What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-10-28 · 93 added, 101 removed, 133 unchanged (59% of the section changed)

1 unchanged sentence

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains forward-looking statements, which involve risks and uncertainties.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A under the caption “Risk Factors.” The interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the six months ended June 30, 2025.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A under the caption “Risk Factors.” The interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

Neurocrine Biosciences is a neuroscience-focused, biopharmaceutical company with a simple purpose:

to relieve suffering for people with great needs, but few options.

We are dedicated to discovering and developing life-changing treatments for patients with under-addressed neuropsychiatric, neurological, and neuroendocrine disorders.

to relieve suffering for people with great needs.

We are dedicated to discovering, developing, and commercializing life-changing treatments for patients with under-addressed neurological, psychiatric, endocrine, and immunological disorders.

Our portfolio of products includes U.S.

Food and Drug Administration (FDA) approved treatments for tardive dyskinesia (TD), chorea associated with Huntington's disease, classic congenital adrenal hyperplasia (CAH), and endometriosis and uterine fibroids in collaboration with AbbVie Inc.

In addition, we have a diversified portfolio of multiple compounds in mid- to late-phase development across our core therapeutic areas and an expanding early-phase pipeline that includes a range of modalities including small molecules, peptides, proteins, antibodies, conjugates, and gene therapy.

Food and Drug Administration (FDA) approved treatments for tardive dyskinesia (TD), chorea associated with Huntington's disease, classic congenital adrenal hyperplasia due to 21-hydroxylase deficiency (CAH), and endometriosis and uterine fibroids in collaboration with AbbVie Inc.

We launched INGREZZA ® (valbenazine) in the U.S.

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Key elements of our commercial strategy include maximizing the opportunities in INGREZZA and CRENESSITY through consistent and effective commercial execution, continued development of valbenazine as the best-in-class treatment for new patient populations, and to lead the evolving understanding of vesicular monoamine transporter 2 (VMAT2) biology and its role in disease.

INGREZZA net product sales totaled $1.9 billion and $1.7 billion, respectively, for the first nine months of 2025 and 2024 and accounted for substantially all of our total net product sales during each of these reporting periods.

CRENESSITY net product sales totaled $165.8 million for the first nine months of 2025.

Our partner Mitsubishi Tanabe Pharma Corporation (MTPC) launched DYSVAL ® (valbenazine) in Japan for the treatment of TD in June 2022 and subsequently in other select Asian markets, where it is marketed as REMLEAS ® (valbenazine).

We receive royalties at tiered percentage rates on MTPC net sales of valbenazine.

Our partner AbbVie launched ORILISSA ® (elagolix tablets) in the U.S.

for the treatment of endometriosis in August 2018 and ORIAHNN ® (elagolix, estradiol and norethindrone acetate capsules and elagolix capsules) in the U.S.

for the treatment of heavy menstrual bleeding due to uterine fibroids in June 2020.

We receive royalties at tiered percentage rates on AbbVie net sales of elagolix.

2026 Business Highlights

• In February 2025, our Board of Directors authorized a new share repurchase program (the 2025 Repurchase Program) under which we may repurchase up to $500.0 million of our common stock, subject to market conditions.

The 2025 Repurchase Program is in addition to the $300.0 million accelerated repurchase program (the 2024 Repurchase Program) that was announced in October 2024 and completed in February 2025.

During the first nine months of 2025, we repurchased 1.5 million shares on the open market under the 2025 Repurchase Program and received an additional 0.3 million shares upon settlement of the 2024 Repurchase Program in February 2025.

• In January 2025, we received Centers for Medicare and Medicaid Services (CMS) notification that INGREZZA qualifies for the small biotech exception under the Medicare Drug Price Negotiation Program, which provides exemption from selection until 2027 for initial price applicability in 2029.

In addition, we expanded formulary access for INGREZZA, significantly improving coverage to now include approximately 70% of TD and Huntington's disease Medicare beneficiaries to support long-term growth.

• Appointed Sanjay Keswani, M.D., as Chief Medical Officer (CMO) and member of the Company's executive management team effective June 2, 2025.

• Announced planned expansion of the INGREZZA and CRENESSITY sales teams to maximize commercial momentum.

Expansion to be completed by the end of the first quarter of 2026.

• Total net product sales for the first quarter of 2026 increased $247.3 million, or 43.9%, to $811.0 million, reflecting increased net product sales of CRENESSITY, which was launched in the U.S.

as a first-in-class FDA-approved treatment of CAH in December 2024, and INGREZZA, driven primarily by volume growth and record new prescriptions on strong patient demand.

• In April 2026, we entered into an Agreement and Plan of Merger (the Merger Agreement) to acquire all of the outstanding shares of common stock of Soleno Therapeutics, Inc.

(Soleno) for approximately $2.9 billion.

Pursuant to the Merger Agreement, we commenced a tender offer to purchase all of the outstanding shares of common stock of Soleno for $53.00 per share in cash, without interest and subject to any required withholding of taxes.

On April 27, 2026, at 11:59 p.m.

Eastern Time, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), applicable to the tender offer expired, satisfying the closing condition relating to the expiration or termination of the waiting period under the HSR Act.

We expect the transaction to close in the second quarter of 2026, subject to the tender of at least a majority of the outstanding shares of Soleno common stock and the satisfaction of other customary closing conditions.

• On January 21, 2026, we completed the sale of Neurocrine Group Limited to Immedica Pharma AB for $63.2 million in cash.

As a result of the transaction, during the first quarter of 2026 we recognized a pre-tax gain on sale of $28.6 million in "Gain on sale of business, net of transaction costs" within income from continuing operations.

• Promoted Andrew Ratz, Ph.D., to the executive management team as the Chief Technical Operations Officer.

In his new role, Dr.

Ratz will lead the company's global technical development, manufacturing, and supply chain functions, supporting Neurocrine's expansion beyond small molecules into biologics and device-based therapies.

2026 Pipeline Highlights

• Initiated two Phase 3 clinical studies for direclidine (NBI-1117568), a potential first-in-class, orally active, highly selective investigational M4 agonist, in schizophrenia.

• Initiated a Phase 3 clinical study for osavampator (NBI-1065845), a potential first-in-class alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM), in major depressive disorder (MDD).

• Initiated a Phase 1 clinical study for NBIP-1435, an investigational, long-acting corticotropin-releasing factor type 1 (CRF-1) receptor antagonist administered as a subcutaneous injection for the potential treatment of CAH.

• Initiated a Phase 1 clinical study for NBI-921355, an investigational, selective inhibitor of voltage-gated sodium channels Na v 1.2 and Na v 1.6 in development for the potential treatment of certain types of epilepsy.

• Initiated a Phase 1 clinical study for NBI-1140675, an investigational, oral, selective second-generation small molecule VMAT2 inhibitor in development for the potential treatment of certain neurological and neuropsychiatric conditions.

• Announced top-line data from a Phase 4 study, KINECT-PRO™, demonstrating clinically meaningful and sustained effects of INGREZZA capsules on the physical, social, and emotional impacts experienced by patients living with TD, irrespective of TD severity or underlying psychiatric condition.

• Presented new data from a post-hoc analysis of the Phase 4 KINECT-PRO open-label study confirming that robust rates of symptomatic remission of tardive dyskinesia were achieved with once-daily INGREZZA capsules.

The analysis also showed sustained improvements in patient-reported outcomes among participants who achieved symptomatic remission.

• Presented new data from the Phase 2 SAVITRI™ study, which showed statistically significant and clinically meaningful improvement in depression severity at Day 28 and Day 56 with once-daily oral administration of 1 mg osavampator.

• Announced the Phase 3 study of valbenazine for the adjunctive treatment of schizophrenia did not meet the primary endpoint.

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Net Product Sales

• Initiated and dosed the first patients in a Phase 2 clinical study of NBI-1117570, a dual M1/M4 selective agonist in adults with schizophrenia.

• Presented new real-world evidence demonstrating that adult patients with tardive dyskinesia receiving INGREZZA (valbenazine) capsules showed higher treatment persistence compared to those on AUSTEDO XR (deutetrabenazine).

The findings were presented at the Academy of Managed Care Pharmacy 2026 Annual Meeting in Nashville.

• Presented the first expert consensus recommendations focused on screening, diagnosis and treatment of tardive dyskinesia among older adults in long-term care settings.

The recommendations address persistent gaps in recognizing and managing tardive dyskinesia in this higher-risk population.

Findings were presented at the Society for Post-Acute and Long-Term Care Medical Association (PALTmed) PALTC26 Annual Conference in Anaheim, CA.

• Presented new two-year CRENESSITY data demonstrating durable hormonal control, reduced glucocorticoid exposure and meaningful clinical improvements in pediatric patients with classic congenital adrenal hyperplasia.

The findings were presented at the Pediatric Endocrine Society 2026 Annual Meeting in San Francisco.

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Three Months Ended

September 30, Nine Months Ended

September 30,

( in millions)

(in millions, except per share data)

Revenues $ 814.5 $ 572.6

Operating expenses 621.1 549.0

Operating income 193.4 23.6

Other income (expense) 53.4 (8.9)

Provision for income taxes 48.9 6.8

$ 197.9 $ 7.9

INGREZZA $ 686.6 $ 612.9 $ 1,856.2 $ 1,698.4

Earnings per share, diluted

$ 1.91 $ 0.08

Other 5.2 3.7 13.6 11.0

Total net product sales $ 789.9 $ 616.6 $ 2,035.6 $ 1,709.4

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased net product sales of INGREZZA, driven by total prescriptions on strong patient demand partially offset by lower net price due to new market access investments to support long-term growth, and CRENESSITY, which was launched in the U.S.

as a first-in-class FDA-approved treatment of CAH in December 2024.

Collaboration Revenues

Weighted average common shares outstanding, diluted

Three Months Ended

September 30, Nine Months Ended

September 30,

( in millions)

2025 2024 2025 2024

INGREZZA net product sales

$ 656.9 $ 545.2

CRENESSITY net product sales

Total net product sales

Collaboration revenues 3.5 8.9

Total revenues

$ 814.5 $ 572.6

Total collaboration revenues $ 5.0 $ 5.5 $ 19.4 $ 18.2

Total collaboration revenues for all periods presented primarily reflected royalties earned on AbbVie net sales of elagolix and MTPC net sales of valbenazine.

Net Product Sales

Compared with the comparable period last year, the increase primarily reflected increased net product sales of CRENESSITY, which was launched in the U.S.

as a first-in-class FDA-approved treatment of CAH in December 2024, and INGREZZA, driven by volume growth in total prescriptions and record new prescriptions on strong patient demand, partially offset by a lower net price compared to the first quarter of 2025.

Collaboration Revenues

Collaboration revenues for all periods presented primarily reflected royalties earned on AbbVie net sales of elagolix and Tanabe Pharma Corporation (formerly Mitsubishi Tanabe Pharma Corporation) net sales of valbenazine.

Operating Expenses

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

( in millions)

2025 2024 2025 2024

(dollars in millions) 2026 2025

Cost of revenues $ 13.8 $ 9.2

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased net product sales of INGREZZA and increased royalties payable on net product sales of CRENESSITY.

as a % of total revenues 1.7 % 1.6 %

Compared with the comparable period last year, the increase primarily reflected increased royalties payable on net product sales of CRENESSITY and increased total net product sales.

Research and Development

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

(dollars in millions) 2026 2025

Late stage $ 65.8 $ 35.3

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Total research and development $ 296.2 $ 263.2

as a % of total revenues 36.4 % 46.0 %

Late stage consists of costs incurred for product candidates in Phase 2 registrational studies and all subsequent activities.

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased investment in the Phase 3 programs for osavampator in MDD and direclidine in schizophrenia, partially offset by lower spend related to crinecerfont in CAH.

Compared with the comparable period last year, the increase primarily reflected progression of the Phase 3 programs for osavampator in MDD and direclidine in schizophrenia.

Early Stage .

Early stage consists of costs incurred for product candidates after the approval of an investigational new drug application by the applicable regulatory agency through Phase 2 non-registrational studies.

Compared with the comparable periods last year, the decrease for the third quarter and first nine months of 2025 primarily reflected the successful progression of the Phase 2 program for direclidine in schizophrenia to late-stage in the fourth quarter of 2024 and lower spend on certain early-stage neuropsychiatry programs, partially offset by increased investment in our early-stage muscarinic portfolio.

Compared with the comparable period last year, the increase primarily reflected increased investments in the Phase 1 program for NBIP-01435 in CAH and our early-stage obesity and immunology programs.

Research and Discovery .

Research and discovery consists of costs incurred prior to the approval of an investigational new drug application by the applicable regulatory agency.

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased investment in gene therapy and other preclinical development programs.

Compared with the comparable period last year, the increase primarily reflected continued investments to expand our discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, and expanding our capabilities in biologics (including peptides and antibodies) and gene therapy.

Milestones consists of costs incurred in connection with the achievement of development milestones under collaborative arrangements.

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions)

Nxera Pharma UK Limited

$ — $ 35.0 $ 15.0 $ 50.0

Takeda Pharmaceutical Company Limited

Xenon Pharmaceuticals Inc.

Voyager Therapeutics, Inc.

1.0 0.8 1.5 2.9

Total milestones

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Payroll and Benefits.

Payroll and benefits consists of costs incurred for salaries and wages, payroll taxes, benefits, and stock-based compensation associated with employees involved in research and development activities.

Payroll and benefits consist of costs incurred for salaries and wages, payroll taxes, benefits, and stock-based compensation associated with employees involved in research and development activities.

Stock-based compensation may fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates stock-based grants are issued.

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected higher headcount and increases of $7.2 million and $19.0 million, respectively, in non-cash stock-based compensation expense.

Compared with the comparable period last year, the increase primarily reflected higher headcount to support our expanded discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, and expanding our capabilities in biologics (including peptides and antibodies) and gene therapy.

Facilities and Other.

Facilities and other consists of indirect costs incurred for the benefit of multiple programs, including facility-based expenses (such as rent expense) and other overhead allocations.

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased facility-based expenses related to our new campus facility.

Selling, General, and Administrative

Compared with the comparable period last year, the increase primarily reflected increased facility-based expenses related to our new campus facility.

Acquired In-Process Research and Development (IPR&D)

Three Months Ended

September 30, Nine Months Ended

September 30,

( in millions)

2025 2024 2025 2024

(dollars in millions)

Acquired in-process research and development $ 21.2 $ 0.1

as a % of total revenues 2.6 % — %

Compared with the comparable period last year, the increase reflected increased payments for upfront fees in connection with our collaborations.

Selling, General, and Administrative (SG&A)

Three Months Ended

(dollars in millions)

Selling, general, and administrative $ 318.5 $ 276.5

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected continued investment in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and increases of $5.0 million and $11.2 million, respectively, in non-cash stock-based compensation expense.

In addition, the increase for the first nine months of 2025 was partially offset by decreased impairment charges associated with our vacated legacy campus facilities.

as a % of total revenues 39.1 % 48.3 %

Compared with the comparable period last year, the increase primarily reflected continued investment in our commercial organization, including the recent expansion of our INGREZZA and CRENESSITY sales teams in the first quarter of 2026.

Gain on Sale of Business, Net of Transaction Costs

Three Months Ended

(dollars in millions)

Gain on sale of business, net of transaction costs

Compared with the comparable period last year, the change reflected a pre-tax gain, net of transaction costs, recognized on the sale of Neurocrine Group Limited in January 2026.

Other Income (Expense)

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2026 2025

1 unchanged sentence

$ 25.3 $ (30.6)

Charges associated with convertible senior notes — — — (138.4)

Investment income and other, net 28.1 21.7

1 unchanged sentence

$ 53.4 $ (8.9)

Compared with the comparable periods last year, the change for the third quarter and first nine months of 2025 primarily reflected prior year charges associated with the convertible senior notes that matured in May 2024 and periodic fluctuations in the fair values of our equity investments.

Compared with the comparable period last year, the change reflected periodic fluctuations in the fair values of our equity investments and increased interest income on our debt security investments.

Provision for Income Taxes

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

(dollars in millions)

Provision for income taxes

$ 82.3 $ 60.5 $ 141.1 $ 85.2

The effective tax rate for the third quarter and first nine months of 2025 and 2024 varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and valuation allowances recorded in certain foreign and domestic state jurisdictions for tax benefits that management cannot conclude that it is more likely than not will be realized in the future.

In addition, the effective tax rate for the third quarter of 2025 reflects increased tax expense related to foreign operations and the enactment of the One Big Beautiful Bill Act (OBBBA).

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

Net income $ 209.5 $ 129.8 $ 324.9 $ 238.2

Compared with the comparable periods last year, the change for the third quarter and first nine months of 2025 primarily reflected increased INGREZZA and CRENESSITY net product sales, continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio, periodic fluctuations in milestones expense associated with the achievement of development milestones under collaborative arrangements, periodic fluctuations in the fair values of our equity investments, and prior year charges associated with the convertible senior notes that matured in May 2024.

Effective tax rate 19.8 % 46.3 %

For the first quarter of 2026, the effective tax rate varied from the federal and state statutory rates primarily due to foreign tax effects, including the impact of net CFC tested income (NCTI) (formerly referred to as global intangible low-taxed income (GILTI)), credits generated for research activities, certain nondeductible expenses, and state income tax effects including fluctuations in state effective tax rates.

For the first quarter of 2025, the effective tax rate varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and losses in foreign and domestic jurisdictions for which no tax benefit was recorded as management cannot conclude that it is more likely than not that the tax benefit of such losses will be realized in the future.

Liquidity and Capital Resources

5 unchanged sentences

However, we cannot provide assurance that adequate funding will be available on terms acceptable to us, if at all.

In April 2026, we entered into the Merger Agreement to acquire Soleno for approximately $2.9 billion in cash, as described above.

The transaction is expected to close in the second quarter of 2026, subject to certain customary closing conditions.

If the proposed acquisition is consummated, we expect to fund the transaction with cash on hand and available investments, which would significantly reduce our cash, cash equivalents and investment balances.

We also plan to optimize our capital structure by taking on a modest amount of pre-payable debt to preserve additional liquidity.

Information Regarding Our Financial Condition

(in millions) September 30,

(in millions) March 31,

2026 December 31,

5 unchanged sentences

Information Regarding Our Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2026 2025

2 unchanged sentences

Cash flows from financing activities (86.1) (117.9)

Effect of exchange rate changes on cash and cash equivalents — 0.3

Change in cash, cash equivalents, and restricted cash $ (446.5) $ (38.9)

Cash Flows from Operating Activities

Compared with the comparable period last year, the increase primarily reflected increased net product sales of INGREZZA and CRENESSITY, partially offset by continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio.

The increase in accounts receivable was driven by higher total gross product sales.

The increase in accounts payable and accrued liabilities was driven by higher revenue-related reserves for discounts and allowances attributed to higher gross product sales combined with expanded formulary access for INGREZZA.

In addition, the increase in income tax assets and liabilities primarily related to timing of foreign tax expense recognition, partially offset by the federal tax benefit on current income taxes payable from the enactment of the OBBBA.

Compared with the comparable period last year, the increase primarily reflected increased net product sales of INGREZZA and CRENESSITY, partially offset by continued investments in our commercial organization, including the recent expansion of our INGREZZA and CRENESSITY sales teams in the first quarter of 2026, and expanded pre-clinical and clinical portfolio.

The increase in accounts receivable was primarily driven by higher total gross product sales, and to a lesser extent, timing of collections at the end of the first quarter of 2026.

The increase in income tax assets and liabilities was primarily due to timing of income tax payments.

Cash Flows from Investing Activities

Periodic fluctuations in cash flows from investing activities primarily reflected timing differences related to our purchases, sales, and maturities of debt security investments and changes in our portfolio-mix.

Cash flows from investing activities for the first quarter of 2026 also reflected $63.2 million in cash proceeds from our sale of Neurocrine Group Limited in January 2026.

Cash Flows from Financing Activities

Compared with the comparable period last year, the change reflected $167.7 million in repurchases of our common stock during the first nine months of 2025 under the $500.0 million 2025 Repurchase Program that was authorized by our Board of Directors in February 2025, decreased proceeds from issuances of our common stock, and $308.8 million in cash payments to settle the convertible senior notes in the second quarter of 2024.

Compared with the comparable period last year, the change reflected decreased repurchases of our common stock under the $500.0 million 2025 Repurchase Program that was authorized by our Board of Directors in February 2025, decreased proceeds from issuances of our common stock, and increased taxes paid related to net share settlement of equity awards (shares withheld for taxes).

Material Cash Requirements

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Refer to Note 7 to the condensed consolidated financial statements for more information on our significant collaboration and license agreements.

In April 2026, we entered into the Merger Agreement to acquire Soleno for approximately $2.9 billion in cash, as described above.

The transaction is expected to close in the second quarter of 2026, subject to certain customary closing conditions.

We intend to fund the transaction with cash on hand.

Share Repurchase Program

1 unchanged sentence

The 2025 Repurchase Program is in addition to the $300.0 million 2024 Repurchase Program that was announced in October 2024 and completed in February 2025.

Under the 2025 Repurchase Program, we repurchased 1.5 million shares on the open market for a cost of $167.7 million during the first nine months of 2025.

As of September 30, 2025, we had $332.3 million remaining under the 2025 Repurchase Program.

Under the 2025 Repurchase Program, we repurchased 0.4 million shares on the open market for a cost of $56.0 million during the first quarter of 2026.

As of March 31, 2026, we had $276.3 million remaining under the 2025 Repurchase Program.

Critical Accounting Policies and Estimates

3 unchanged sentences

The primary objective of our investment activities is to preserve principal and maintain liquidity.

If a 1% unfavorable change in interest rates were to have occurred on September 30, 2025, it would not have had a material effect on the fair value of our investment portfolio as of that date.

If a 1% unfavorable change in interest rates were to have occurred on March 31, 2026, it would not have had a material effect on the fair value of our investment portfolio as of that date.

Forward-Looking Statements

12 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 2. Management’s Discussion and Analysis