What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 133 added, 112 removed, 233 unchanged (51% of the section changed)

6 unchanged sentences

Such omitted discussion can be found under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” located in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025, for reference to discussion of the fiscal year ended December 31, 2023, the earliest of the three fiscal years presented.

Omnicell, a leader in transforming the pharmacy and nursing care delivery model, is committed to solving the critical challenges inherent in medication management and elevating the role of clinicians within healthcare as an essential component of care delivery.

Omnicell, a leading healthcare technology provider focused on empowering autonomous medication management, is committed to solving the critical challenges inherent in medication management and elevating the role of clinicians within healthcare as an essential component of care delivery.

Omnicell is focused on helping its customers define and deliver a cost-effective medication management strategy designed to equip and empower pharmacists and nurses to focus on patient care rather than administrative tasks, and to drive improved clinical, operational, and financial outcomes across all care settings.

We are doing this with an industry-leading medication management infrastructure which includes robotics and smart devices, software workflows, expert services, and operational and optimization analytics.

This comprehensive set of solutions provides the critical foundation for customers to realize the Autonomous Pharmacy, an industry-wide vision defined by pharmacy leaders for improving operational efficiencies and ultimately targeting zero-error medication management.

We are doing this with an industry-leading medication management infrastructure which includes storage and dispensing automation powered by an intelligence ecosystem.

Our comprehensive set of solutions provides the critical foundation for customers to realize the Autonomous Pharmacy, an industry-wide vision defined by pharmacy leaders for improving operational efficiencies and ultimately targeting zero-error medication management alongside 5 other outcomes laid out in the Autonomous Pharmacy framework.

Omnicell solutions are helping healthcare facilities worldwide to uncover cost savings, improve labor efficiency, establish new revenue streams, enhance supply chain control, support compliance, and move closer to the industry-defined vision of the Autonomous Pharmacy.

We sell our product and consumable solutions together with related service offerings.

We sell our hardware, software, and consumable solutions together with related service offerings.

Revenues generated in the United States represented 90% of our total revenues for the year ended December 31, 2025.

Over the past several years, our business has expanded from a single-point solution to a platform of products and services that will help further advance the industry-defined vision of the Autonomous Pharmacy.

Our business has expanded from a single-point solution to a platform of products and services that will help further advance the industry-defined vision of the Autonomous Pharmacy.

This expansion has resulted in larger deal sizes across multiple products, services, and implementations for customers and, we believe, more comprehensive, valuable, and enduring relationships.

As our business evolves, we continue to evaluate the metrics and methods we use to measure the success of our business.

We utilize bookings as an indicator of the success of our business.

During 2024, we defined bookings generally as:

(i) the value of non-cancelable contracts for our connected devices, software products, and SaaS and Expert Services (although, for those SaaS and Expert Services contracts without a minimum commitment, bookings only include the amount of revenue that has been recognized once the services have been provided);

and (ii) for our consumables, the value of orders placed through our Omnicell Storefront online platform or through written or telephonic orders.

We typically exclude technical services and other less significant items ancillary to our products and services, such as freight revenue, from bookings.

In addition, dependent upon counterparty or credit risk, which is evaluated at the time of contract signing, for a given multi-year subscription contract we may reduce the portion of the contractual commitment booked at a given time.

As noted, the portfolio of products, solutions, and services we offer has evolved.

As a result, the ordering process for certain of our solutions has also evolved.

For example, orders for certain solutions may not include a purchase order.

Connected devices and software license bookings are recorded as revenue upon customer acceptance of the installation or receipt of goods.

Revenues from SaaS and Expert Services bookings are recorded over the contractual term.

Bookings increased by 8%, from $854 million in 2023 to $923 million in 2024, primarily driven by XT Series upgrades as we complete the XT Series upgrade cycle, as well as better than expected bookings of XTExtend, a core component of the multi-year XT Amplify innovation program.

We generally provide installation planning and consulting as part of most connected device product sales, which is typically included in the initial price of the solution.

To help ensure the maximum availability of our systems, our customers typically purchase technical services contracts (support and maintenance) in increments of one to five years.

In addition to connected device product sales, we provide a range of services to our customers.

We also provide comprehensive service offerings such as Central Pharmacy Dispensing Service (service portion), IV Compounding Service (service portion), EnlivenHealth, Specialty Pharmacy Services, 340B solutions, Inventory Optimization Service, and other software solutions, which typically are provided over two to seven years.

Global Trade Relations

In recent years, the U.S.

government has advocated for greater restrictions on trade generally.

For example, in 2025, the U.S.

imposed tariffs on a wide variety of products manufactured in multiple foreign jurisdictions, including China, Mexico, and Malaysia.

In response to the ongoing changes in tariffs, several foreign countries have imposed reciprocal tariffs on goods manufactured in the United States.

These tariff rates have fluctuated and may continue to fluctuate going forward.

In an effort to address these actions, we have implemented various mitigation measures, including dual-sourcing of components and nearshoring manufacturing.

While these actions have effectively mitigated some of the impact of these costs, there can be no assurance that we will be able to offset future increased costs or other adverse impacts.

Although we continue to work to mitigate the impact of current or potential tariffs, we may incorrectly anticipate outcomes, forgo or pass up business opportunities, or fail to appropriately adapt or manage our business strategies in response to these changes.

As a result of these factors , we may experience direct and indirect adverse effects on our business, operating results, cash flow, or financial condition.

In addition, on February 20, 2026, the U.S.

Supreme Court struck down certain tariffs imposed under the International Emergency Powers Act.

It is unclear at this time what impact this decision will have on our business or future operating results, including whether we will be able to obtain refunds of amounts previously collected for such tariffs or the level of replacement tariffs the current U.S.

Administration may impose through other means.

Product Bookings and Annual Recurring Revenue

Starting in 2025, we will utilize product bookings and Annual Recurring Revenue (each as further described below) as key performance metrics for our business.

We view product bookings as an indicator of the success of certain portions of our business that generate nonrecurring revenue and Annual Recurring Revenue as an indicator of the success of the portion of our business that generates recurring revenues.

The definitions and descriptions included below are relevant to these key performance metrics that will replace our prior bookings metric in 2025 and beyond.

We utilize product bookings and Annual Recurring Revenue (“ARR”), each as further described below, as key performance metrics for our business.

We view product bookings as an indicator of the success of certain portions of our business that generate nonrecurring revenue and we view ARR as an indicator of the success of the portions of our business that generate recurring revenues.

The definitions and descriptions included below are relevant to these key performance metrics.

Product Bookings

4 unchanged sentences

Connected devices and software license bookings are recorded as revenue upon customer acceptance of the installation or receipt of goods.

Using the new definition of the metric, product bookings were $558 million as of December 31, 2024.

As part of most connected device product sales, we generally provide installation planning and consulting, which is typically included in the initial price of the solution.

Product bookings were $535 million and $558 million during the years ended December 31, 2025 and 2024, respectively.

Annual Recurring Revenue

We consider revenues generated from our consumables, technical services, and SaaS and Expert Services to be recurring revenues.

For the portions of our business which generate recurring revenues, we utilize Annual Recurring Revenue (“ARR”) as a key metric to measure our progress in growing our recurring revenue business.

For the portions of our business which generate recurring revenues, we utilize ARR as a key metric to measure our progress in growing our recurring revenue business.

We define ARR at a measurement date as the revenue we expect to receive from our customers over the course of the following year for providing them with products or services.

4 unchanged sentences

ARR is generally calculated based on revenues received in the most recent quarter and changes to expected revenues where solutions were added to or removed from the install or customer base in the quarter.

Revenues from technical services and SaaS and Expert Services are recorded ratably over the service term.

Revenues from technical services and SaaS and Expert Services are generally recorded ratably over the service term.

As part of our SaaS and Expert Services offerings, we provide a range of services to our customers including Central Pharmacy Dispensing Service (service portion), IV Compounding Service (service portion), EnlivenHealth, Specialty Pharmacy Services, 340B solutions, Inventory Optimization Service, and other software solutions, which typically are provided over two to seven years.

In addition, to help ensure the maximum availability of our systems, our customers typically purchase technical services contracts (support and maintenance) in increments of one to five years.

Revenue from consumables are recorded when the product has shipped and title has passed.

Our measure of ARR may be different than that used by other companies.

Because ARR is based on expected future revenue, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods.

Because ARR is based on expected future revenue, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting

ARR should not be viewed as a substitute for revenues.

Under the new metric, ARR was $580 million as of December 31, 2024.

ARR was $636 million and $580 million as of December 31, 2025 and 2024, respectively.

The following table summarizes each revenue category:

1 unchanged sentence

Income Statement Classification

Included in Bookings

(through 2024) Included in Product Bookings

(2025 onwards) Included in ARR

(2025 onwards)

Included in Product Bookings Included in ARR

Connected devices, software licenses, and other

4 unchanged sentences

(2) Includes Central Pharmacy Dispensing Service (service portion), IV Compounding Service (service portion), EnlivenHealth, Specialty Pharmacy Services, 340B solutions, Inventory Optimization Service, and other software solutions.

(3) For those SaaS and Expert Services contracts without a minimum commitment, bookings only include the amount of revenue that has been recognized once the services have been provided.

Operating Segments

1 unchanged sentence

Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer.

The CODM allocates resources and evaluates the performance of Omnicell at the consolidated level using our consolidated net income.

In addition, the CODM is provided with certain segment assets, primarily those that impact liquidity, as well as certain significant expenses.

significant operating decisions are based upon an analysis of Omnicell as one operating segment, which is the same as our reporting segment.

The CODM allocates resources and evaluates the performance of Omnicell at the consolidated level using our consolidated net income (loss).

In addition, the CODM is provided with certain segment assets and liabilities, primarily those that impact liquidity, as well as certain significant expenses.

All significant operating decisions are based upon an analysis of Omnicell as one operating segment, which is the same as our reporting segment.

Our full-time employee headcount was approximately 3,580 on December 31, 2025.

1 unchanged sentence

In 2024, the United States spent $806 billion on prescription drugs, a 10.2% increase from 2023.

This was the largest annual spending increase in 20 years and impacted patients in virtually all settings of care.

We believe there are significant challenges facing the practice of pharmacy today including, but not limited to, budget constraints, increased healthcare worker turnover rates, labor shortages, drug shortages, drug diversion, manual and error-prone processes, complex compliance requirements, and limited inventory visibility.

Each of these challenges may lead to poor medication management outcomes including, but not limited to, medication errors, adverse drug events, lack of patient adherence, and medication waste.

We believe there are significant challenges facing the practice of pharmacy today.

These challenges include, but are not limited to, budget constraints and acute workforce shortages, where 88% of hospitals report technician deficits and 92% lack sufficient sterile compounding expertise.

In addition, health systems face rising liability related to drug diversion, with a 61% increase in the average number of investigations per hospital since the beginning of 2023.

We also recognize that these challenges may impact the timing of contracting for, or implementation of, our products, solutions, or services.

However, we believe that over time these significant challenges to the practice of pharmacy will drive demand for increased automation, visibility, insights, and improved medication management outcomes that our solutions are designed to enable.

However, we believe that over time these significant challenges facing pharmacists will drive demand for increased automation, visibility, insights, and improved medication management outcomes that our solutions are designed to enable.

Because of this, we believe that our solutions are well-positioned to address the evolving needs of healthcare institutions and therefore present opportunities for long-term growth.

In an effort to address these challenges and deliver solutions to help drive positive medication management outcomes, we continue to make significant investments in our research and development efforts to further advance the industry-defined vision of the Autonomous Pharmacy.

Furthermore, we believe a combination of robotics and smart devices, software workflows, expert services, and operational and optimization analytics is needed in every care setting where medications are managed.

We are focused on delivering solutions to help our customers realize the industry-defined vision of the Autonomous Pharmacy and drive positive medication management outcomes with outstanding customer experience through a mature channel in four market categories:

Furthermore, we believe a combination of dispensing automation and an intelligence ecosystem is needed in every care setting where medications are managed.

We are focused on delivering solutions to help our customers realize the industry-defined vision of the Autonomous Pharmacy and driving positive medication management outcomes with superior customer experience in two core market categories through:

• Hospital and Health System Solutions:

This category enables the end-to-end medication process across the entire continuum of care.

It unifies Central Pharmacy automation, robotics, and IV sterile compounding with Point of Care automated dispensing in Nursing Units and Operating Room/Procedural areas.

From the loading dock to the bedside, this is designed to provide for medication safety, availability, and workflow efficiency.

This category also supports Consolidated Pharmacy Service Center operations.

• Points of Care.

As a market leader, we expect to continue expansion into this product market as customers increase the use of our dispensing systems in more areas within their hospitals and increasingly in ambulatory care settings.

Macroeconomic trends in our target market continue to improve as health system margins and volumes increase and stabilize in the post-pandemic environment.

This positive trajectory is expected to drive increased demand for system modernization through automation, software, and analytics.

We are seeing customers seek to maximize the value of existing automated dispensing system investments and continue to invest in next-generation enhancements and solutions for points of care.

We believe that customers will upgrade their current installed base over time as we deliver these new solutions to market.

We also believe there is an opportunity for us to expand this offering and define a new standard for dispensing systems in ambulatory settings.

We believe our current solutions for Points of Care and new innovations and services will continue to help customers drive improved clinical and financial outcomes.

• Central Pharmacy and IV Compounding.

This market represents the beginning of the medication management process in acute care settings, and we believe it is a significant automation opportunity for high volumes of manual, repetitive, and error-prone processes that are often common in pharmacies today.

Manual medication dispensing processes are usually labor intensive, error-prone, and may lead to excess medication waste and expirations for our healthcare partners.

Automating the central pharmacy dispensing process should enable customers to reallocate pharmacy labor, enhance dispensing accuracy and patient safety, and reduce medication waste and expirations.

Likewise, the manual compounding of sterile IV preparations can be error-prone and create significant patient safety risks, and outsourcing sterile IV compounding could lead to increased medication costs and lack of access to needed medications due to an inability to source medications when they are required.

As a result, we believe IV automation provides a significant opportunity to enhance patient safety and reduce costs.

We anticipate that these technology-enabled services will become more critical as health systems continue to face labor shortages, increased financial pressure, and supply chain disruptions.

As a market leader, we anticipate continued expansion into this product market as customers increasingly utilize our dispensing systems in more areas within hospitals and ambulatory care settings.

The 2025–2028 healthcare landscape, however, faces significant fiscal headwinds driven by sweeping changes in health policy, specifically the One Big Beautiful Bill Act (“OBBBA”), which is expected to result in a $910 billion Medicaid spending reduction across states.

Coupled with rising input costs from tariffs and acute labor shortages, these pressures are likely to further compress operating margins.

We believe this financial strain makes the status quo unsustainable, which we anticipate compelling health systems to focus on capital efficiency and operational resilience through accelerated investments in pharmacy modernization, especially automation to address labor shortages and advanced analytics to manage rising costs of drug diversion and non-adherence.

As hospitals navigate this liquidity challenge, we expect a critical shift in purchasing behavior from traditional capital expenditures to flexible payment models, such as leasing, subscriptions, and “as-a-service” structures, enabling institutions to adopt essential regulatory compliance and safety technologies while preserving operating cash flow.

• Central Pharmacy.

This market represents the beginning of medication management in acute care settings.

Given the current environment, we believe there is a significant opportunity for automation as many health systems aim to eliminate manual, repetitive, and error-prone processes to address acute workforce shortages.

With hospitals facing technician shortages and often lacking adequate sterile compounding expertise, we think automating central pharmacy dispensing and compounding is crucial for reallocating limited labor, enhancing patient safety, and enabling compliance with the new Drug Supply Chain Security Act (“DSCSA”) requirements.

Manual compounding of sterile IV preparations poses safety risks and, when outsourced, can increase costs and supply volatility.

Therefore, IV automation offers a key opportunity to standardize sterile workflows, offset the resources currently used for managing drug shortages, and reduce the annual cost of non-optimized medication therapy.

We expect these technology-driven services to become increasingly vital as health systems focus on operational resilience amid severe financial pressures.

• Consolidated Pharmacy Service Center Automation and Robotics.

Health Systems are increasingly realizing savings from a Consolidated Pharmacy Service Center (“CPSC”) model.

The CPSC serves as a strategic hub for centralized inventory management and sterile compounding.

By implementing industrial-grade robotics and carousels at the CPSC, health systems can achieve economies of scale, streamlining the serialized receiving process required for DSCSA compliance before inventory reaches hospitals.

This centralized approach should help preserve margins by optimizing supply chains and reducing waste across the network.

• Outpatient Pharmacy Solutions:

Focused on extending care beyond the hospital walls, this category supports outpatient and retail pharmacy growth.

It combines Specialty Pharmacy and 340B Third-Party Administrator (“TPA”) services, Medication Adherence technologies (automation and consumables), and the EnlivenHealth platform to help drive better clinical outcomes and medication compliance for clinicians and patients.

• Specialty Pharmacy and 340B Program.

We believe that health systems will continue to invest in programs that are intended to improve patient outcomes and drive cost savings by utilizing specialty pharmacies and the federal 340B Drug Pricing Program (the “340B Program”).

The 340B Program allows qualifying hospitals and health systems to stretch federal resources and expand patient access to healthcare by requiring manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to eligible healthcare organizations and covered entities.

Specialty drugs are used for treatment of complex conditions and often require intensive patient management and specialized workflows for dispensing and care coordination.

Specialty medications are projected to account for nearly 60% of U.S.

total spending on medications, with total spending projected to be approximately $420 billion in 2025.

Specialty pharmacies serve as the connection between patients, prescribing physicians, and payers and work to streamline access and adherence to these specialty drugs.

We believe a solution that is designed to help health systems start or optimize

their specialty pharmacy programs and the related pharmaceutical aspects of patient care will help ensure continuity of care and should contribute to the revenue and profitability of those organizations.

We believe that health systems will continue to accelerate investment in programs to improve patient outcomes by utilizing specialty pharmacies and the federal 340B Drug Pricing Program.

The 340B Program allows qualified hospitals to stretch federal resources, a critical capability as the program is on track to exceed $200 billion in gross sales by 2026, surpassing the entire Medicare Part B market.

In 2024, specialty drugs used for treatment of complex conditions constituted the majority (51.7%) of total prescription expenditures.

This sector continues to grow at a higher rate than other drug classes.

However, regulatory pressures are intensifying with site-neutral payment cuts.

Specialty pharmacies serve as the connection between patients, providers, and payers to streamline access and adherence.

We believe a solution designed to help health systems optimize their Health System-Owned

Specialty Pharmacy (“HSSP”) and navigate these compliance-complexities will help ensure continuity of care.

We believe that a fully optimized specialty pharmacy operation represents one of the largest economic opportunities for hospitals and health systems.

• Ambulatory Care.

We believe ambulatory care, especially the retail and institutional market, represents a significant opportunity as healthcare evolves.

Retail pharmacies are expected to fill 4.98 billion prescriptions in 2025 and grow at a compound annual growth rate of around 7.1%, which would result in an approximate $1.2 trillion market valuation by 2032.

• Institutional Pharmacy.

institutional pharmacy industry provides closed-door medication dispensing, clinical support, and medication adherence services for long-term care (“LTC”), correctional, rehabilitation and behavioral health, and hospice facilities.

The market size of the institutional pharmacies industry in the U.S.

is $24 billion with 1,100 businesses servicing this sector and characterized by a high concentration in national operators.

LTC facilities comprise skilled nursing facilities, assisted living communities, senior living centers, and home and community-based care settings.

LTC pharmacies typically operate under more stringent regulatory, packaging, and labor requirements than retail pharmacies, which may result in structurally higher operating costs.

As a result of projected demographic aging and the increasing complexity of managing chronic disease across LTC populations, we expect market demand to continue to rise.

The LTC industry is currently undergoing a transition driven by reimbursement pressures, regulatory expansion, and workforce shortages.

Legislative and pricing reforms, including updates to Medicare Part D, have increased financial strain on smaller LTC providers, which we believe will accelerate a shift toward centralized, automation-enabled fulfillment models that are designed to improve efficiency, standardize quality, and support compliance with evolving documentation and oversight requirements.

Through our outpatient pharmacy solutions, we also serve adjacent outpatient institutional markets, including correctional facilities’ pharmacy providers.

Additionally, we provide pharmacy services to individuals with intellectual and developmental disabilities (“IDD”), a market currently experiencing rising demand due to increased prevalence.

IDD pharmacy services require specialized packaging, adherence technologies, and close coordination with caregivers and community-based support organizations.

prescription dispensing revenues across retail, mail-order, long-term care, and specialty pharmacies reached approximately $683 billion in 2024, up 9% from 2023, a surge driven primarily by the rapid adoption of GLP-1 agonists and specialty immunotherapies rather than volume alone.

Additionally, the shift of outpatient care from hospitals and physician offices to other more convenient settings, such as retail pharmacies and the home, continues to be a growing trend.

24 unchanged sentences

These judgments have been applied consistently for all periods presented.

Changes in the assumptions or judgements used in determining the standalone selling price or timing of revenue recognition could impact the amount and timing of revenue reported in a particular period.

Changes in the assumptions or judgments used in determining the standalone selling price or timing of revenue recognition could impact the amount and timing of revenue reported in a particular period.

Inventories are stated at the lower of cost, computed using the first-in, first-out method, and net realizable value.

3 unchanged sentences

If inventory is written down, a new cost basis is established that cannot be increased in future periods.

Changes in our

assumptions, judgments, or estimates could impact future financial results if additional write-downs for excess and obsolete inventories are needed.

Changes in our assumptions, judgments, or estimates could impact future financial results if additional write-downs for excess and obsolete inventories are needed.

Accounting for Income Taxes

2 unchanged sentences

We assess the likelihood of the realization of deferred tax assets and the need for a valuation allowance in each reporting period.

As of December 31, 2025, we do not maintain a valuation allowance against deferred tax assets based on our assessment that it is more likely than not these assets will be realized.

In reaching our conclusion, we evaluate certain relevant criteria as provided in ASC 740, Income Taxes, including having sufficient taxable income of the appropriate character in future years.

Our judgment regarding future taxable income may change due to future changes in the company’s profitability due to market conditions, changes in U.S.

Our judgment regarding future taxable income may change due to future changes in the company’s profitability as a result of changes in market conditions, changes in U.S.

or international tax laws, and other factors.

Changes in judgment may require material adjustments to deferred tax assets, which may result in an increase or decrease to our income tax provision in the period of adjustment.

For additional details, refer to Note 17, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

As a global company, we use significant judgment to calculate and provide for income taxes in each of the tax jurisdictions in which we operate.

1 unchanged sentence

Some of these uncertainties arise due to transfer pricing for transactions with our subsidiaries and the determination of tax nexus.

We also monitor global tax developments, including the OECD Pillar Two Framework, which may impact our effective tax rate in future periods.

We account for uncertain tax positions in accordance with ASC 740.

2 unchanged sentences

The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of ASC 740 and complex tax laws.

Due to the inherent uncertainties in tax regulations and the complexity of our global operations, it is impracticable to provide a detailed quantitative analysis of our uncertain tax positions.

Although we believe our estimates are reasonable, there is no guarantee that the final tax outcome will not differ from what is reflected in our historical income tax provisions, returns, and accruals.

1 unchanged sentence

Recently Issued Authoritative Guidance

Refer to “Recently Issued Authoritative Guidance” in Note 1, Organization and Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position, and cash flows.

issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position, and cash flows.

RESULTS OF OPERATIONS

9 unchanged sentences

Product revenues represented 56% and 57% of total revenues for the years ended December 31, 2025 and 2024, respectively.

Product revenues decreased by $78.1 million, primarily due to a challenging environment through a significant portion of 2024 for some of our health system customers and the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle.

Product revenues increased by $35.2 million, primarily due to the increase in revenues from our XTExtend offering, partially offset by lower volumes from our XT Series automated dispensing systems business due to the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle, as well as the decrease in revenues from products related to our Central Pharmacy Dispensing Service offering.

Service revenues represented 44% and 43% of total revenues for the years ended December 31, 2025 and 2024, respectively.

Services and other revenues include revenues from technical services and SaaS and Expert Services offerings.

Service revenues increased by $43.2 million, primarily due to an increase of $12.4 million in technical services revenues as a

result of growth in our installed customer base and the impact of pricing actions, as well as an increase of $30.8 million in SaaS and Expert Services revenues due to continued customer demand.

Our international sales represented 9% and 12% of total revenues for the years ended December 31, 2024 and 2023, respectively, and are expected to be affected by foreign currency exchange rate fluctuations.

Service revenues include revenues from technical services and SaaS and Expert Services offerings.

Service revenues increased by $37.4 million, due to an increase of $21.9 million in technical services revenues primarily as a result of growth in our installed customer base and the impact of pricing actions.

The increase is also driven by an increase of $15.6 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering, partially offset by lower revenues from the EnlivenHealth portfolio.

Our international sales represented 10% and 9% of total revenues for the years ended December 31, 2025 and 2024, respectively.

In future periods, we expect our revenues to be affected by foreign currency exchange rate fluctuations.

We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates.

Our ability to grow revenues is dependent on our ability to continue to obtain orders from customers, which may be dependent upon customers’ capital equipment budgets and/or capital equipment approval cycles, our ability to produce quality products and consumables to fulfill customer demand, the volume of installations we are able to complete, our ability to meet customer needs by providing a quality installation experience, our ability to develop new or enhance existing solutions, and our flexibility in workforce allocations among customers to complete installations on a timely basis.

The timing of our product revenues for equipment is primarily dependent on when our customers’ schedules and/or staffing levels allow for installations.

Our ability to grow product and service revenues is dependent on our ability to continue to obtain orders from customers, including contract renewals, which may be dependent upon customers’ capital equipment budgets and/or capital equipment approval cycles, our ability to produce quality products and consumables to fulfill customer demand, the volume of implementations we are able to complete, our ability to meet customer needs by providing a quality implementation experience and solutions that meet expected service levels, our ability to develop new or enhance existing solutions, and our flexibility in workforce allocations among customers to complete implementations on a timely basis.

The timing of our revenues is primarily dependent on when our customers’ schedules and/or staffing levels allow for implementations.

Cost of Revenues and Gross Profit

15 unchanged sentences

Gross margin 42% 42%

Cost of revenues for the year ended December 31, 2024 compared to the year ended December 31, 2023 decreased by $9.0 million, primarily driven by a $31.1 million decrease in cost of product revenues, partially offset by a $22.0 million increase in cost of service revenues.

The decrease in cost of product revenues was primarily driven by the decrease in product revenues of $78.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease in cost of product revenues has not decreased proportionally with the decrease in product revenues for the year ended December 31, 2024, primarily due to the decrease in revenues of higher margin products as well as the impact of certain fixed costs, such as labor and overhead.

In addition, the decrease in cost of product revenues was partially offset by $5.4 million of inventory write-down charges related to the Company’s Medimat Robotic Dispensing System (“RDS”) product line wind down incurred during the year ended December 31, 2024 and an increase of $2.9 million of restructuring costs for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase in cost of service revenues was primarily driven by the increase in service revenues of $43.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The overall decrease in gross margin primarily relates to lower product revenues for the year ended December 31, 2024 compared to the year ended December 31, 2023 whereas the decrease in cost of product revenues has not decreased proportionally with the decrease in product revenues, primarily due to the decrease in revenues of higher margin products as well as the impact of certain fixed costs, such as labor and overhead.

The decrease in cost of product revenues is partially offset by inventory write-down charges related to the RDS product line wind down and an increase in restructuring costs incurred during the year ended December 31, 2024.

Cost of revenues for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $40.2 million, primarily driven by a $44.0 million increase in cost of service revenues, partially offset by a $3.9 million decrease in cost of product revenues.

The decrease in cost of product revenues for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by the impact of more favorable materials costs as well as favorable impact from product and customer mix during the year ended December 31, 2025 and a decrease of $9.6 million of restructuring costs, including inventory write-down charges, partially offset by an increase in product revenues and the impact of tariffs incurred during the year ended December 31, 2025.

The increase in cost of service revenues was primarily driven by the increase in service revenues of $37.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, including the associated increase in employee-related expenses, an increase in certain non-recurring costs, including software upgrade expenses, and an increase of $4.3 million in restructuring costs.

The overall gross margin remained relatively consistent for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to the impact of more favorable materials costs as well as favorable impact from product and customer mix and a decrease in restructuring costs, including inventory write-down charges, partially offset by the impact of tariffs and an increase in employee-related and certain non-recurring software upgrade expenses.

Our gross profit for the year ended December 31, 2025 was $503.4 million, as compared to $471.0 million for the year ended December 31, 2024.

13 unchanged sentences

Research and development expenses decreased by $1.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was primarily attributed to a decrease of $10.8 million in employee-related expenses primarily as a result of lower headcount and a decrease of $3.4 million in restructuring costs, partially offset by an increase of $3.8 million in cloud hosting services expenses, and an increase of $3.1 million in consulting expenses.

Selling, General, and Administrative .

Selling, general, and administrative expenses decreased by $54.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease was primarily due to a decrease of $23.3 million in employee-related expenses primarily as a result of lower headcount, a decrease of $11.0 million in impairment and abandonment charges of operating lease right-of-use and other assets in connection with restructuring activities of certain leased facilities, a decrease of $8.4 million in restructuring costs, a decrease of $4.1 million in commissions expenses, a decrease of $2.9 million in freight out, and a decrease of $2.2 million in executives transition costs.

Selling, general, and administrative expenses increased by $29.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The increase was primarily due to an increase

of $19.8 million in employee-related expenses, which included an increase of $7.3 million in share-based compensation expense.

The increase in employee-related expenses was primarily due to higher headcount, annual merit increases, and the timing of share-based compensation expense recognition.

The increase in selling, general, and administrative expenses was also attributable to an increase in commissions of $3.9 million, an increase in consulting expenses of $2.6 million, and an increase of $2.7 million in the allowance for credit losses for the year ended December 31, 2025 compared to the year ended December 31, 2024.

Interest and Other Income (Expense), Net.

Interest and other income (expense), net, changed by $10.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by a $12.2 million increase in other income and a $1.7 million increase in other expense.

The increase in other income during the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily attributable to a $7.5 million gain on extinguishment of convertible senior notes and related unwind of note hedges and warrants, as well as higher interest income received due to higher interest rates and higher cash and cash equivalents balances throughout the majority of the year.

Interest and other income (expense), net, changed by $19.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by a $20.6 million decrease in other income and a $1.5 million decrease in other expense.

The decrease in other income during the year ended December 31, 2025 compared to the year ended December 31, 2024 is primarily attributable to a $7.5 million gain on extinguishment of the 2025 convertible senior notes and related unwind of note hedges and warrants during the year ended December 31, 2024, as well as lower interest income received.

The decrease in interest income received was primarily due to lower interest rates and lower cash and cash equivalents balances following the partial repurchase of the 2025 convertible senior notes in November 2024 and maturity of the remaining 2025 Notes in September 2025, and repurchases of our common stock during the second and third quarters of 2025.

Provision for Income Taxes

4 unchanged sentences

Effective tax rate on earnings 82% 51%

We recorded an income tax expense of $13.1 million on an income before income taxes of $25.6 million, which resulted in a positive effective tax rate of 51% for the year ended December 31, 2024, compared to an income tax expense of $0.3 million on a loss before income taxes of $20.1 million, which resulted in a negative effective tax rate of 1% for the year ended December 31, 2023.

The 2024 annual effective tax rate differed from the statutory tax rate of 21%, primarily due to an unfavorable impact of non-deductible equity compensation charges partially offset by a favorable impact of research and development credits.

We recorded an income tax expense of $9.3 million on an income before income taxes of $11.3 million, which resulted in an effective tax rate of 82% for the year ended December 31, 2025, compared to an income tax expense of $13.1 million on an income before income taxes of $25.6 million, which resulted in an effective tax rate of 51% for the year ended December 31, 2024.

The 2025 annual effective tax rate differed from the statutory tax rate of 21%, primarily due to the unfavorable impact of state taxes and non-deductible equity compensation charges, partially offset by a favorable impact of research and development credits.

Refer to Note 17, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

2 unchanged sentences

All of our cash and cash equivalents are invested in bank accounts and money market funds held in sweep and asset management accounts with financial institutions of high credit quality.

As of December 31, 2025, a substantial portion of the Company’s cash and cash equivalents were held with a limited number of financial institutions and money market funds, which may expose the Company to concentration risk in the event of a failure or adverse condition affecting those entities.

Our cash position and working capital at December 31, 2025 and 2024 were as follows:

2 unchanged sentences

Working capital $ 203,460 $ 219,815

$ 219,815 $ 559,779

(1) The decrease in working capital as of December 31, 2024 was partially due to the classification of our convertible senior notes as a current rather than long-term liability.

Refer to Note 11, Convertible Senior Notes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

Our ratio of current assets to current liabilities was 1.4:1 and 2.5:1 at December 31, 2024 and 2023, respectively.

Our ratio of current assets to current liabilities was 1.4:1 at both December 31, 2025 and 2024.

Sources of Cash

1 unchanged sentence

On November 15, 2019, Omnicell, Inc.

entered into an Amended and Restated Credit Agreement (as amended, the “Prior A&R Credit Agreement”) with the lenders from time to time party thereto, Wells Fargo Securities, LLC, Citizens Bank, N.A., and JPMorgan Chase Bank, N.A., as joint lead arrangers, and Wells Fargo Bank, National Association, as administrative agent.

The Prior A&R Credit Agreement provided for (a) a five-year revolving credit facility of $500.0 million (the “Prior Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to $250.0 million (the “Prior Incremental Facility”).

22 unchanged sentences

We may also use cash for potential acquisitions and acquisition-related activities, as well as repurchases of our common stock.

In addition, we may also use a portion of our cash as we consider various options related to our outstanding debt.

The 2016 Repurchase Program has a total of $2.7 million remaining for future repurchases as of December 31, 2024, which may result in additional use of cash.

There were no stock repurchases during the year ended December 31, 2024.

During the year ended December 31, 2025, we repurchased approximately 2,523,000 shares of our common stock under the 2016 and 2025 repurchase programs at an average price of $30.74 per share for an aggregate purchase price of approximately $77.6 million, which completed the 2016 Repurchase Program and substantially completed the 2025 Repurchase Program.

Refer to Note 16, Stock Repurchase Programs , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

In November 2024, we completed a partial repurchase of $400.0 million aggregate principal amount of the 2025 Notes for approximately $391.0 million in cash.

The 2025 Notes matured on September 15, 2025 and we repaid the remaining principal balance of $175.0 million in cash.

Refer to Note 11, Convertible Senior Notes , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

In connection with the issuance of the 2029 Notes, in November 2024, we entered into convertible note hedge transactions and used approximately $40.3 million of the net proceeds from the offering to pay the cost of the convertible note hedges.

Based on our current business plan and backlog, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, cash generated from the exercise of employee stock options and purchases under our Employee Stock Purchase Plan (“ESPP”), along with the availability of funds under the Current Revolving Credit Facility will be sufficient to meet our cash needs for working capital, capital expenditures, potential acquisitions, outstanding debt, and other contractual obligations for at least the next twelve months.

Based on our current business plan and backlog, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, cash generated from the exercise of employee stock options and purchases under our Employee Stock Purchase Plan (“ESPP”), along with the availability of funds under the Current Revolving Credit Facility will be sufficient to meet our cash needs for working capital, capital expenditures, potential acquisitions, and other contractual obligations for at least the next twelve months.

For periods beyond the next twelve months, we also anticipate that our net operating cash flows plus existing balances of cash and cash equivalents will suffice to fund the growth of our business.

10 unchanged sentences

We expect cash from our operating activities to fluctuate in future periods as a result of a number of factors, including the timing of our billings and collections, our operating results, and the timing of other liability payments.

Net cash provided by operating activities was $127.3 million for the year ended December 31, 2025, primarily consisting of operating inflows of $135.6 million and unfavorable working capital movements of $8.3 million.

Operating inflows consisted of net income of $2.1 million, adjusted for non-cash items of $133.6 million, which consisted primarily of depreciation and amortization expense of $78.8 million, share-based compensation expense of $44.5 million, and amortization of operating lease right-of-use assets of $7.8 million.

The unfavorable working capital was primarily due to a decrease in accrued liabilities of $19.0 million primarily due to a decrease in taxes payable and rebate liabilities, a decrease in operating lease liabilities of $11.7 million, an increase in inventories of $11.2 million to support production requirements, including advanced purchases of certain components, as well as the impact of tariffs, an increase in investment in sales-type leases of $10.2 million primarily due to the acceptance of certain SaaS and Expert Services products under sales-type lease arrangements, a decrease in accounts payable of $9.3 million and an increase in prepaid expenses of $7.8 million.

These cash outflows were partially offset by a decrease in accounts receivable and unbilled receivables of $41.4 million primarily due to the timing of billings, shipments, and collections and an increase in deferred revenues of $16.4 million due to the timing of billings and customers’ installation schedules.

Net cash provided by operating activities was $187.7 million for the year ended December 31, 2024, primarily consisting of operating inflows of $129.4 million and favorable working capital movements of $58.3 million.

2 unchanged sentences

These cash inflows were partially offset by a decrease in operating lease liabilities of $10.7 million, an increase in investment in sales-type leases of $10.4 million primarily due to the acceptance of certain SaaS and Expert Services products under sales-type lease arrangements, and an increase in accounts receivable and unbilled receivables of $5.0 million primarily due to the timing of billings, shipments, and collections.

Net cash provided by operating activities was $181.1 million for the year ended December 31, 2023, primarily consisting of operating inflows of $137.4 million and favorable working capital movements of $43.7 million.

Operating inflows consisted of net loss of $20.4 million, adjusted for non-cash items of $157.8 million, which consisted primarily of depreciation and amortization expense of $87.3 million, share-based compensation expense of $55.3 million, impairment and abandonment of operating lease right-of-use assets related to facilities of $10.0 million, amortization of operating lease right-of-use assets of $8.2 million, and a change in deferred income taxes of $11.0 million.

The favorable working capital was primarily due to a decrease in accounts receivable and unbilled receivables of $49.2 million primarily due to the timing of billings, shipments, and collections, as well as the impacts of lower revenues, a decrease in inventories of $38.0 million primarily due to management of inventory levels to align with the current forecasted demand, an increase in deferred revenues of $24.1 million primarily due to an increase in billings for certain technical service and SaaS and Expert Services offerings, and a decrease in prepaid commissions of $7.1 million.

These cash inflows were partially offset by a decrease in accrued compensation of $21.5 million primarily due to a decrease in the accrual for restructuring initiatives, lower commissions, as well as timing of ESPP purchases, a decrease in accounts payables of $17.5 million primarily due to an overall decrease in spending, as well as timing of payments, a decrease in operating lease liabilities of $10.9 million, an increase in investment in sales-type leases of $10.4 million primarily due to the acceptance of certain SaaS and Expert Services products under sales-type lease arrangements, a decrease in accrued liabilities of $10.3 million, and an increase in other current assets of $6.8 million.

Investing Activities

Net cash used in investing activities was $52.8 million for the year ended December 31, 2024, which consisted of capital expenditures of $36.5 million for property and equipment and $16.3 million for external-use software development costs.

Net cash used in investing activities was $60.4 million for the year ended December 31, 2025, which primarily consisted of capital expenditures of $40.4 million for property and equipment and $17.5 million for external-use software development costs.

Financing Activities

Net cash used in financing activities was $218.3 million for the year ended December 31, 2025, due to the repayment of the remaining principal balance of our 2025 Notes of $175.0 million, repurchases of shares of our common stock of $77.6 million, and $7.7 million in employees’ taxes paid related to restricted stock unit vesting, partially offset by a net change in the customer funds balances of $25.1 million and $16.9 million in proceeds from employee stock option exercises and ESPP purchases.

Net cash used in financing activities was $235.6 million for the year ended December 31, 2024, primarily due to the partial repurchase of $400.0 million of aggregate principal amount of the 2025 Notes for approximately $391.0 million and the net cash used in the purchase of the convertible note hedge and sale of warrants in connection with the 2029 Notes of $15.1 million, partially offset by net proceeds from the issuance of the 2029 Notes of $166.3 million and $13.4 million in proceeds from employee stock option exercises and ESPP purchases.

Net cash provided by financing activities was $23.4 million for the year ended December 31, 2023, primarily due to $23.2 million in proceeds from employee stock option exercises and ESPP purchases and a net change in the customer funds balances of $10.5 million, partially offset by $7.4 million in employees’ taxes paid related to restricted stock unit vesting.

Contractual Obligations

17 unchanged sentences

The amounts under such contracts are included in the table above because we believe that cancellation of these contracts is unlikely and we expect to make future cash payments according to the contract terms or in similar amounts for similar materials.

(3) We issued the 2025 Notes in September 2020 that are due in September 2025 and issued the 2029 Notes in November 2024 that are due in December 2029.

The obligations presented above include both principal and interest these notes.

Although these notes mature in 2025 and 2029, respectively, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met.

(3) We issued the 2029 Notes in November 2024 that are due in December 2029.

The obligations presented above include both principal and interest on these notes.

Although these notes mature in 2029, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met.

Any conversion prior to maturity can result in repayment of the principal amounts sooner than the scheduled repayment as indicated in the table above.

2 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-K

Item 7. Management’s Discussion and Analysis