified Transition Approach

We early adopted the new guidance in the interim period ended September 30, 2025, on a prospective basis.

The adoption did not have a material impact on our condensed consolidated financial position, results of operations or financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

2 unchanged sentences

Annual periods beginning after December 15, 2024 (our 2025 Form 10-K) - Early adoption is permitted.

Prospective or Retrospective We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures.

Prospective or Retrospective We do not expect the new guidance to have a material effect on our consolidated financial statements, but will result in expanded financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

5 unchanged sentences

Available-for-sale marketable securities consisted of the following (in thousands):

June 30, 2025

September 30, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

1 unchanged sentence

treasury securities 210,203 120 ( 15 ) 210,308

Agency bonds 9,835 — ( 11 ) 9,824

Commercial paper 7,894 — — 7,894

Total marketable securities, available-for-sale $ 282,036 $ 277 $ ( 15 ) $ 282,298

6 unchanged sentences

Total marketable securities, available-for-sale $ 480,427 $ 592 $ ( 795 ) $ 480,224

As of June 30, 2025, 27 available-for-sale marketable securities with a fair market value of $ 280.8 million were in a gross unrealized loss position of $ 0.3 million.

Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of June 30, 2025 because we do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis.

As of September 30, 2025, five available-for-sale marketable securities with a fair market value of $ 63.0 million were in an immaterial gross unrealized loss position.

Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of September 30, 2025 because we do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis.

The estimated fair value of our contractual maturities of available-for-sale debt securities were as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Due within one year $ 251,444 $ 314,978

5 unchanged sentences

The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Level 1 Level 2 Total Estimated Fair Value

7 unchanged sentences

Agency bonds — — — 9,828 — 9,828

Commercial paper — 7,894 7,894 — — —

Derivative instruments

1 unchanged sentence

— — — — 4,006 4,006

Total assets $ 352,506 $ 138,787 $ 491,293 $ 432,580 $ 106,832 $ 539,412

Total assets measured at fair value

$ 556,388 $ 71,990 $ 628,378 $ 432,580 $ 106,832 $ 539,412

Derivative instruments

3 unchanged sentences

Carrying amounts of the financial assets and liabilities are equal to the fair value.

As of June 30, 2025, the derivative liabilities recorded within accrued expenses and other long-term liabilities in our condensed consolidated balance sheets were $ 9.9 million and $ 24.9 million , respectively.

As of September 30, 2025, the derivative liabilities recorded within accrued expenses and other long-term liabilities in our condensed consolidated balance sheets were $ 8.5 million and $ 19.4 million , respectively.

As of December 31, 2024, the derivative assets recorded within prepaid expenses and other current assets and prepaid expenses and other assets in our consolidated balance sheets were $ 2.4 million and $ 1.6 million , respectively.

The derivative liabilities recorded within other long-term liabilities in our consolidated balance sheets as of December 31, 2024 were not material.

We had no available-for-sale securities that were classified within Level 3 as of June 30, 2025 and December 31, 2024.

We had no available-for-sale securities that were classified within Level 3 as of September 30, 2025 and December 31, 2024.

Our disaggregated revenues were as follows (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

10 unchanged sentences

Upfront license and target nomination fees

— 27,000 220 27,000

Event-based development and regulatory milestones and other fees

6 unchanged sentences

Total revenues $ 354,264 $ 290,084 $ 944,844 $ 717,316

During the three months ended June 30, 2025, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 240.1 million.

This amount represents royalties and a sales milestone earned in the current period, in addition to $ 24.5 million of variable consideration in the contracts where uncertainties were resolved and the development milestones are expected to be achieved or were achieved.

We also recognized revenue of $ 0.8 million during the three months ended June 30, 2025 that had been included in accrued expense and other long-term liabilities in our condensed consolidated balance sheets as of December 31, 2024.

During the six months ended June 30, 2025, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 423.3 million.

During the three months ended September 30, 2025, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 256.0 million.

This amount represents royalties and a sales milestone earned in the current period.

We recognized no revenue during the three months ended September 30, 2025 that had been included in accrued expense and other long-term liabilities in our condensed consolidated balance sheets as of December 31, 2024.

During the nine months ended September 30, 2025, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 679.4 million.

We also recognized revenue of $ 2.0 million during the six months ended June 30, 2025 that had been included in accrued expense and other long-term liabilities in our condensed consolidated balance sheets as of December 31, 2024.

We also recognized revenue of $ 2.0 million during the nine months ended September 30, 2025 that had been included in accrued expenses and other long-term liabilities in our consolidated balance sheets as of December 31, 2024.

Accounts receivable, net, other contract assets and deferred revenues (contract liabilities) from contracts with customers, including partners, consisted of the following (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Accounts receivable, net $ 343,535 $ 288,204

1 unchanged sentence

Deferred revenues 8,373 10,343

As of June 30, 2025, the amounts included in the transaction price of our contracts with customers, including collaboration partners, and allocated to goods and services not yet provided were $ 187.7 million, of which $ 179.3 million relates to unfulfilled product purchase orders and $ 8.4 million has been collected and is reported as other long-term liabilities in our condensed consolidated balance sheets.

As of September 30, 2025, the amounts included in the transaction price of our contracts with customers, including collaboration partners, and allocated to goods and services not yet provided were $ 269.3 million, of which $ 260.9 million relates to unfulfilled product purchase orders and $ 8.4 million has been collected and is reported as other long-term liabilities in our condensed consolidated balance sheets.

The unfulfilled product purchase orders are estimated to be delivered by the end of 2026.

Of the total deferred revenues of $ 8.4 million, no amount is expected to be used by our customers within the next 12 months.

We recognized contract assets of $ 1.3 million as of June 30, 2025, which related to development milestones deemed probable of receipt for intellectual property licenses granted to partners in prior periods and for goods or services when control has transferred to the customer, and corresponding revenue is recognized but is not yet billable to the customer in accordance with the terms of the contract.

We recognized contract assets of $ 2.5 million as of September 30, 2025, which related to development milestones deemed probable of receipt for intellectual property licenses granted to partners in prior periods and for goods or services when control has transferred to the customer, and corresponding revenue is recognized but is not yet billable to the customer in accordance with the terms of the contract.

Certain Balance Sheet Items

Accounts receivable, net and contract assets consisted of the following (in thousands):

September 30,

2025 December 31,

14 unchanged sentences

Inventories consisted of the following (in thousands):

September 30,

2025 December 31,

10 unchanged sentences

Prepaid expenses and other assets consisted of the following (in thousands):

September 30,

2025 December 31,

13 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

September 30,

2025 December 31,

2 unchanged sentences

Computer and office equipment 8,054 7,955

Internal-use software

Leasehold improvements 7,428 7,012

5 unchanged sentences

$ 71,420 $ 75,035

Depreciation and amortization expense was approximately $ 2.7 million and $ 2.6 million, inclusive of ROU asset amortization of $ 1.5 million and $ 1.4 million for the three months ended June 30, 2025 and 2024, respectively.

Depreciation and amortization expense was approximately $ 5.4 million and $ 5.0 million, inclusive of ROU asset amortization of $ 3.0 million and $ 2.9 million for the six months ended June 30, 2025 and 2024, respectively.

Depreciation and amortization expense was approximately $ 8.1 million and $ 7.6 million, inclusive of ROU asset amortization of $ 4.5 million and $ 4.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Accrued expenses consisted of the following (in thousands):

September 30,

2025 December 31,

11 unchanged sentences

$ 111,183 $ 128,851

Expense associated with the accretion of the lease liabilities was approximately $ 0.5 million and $ 0.6 million for the three months ended June 30, 2025 and 2024, respectively, and $ 1.0 million and $ 1.2 million for the six months ended June 30, 2025 and 2024, respectively.

Total lease expense for the three months ended June 30, 2025 and 2024 was $ 2.0 million and $ 2.0 million, respectively, and $ 4.0 million and $ 4.0 million for the six months ended June 30, 2025 and 2024, respectively.

Cash paid for amounts related to leases for the three months ended June 30, 2025 and 2024 was $ 1.8 million and $ 1.7 million, respectively, and $ 3.5 million and $ 3.5 million for the six months ended June 30, 2025 and 2024, respectively.

Expense associated with the accretion of the lease liabilities was approximately $ 0.6 million and $ 0.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 1.6 million and $ 1.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Total lease expense for the three months ended September 30, 2025 and 2024 was $ 2.1 million and $ 2.0 million, respectively, and $ 6.1 million and $ 6.0 million for the nine months ended September 30, 2025 and 2024, respectively.

Cash paid for amounts related to leases for the three months ended September 30, 2025 and 2024 was $ 1.9 million and $ 1.6 million, respectively, and $ 5.4 million and $ 5.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Goodwill and Intangible Assets, net

1 unchanged sentence

Balance as of December 31, 2024

Balance as of June 30, 2025

Balance as of September 30, 2025

Intangible Assets, net

Our acquired intangible assets are amortized using the straight-line method over their estimated useful lives of seven to ten years .

The following table shows the cost, accumulated amortization and weighted average useful life in years for our acquired intangible assets as of June 30, 2025 (in thousands).

The following table shows the cost, accumulated amortization and weighted average useful life in years for our acquired intangible assets as of September 30, 2025 (in thousands).

Weighted Average Useful Life (in years)

28 unchanged sentences

and (5) at any time from, and including, February 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date.

As of June 30, 2025, the 2028 Convertible Notes were not convertible.

As of September 30, 2025, the conditional conversion feature of the 2028 Convertible Notes was triggered, and as a result, the 2028 Convertible Notes were classified to current portion of long-term debt, net in our condensed consolidated balance sheets.

Upon conversion, we will pay cash for the settlement of principal, and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election.

1 unchanged sentence

The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued or unpaid interest.

As of June 30, 2025, we were in compliance with all covenants.

As of September 30, 2025, we were in compliance with all covenants.

Capped Call Transactions

2 unchanged sentences

The cap price of the Capped Call Transactions is initially $ 75.4075 per share of common stock, representing a premium of 75 % above the last reported sale price of $ 43.09 per share of common stock on August 15, 2022, and is subject to certain adjustments under the terms of the Capped Call Transactions.

As of June 30, 2025, no capped calls had been exercised.

As of September 30, 2025, no capped calls had been exercised.

Pursuant to their terms, the capped calls qualify for classification within stockholders’ equity in our condensed consolidated balance sheets, and their fair value is not remeasured and adjusted as long as they continue to qualify for stockholders’ equity classification.

16 unchanged sentences

and (5) at any time from, and including, September 1, 2026 until the close of business on the scheduled trading day immediately before the maturity date.

As of June 30, 2025, the 2027 Convertible Notes were not convertible.

As of September 30, 2025, the 2027 Convertible Notes were not convertible.

Upon conversion, we will pay cash for the settlement of principal and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election.

1 unchanged sentence

The conversion rate is subject to adjustment.

As of June 30, 2025, we were in compliance with all covenants.

As of September 30, 2025, we were in compliance with all covenants.

Net Carrying Amounts of our Convertible Notes

The carrying amount and fair value of our Convertible Notes were as follows (in thousands).

September 30,

2025 December 31,

20 unchanged sentences

The following table summarizes the components of interest expense and the effective interest rates for each of our Convertible Notes (in thousands).

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

25 unchanged sentences

The commitment fees range from 0.15 % to 0.35 % per annum based on our consolidated net leverage ratio.

As of June 30, 2025, the Revolving Credit Facility was undrawn.

As of September 30, 2025, the Revolving Credit Facility was undrawn.

We incurred a total of $ 3.6 million in third-party costs related to the 2022 Credit Agreement which are recorded as debt issuance cost within prepaid expenses and other assets in our condensed consolidated balance sheets.

As of June 30, 2025, the unamortized debt issuance cost related to the revolving credit facility was $ 1.1 million.

As of September 30, 2025, the unamortized debt issuance cost related to the revolving credit facility was $ 0.9 million.

Stockholders’ Equity

1 unchanged sentence

The following table summarizes share-based compensation expense included in our condensed consolidated statements of income related to share-based awards (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

3 unchanged sentences

Share-based compensation expense by type of share-based award was as follows (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

2 unchanged sentences

Total share-based compensation expense $ 12,160 $ 12,578 $ 34,994 $ 31,923

We granted stock options to purchase approximately 0.4 million and 0.6 million shares of common stock during the six months ended June 30, 2025 and 2024, respectively.

We granted stock options to purchase approximately 0.5 million and 0.6 million shares of common stock during the nine months ended September 30, 2025 and 2024, respectively.

The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant.

6 unchanged sentences

The assumptions used in the Black-Scholes Model were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

12 unchanged sentences

Share purchases are funded through payroll deduction of at least 1 % and up to 15 % of an employee’s compensation for each payroll period, and no employee may purchase shares under the 2021 ESPP that exceeds $ 25,000 worth of our common stock for a calendar year.

As of June 30, 2025, 2,537,502 shares were available for future purchase.

As of September 30, 2025, 2.5 million shares were available for future purchase.

The offering period is generally for a six-month period.

Offering periods shall commence on or about the sixteenth day of June and December of each year and end on or about the fifteenth day of the next December and June, respectively, occurring thereafter.

During the six months ended June 30, 2025, 22,092 shares were issued pursuant to the ESPP.

During the nine months ended September 30, 2025, 22,092 shares were issued pursuant to the ESPP.

Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized was as follows (in thousands, unless otherwise noted):

June 30, 2025

September 30, 2025

Expense Remaining

16 unchanged sentences

The second $ 250.0 million share repurchase was completed in June 2025, resulting in a total purchase of 4.8 million shares at an average price of $ 52.09 per share.

In June 2025, we initiated the third $ 250.0 million share repurchase tranche under the $ 750.0 million approved program from February 2024, of which $ 53.5 million was used to repurchase approximately 1.0 million shares at an average price of $ 52.40 per share in June 2025.

In June 2025, we initiated the third $ 250.0 million share repurchase tranche under the $ 750.0 million approved program from February 2024.

As of September 30, 2025, $ 92.3 million has been used to repurchase approximately 1.7 million shares at an average price of $ 52.89 per share.

We had the following share repurchase activity under the approved share repurchase program (in thousands, except share and per share amounts):

5 unchanged sentences

5,818,338 $ 52.16 303,490

Third quarter (2)

725,514 $ 53.59 38,882

6,996,305 $ 52.42 $ 366,782

(1) The shares we repurchased during the first quarter are part of the ASR initiated in December 2024.

8 unchanged sentences

A reconciliation of the numerators and the denominators of the basic and diluted earnings per share computations is as follows (in thousands, except per share amounts):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

10 unchanged sentences

Shares which have been excluded from the calculation of diluted earnings per common share because their effect was anti-dilutive include the following (shares in millions):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements