What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-18 compared with 2025-02-21 · 171 added, 156 removed, 163 unchanged (67% of the section changed)

3 unchanged sentences

Our actual results could differ materially from those discussed in these forward-looking statements.

Factors that could cause or contribute to these differences include those discussed under the headings “Risk Factors” and “Forward-Looking Statements.”

Our mission is to improve the lives of people with diabetes.

Factors that could cause or contribute to these differences include those discussed under the headings “Risk Factors” and “Forward-Looking Statements.” Columns and rows within tables may not add due to rounding.

Amounts have been calculated using actual, non-rounded figures;

accordingly, amounts and percentages may not recalculate, and columns and rows within tables may not add due to rounding.

Our mission is to transform the lives of people with diabetes.

We are primarily engaged in the development, manufacture, and sale of our proprietary Omnipod product platform, a continuous insulin delivery system for people with insulin-dependent diabetes.

The Omnipod platform includes:

the most recent generation Omnipod 5, and its predecessors Omnipod DASH and Classic Omnipod, all of which eliminate the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing.

The Omnipod platform primarily includes our most recent generation Omnipod 5 and its predecessor Omnipod DASH, which eliminate the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing.

Omnipod 5, which builds on our Omnipod DASH mobile platform, is a tubeless automated insulin delivery system that integrates with a CGM to manage blood sugar and is fully controlled by a compatible personal smartphone or Omnipod 5 Controller.

It is indicated for type 1 diabetes and, in the United States, for type 2 diabetes for ages 18 and up.

The CGM is sold separately by third parties.

Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like PDM with color touch screen user interface.

We have been phasing-out Classic Omnipod as we launch Omnipod 5.

The Pod currently integrates with Dexcom, Inc.’s G6 and G7 CGMs and with Abbott Diabetes Care, Inc.’s (“Abbott”) FreeStyle Libre 2 Plus sensor (“Libre 2 Plus”) in various markets.

Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like PDM with a color touch screen user interface.

Our financial objective is to sustain profitable growth.

To achieve this, we launched Omnipod 5 in the United States in 2022 and in the United Kingdom and Germany in June and August 2023, respectively.

In June 2024, we launched our full market releases of Omnipod 5 in the Netherlands and France, and most recently, in January 2025, we announced that Omnipod 5 is now available in Italy, Denmark, Finland, Norway, and Sweden.

Additionally, we are working on further building our international teams and advancing our regulatory, reimbursement, and market development efforts so we can bring Omnipod 5 to additional international markets.

In August 2024, we received FDA clearance for an expanded indication of Omnipod 5 for people with type 2 diabetes.

Due to the positive results of our Omnipod 5 type 2 pivotal trial and the learnings from our Omnipod GO commercial pilot, we made a strategic decision to drive growth in the type 2 diabetes market with Omnipod 5 and, accordingly, decided not to move forward with the commercialization of Omnipod GO.

During 2024, we completed participant enrollment in our RADIANT study in France, the United Kingdom, and Belgium, which is our Omnipod 5 with Libre 2 randomized controlled trial.

Similar to the randomized control trial that we completed in the United States and France for Omnipod 5 with DexCom’s G6 CGM, the objective is to provide data to support our pricing and market access initiatives as we roll out Omnipod 5 with multiple sensors across our international markets.

We also continue to expand market access and awareness of Omnipod products through our direct to consumer advertising programs and through growing our presence in the U.S.

pharmacy channel, where access to Omnipod 5 and Omnipod DASH is simpler and affordable, as no up-front investment is required.

We also continue to focus on our product development efforts, including AID offerings, such as choice of smartphone integration and CGM, and enhancing the customer experience through digital product and data capabilities.

Omnipod 5 integration with Dexcom’s G6 CGM is available in every country where Omnipod 5 is available.

In June 2024, we began our full market release of Omnipod 5 with Dexcom’s G7 CGM in the United States.

Similarly, in June 2024 we launched our full market release of Omnipod 5 with Libre 2 Plus for individuals aged two years and older with type 1 diabetes in both the United Kingdom and Netherlands, where we offer sensor of choice (integration with either Abbott’s Libre 2 Plus or Dexcom’s G6 CGM).

We also now offer sensor of choice in the United States, Italy, Denmark, Finland, Norway, and Sweden.

Additionally, in October 2024, our Omnipod 5 app for iPhone compatible with Dexcom’s G6 CGM became fully available in the United States.

To achieve this, we launched Omnipod 5 in the United States in 2022, in the United Kingdom and Germany in 2023, and in the Netherlands and France in 2024.

In 2025, we launched Omnipod 5 in nine additional countries.

We are also working on further building our international teams and advancing our regulatory, reimbursement, and market development efforts so we can bring Omnipod 5 to new international markets.

During 2025, we completed the randomized portion of our RADIANT study in France, the United Kingdom, and Belgium.

The RADIANT study is a randomized controlled trial of Omnipod 5 with Libre 2, designed to provide clinical data to support our pricing and market access initiatives as we roll out Omnipod 5 with multiple sensors across our international markets.

In the U.S., we sell our products through the pharmacy channel, which expands access by improving affordable, as no upfront investment is required.

We also continue to increase awareness of Omnipod products through our direct-to-consumer advertising programs.

In 2025, we also completed STRIVE, our pivotal study for the next generation hybrid closed loop system, and we finished enrollment for EVOLUTION 2, our safety and feasibility study for a fully closed loop AID system for type 2 diabetes.

Additionally, we received 510(k) clearance for enhancements to the Omnipod 5 algorithm to include a lower target glucose set point.

We also launched our Omnipod 5 app for iPhone compatible with Dexcom’s G7 CGM sensor in the United States and integrated Omnipod 5 with Dexcom’s G7 CGM sensor in five additional countries and with Abbott’s FreeStyle Libre 2 Plus sensor in Australia.

Following the launch of Omnipod 5 in several countries in the Middle East in early 2026, Omnipod 5 is now available in 19 countries.

We continue to focus on our product development efforts, including choice of smartphone integration and CGM with Omnipod 5 and enhancing the customer experience through digital product and data capabilities.

We are currently working to integrate Omnipod 5 with Abbott’s FreeStyle Libre 3 Plus and developing Omnipod 6, our next generation AID product.

Finally, we continue to take steps to strengthen our global manufacturing capabilities.

In 2024, we began producing product at our newly constructed manufacturing plant in Malaysia.

This plant provides us with increased capacity to satisfy our growing demand, supports our international expansion strategy, and is expected to drive higher gross margins over time.

We began producing product at our new manufacturing plant in Malaysia in 2024 and are already investing in another manufacturing plant in Costa Rica to support our continued growth.

Results of Operations

2 unchanged sentences

Factors Affecting Operating Results

Our Pods are intended to be used continuously for up to three days, after which it may be replaced with a new disposable Pod.

We recently achieved a milestone of 500,000 estimated active global customers using Omnipod products, including 365,000 global customers using Omnipod 5.

The unique patented design of the Omnipod allows us to provide Pod therapy at a relatively low or no up-front investment in regions where reimbursement allows for it and our pay-as-you-go pricing model reduces the risk to third-party payors.

Our Pod is intended to be used continuously for up to three days, after which it may be replaced with a new disposable Pod.

As of December 31, 2025, we had more than 600,000 estimated active Omnipod users globally.

The unique patented design of the Omnipod allows us to provide Pod therapy at a relatively low or no up-front investment in regions where reimbursement allows

for it and our pay-as-you-go pricing model reduces the risk to third-party payors.

As we grow our customer base, we expect to generate an increasing portion of our revenues through recurring sales of our disposable Pods, which provide recurring revenue.

Following our strategic decision to not move forward with the commercialization of Omnipod GO discussed above, we recorded a charge of $13.5 million related to certain inventory components that we no longer expect to utilize, which is included in our consolidated statement of income for 2024.

In 2022, we issued two voluntary Medical Device Correction (“MDC”) notices, one for our Omnipod DASH PDM related to its battery and the other for our Omnipod 5 Controller related to its charging port and cable.

During 2022, we initially recorded a net charge of $57.9 million related to these MDCs and, in 2023, we recorded $11.5 million of income associated with a change in our estimated liability for the MDCs, primarily due to lower distribution costs.

In August 2024, we received FDA clearance for an expanded indication of Omnipod 5 for people with type 2 diabetes.

Due to the positive results of our Omnipod 5 type 2 pivotal trial and the learnings from our commercial pilot of Omnipod GO, a basal-only Pod for certain individuals with type 2 diabetes, we made a strategic decision to drive growth in the type 2 diabetes market with Omnipod 5.

Accordingly, we decided not to move forward with the commercialization of Omnipod GO.

As a result, in 2024, we recorded a charge of $13.5 million related to certain inventory components that would not be utilized.

Comparison of the Years Ended December 31, 2025 and December 31, 2024

11 unchanged sentences

Total revenue increased $636.6 million, or 30.7%, to $2,708.1 million in 2025, compared with $2,071.6 million in 2024.

Constant currency revenue growth of 21.9% was primarily driven by higher volume largely attributable to our growing customer base and, to a lesser extent, higher price.

Constant currency revenue growth of 29.5% was primarily driven by higher sales volume largely attributable to our growing customer base and, to a lesser extent, higher price.

Revenue from the sale of Omnipod products in the U.S.

increased $410.5 million, or 27.2%, in 2025 to $1,919.8 million, compared with $1,509.3 million in 2024.

This increase primarily resulted from higher volume through the pharmacy channel driven by growing our customer base, partially offset by a decrease in estimated inventory days-on-hand at distributors and lower conversions to Omnipod 5.

Inventory days-on-hand declined to more normal levels following an acceleration of orders by U.S.

pharmacy wholesales in advance of the implementation of our new ERP system on January 1, 2024.

We experienced a benefit from conversions to Omnipod 5 in the prior year following the launch of the product in the latter half of 2022 since users generally fill both their Omnipod 5 starter kit and their first month of refills simultaneously.

Conversions to Omnipod 5 declined since the vast majority of U.S.

conversions to Omnipod 5 occurred in 2023.

To a lesser extent, the revenue increase was driven by a higher average selling price resulting from our annual wholesale acquisition cost increase implemented during the second quarter of 2024 and growth in the pharmacy channel.

This increase primarily resulted from higher sales volume driven by growing our customer base.

Revenue from the sale of Omnipod products in the U.S.

includes $511.6 million of related party revenue in 2025, compared with $587.8 million in 2024.

The $114.1 million increase primarily resulted from growth through the pharmacy channel.

The $76.2 million decrease primarily resulted from one quarter less of related party sales in the current year, partially offset by growth through the pharmacy channel.

Additional information regarding our related party transactions is provided in Note 2 to our consolidated financial statements.

1 unchanged sentence

revenue growth primarily driven by the benefits of our recurring revenue model and continued volume growth of Omnipod 5.

Our recent type 2 indication for Omnipod 5, the launch of Omnipod 5 integrations with both Dexcom’s G7 CGM and Libre 2 Plus, and the launch our Omnipod 5 app for iPhone, are expected to contribute to an increase in our customer base.

International

Revenue from the sale of Omnipod products in our international markets increased $230.9 million, or 44.1%, in 2025 to $754.3 million, compared with $523.4 million in 2024.

Excluding the 0.7% favorable impact of currency exchange, the remaining 26.9% increase in revenue was primarily due to higher volumes from the launches of Omnipod 5 in the United Kingdom and Germany in the prior year, driven by our growing customer base and the favorable impact of conversions to

A higher average selling price for Omnipod 5 compared with Omnipod DASH and Classic Omnipod also contributed to the revenue increase, although to a lesser extent.

In 2025, we expect higher International Omnipod revenue due to continued volume growth driven by new customers and conversions to Omnipod 5 primarily due to the launch of Omnipod 5 in France and the Netherlands, growth from the earlier launches in Germany and the United Kingdom, and the continued roll out of Omnipod 5 in additional markets.

Excluding the 4.8% favorable impact of currency exchange, the remaining 39.3% increase in revenue was primarily due to higher volumes from our growing customer base, largely resulting from the prior year launches of Omnipod 5.

A higher average selling price for Omnipod 5, compared with Omnipod DASH, also contributed to the revenue increase.

In 2026, we expect higher International revenue due to continued volume growth driven by new customers and higher price resulting from conversions to Omnipod 5.

Drug Delivery

Substantially all of our Drug Delivery revenue consists of sales of pods to Amgen for use in the Neulasta ® Onpro ® kit, a delivery system for Amgen’s Neulasta to help reduce the risk of infection after intense chemotherapy.

Drug Delivery revenue increased $2.9 million, or 8.1%, to $38.9 million in 2024, compared with $36.0 million in 2023.

This increase primarily resulted from an increase in orders from our partner, partially offset by a reimbursement from our partner to cover a portion of our increased production costs in the prior year, which did not repeat in the current year.

Drug Delivery revenue was $34.1 million and $38.9 million in 2025 and 2024, respectively.

Costs and Expenses

8 unchanged sentences

Gross margin was 71.6% in 2025, compared with 69.8% in 2024.

The 1.5 point increase in gross margin was primarily driven by pricing benefits in both the U.S.

pharmacy channel and in our international markets, improved manufacturing efficiencies, and procurement savings.

These increases were partially offset by a $13.5 million charge related to certain components utilized in Omnipod GO, which we decided not to commercialize, an $11.5 million accrual reversal during the prior year associated with the voluntary MDC notices we issued in 2022, which did not recur in the current year, and higher costs due to inflation.

We expect gross margin to further increase to approximately 70.5% in 2025 primarily due to improved manufacturing efficiencies.

The 180 basis points increase in gross margin was primarily driven by improved manufacturing and supply chain efficiencies, a higher average selling price, increased volume and a $13.5 million charge in the prior year related to certain components utilized in OmnipodGO, which we decided not to commercialize.

While we do not expect tariffs to have a significant impact on our gross margin in 2026, should the exemption that is currently in place for certain medical devices be eliminated, tariffs would have a material impact on our results of operations in future years.

Research and Development

Research and development expenses increased $81.5 million, or 37.1%, to $301.1 million for 2025, compared with $219.6 million for 2024.

Research and development expenses as a percent of revenue decreased to 10.6% in 2024, compared with 12.1% in 2023 primarily due to an increase in sustaining costs following the launch of Omnipod 5 in the United States, which are included in selling, general and administrative expenses.

We expect research and development spending in 2025 to increase compared with 2024 as we continue to invest in advancing our innovation and clinical pipeline.

Research and development expenses as a percent of revenue increased to 11.1% in 2025 from 10.6% in 2024.

The increase in research and development expense was primarily due to year-over-year headcount additions to support continued investment in our Omnipod and pipeline products, including a fully closed loop AID system for type 2 diabetes, the integration of Libre 3 with Omnipod 5, and Omnipod 6, our next generation AID system.

To a lesser extent, the increase was driven by higher consulting costs to support our clinical trials and Omnipod and next generation products.

Selling, General and Administrative

Selling, general and administrative expenses increased $247.8 million, or 27.0%, to $1,165.0 million in 2025, compared with $917.2 million in 2024.

This increase was primarily attributable to year-over-year headcount additions to support our growth, international expansion and sustain Omnipod 5, and as a result of our new organizational structure.

To a lesser extent, the increase was due to higher legal fees to defend our intellectual property and support our business growth;

an increase in advertising expense;

higher costs associated with the continued commercial rollout of Omnipod 5 in international markets;

and increases in travel and expenses resulting from headcount additions.

We expect selling, general and administrative expenses to increase in 2025 compared with 2024 due to investments in our operating structure, primarily headcount additions, particularly in the areas of customer support, sales and information technology support, to facilitate continued growth globally.

We also plan to make additional investments to support the Omnipod platform and to continue support the phased launch of Omnipod 5 in our existing international markets and prepare for expansion into new countries.

This increase was primarily attributable to year-over-year headcount additions to support our business growth, mainly in our commercial and customer experience teams, and incremental advertising expense of $37.1 million.

Increased investments in global marketing and training for the sales team to support demand generation also contributed to the increase in selling, general and administrative expenses, although to a lesser extent.

Non-Operating Items

Interest Expense and Income

Interest expense increased $6.5 million to $42.7 million in 2024, compared with $36.2 million in 2023 primarily due to fees paid to amend our Term Loan.

Interest income increased $10.9 million to $39.5 million in 2024, compared with $28.6 million in 2023 primarily driven by increased average cash balances and higher interest rates.

Other (Expense) Income, net

Other expense, net of $5.5 million for 2024 consists primarily of $3.8 million of loss related to fair value adjustments associated with a strategic debt investment.

Other income, net of $2.2 million for 2023 consists primarily of $2.6 million of gains related to fair value adjustments associated with our strategic debt and equity investments.

Income Tax Expense

Income tax benefit was $118.1 million on pre-tax income of $300.2 million for 2024, compared with income tax expense of $8.3 million on pre-tax income of $214.6 million for 2023.

Our effective tax rate was a benefit of 39.3% for 2024, compared with a provision of 3.9% for 2023.

The decrease in our effective tax rate was primarily due to a $182.5 million non-cash tax benefit from the release of the majority of our valuation allowance against deferred tax assets discussed in Note 22 to our consolidated financial statements and a $8.3 million tax benefit from a research and development tax credit recovery project for the years 2017 through 2022.

These tax benefits were partially offset by a $8.2 million decrease in tax benefits from employee stock-based compensation.

In 2021, the Organization for Economic Co-operation and Development (“OECD”) and G20 international forum released the Model Global Anti-Base Erosion (GloBE) rules (“Model Rules”) under Pillar Two.

These Model Rules set forth the common approach for a Global Minimum Tax at 15% for multinational enterprises with revenue greater than €750 million and is expected to be applicable to Insulet.

Pillar Two has been adopted by the Council of the European Union for implementation by European Union member states by December 31, 2023, with effect for tax years beginning 2024.

Similar directives under Pillar Two are already adopted or expected to be adopted by taxing authorities in other countries where Insulet has business operations, with widespread implementation of the Global Minimum Tax in 2024 and 2025.

There was no impact on the consolidated financial statements for 2024.

While we do not expect the Pillar Two Model Rules and related legislation to have a material impact on our consolidated financial statements for 2025, we continue to evaluate their potential impact on future years.

Interest expense increased $16.7 million to $59.4 million in 2025, compared with $42.7 million in 2024 primarily due to the issuance of 6.5% senior unsecured notes in March 2025 and the renewal of interest rate swaps at higher rates in April 2025.

The increase was partially offset by lower interest on our Term Loan B resulting from the refinancing in August 2024 and fees paid to amend our Term Loan B in the prior year, which did not repeat in the current year.

Interest income decreased $4.9 million to $34.7 million in 2025, compared with $39.5 million in 2024 primarily driven by lower interest rates.

In 2026, we expect net interest expense to increase to $40 million or more, primarily due to lower interest income.

Loss on Extinguishment of Debt

During 2025, we repurchased $419.9 million million in principal ($417.6 million net of issuance costs) of our Convertible Senior Notes for $541.5 million in cash, which resulted in a $123.9 million loss on extinguishment.

Refer to Note 13 to our consolidated financial statements for additional information.

Other Income (Expense), net

Other income, net of $14.3 million for 2025 primarily consists of a $12.5 million gain resulting from the change in fair value of the derivative asset associated with the redemption of our convertible debt discussed in Note 15.

Other expense, net of $5.5 million for 2024 consists primarily of a $3.8 million loss related to fair value adjustments associated with a strategic debt investment.

Our effective tax rate was 27.2% for 2025, compared with a tax benefit of 39.3% for 2024.

The increase in our effective tax rate was primarily due to the absence of a valuation allowance against deferred tax assets that existed in the prior year and the loss

on extinguishment of our Convertible Senior Notes during 2025, the settlement of which resulted in non-deductible premiums, These impacts were partially offset by a nontaxable gain on the related derivative asset.

The Organization for Economic Co-operation and Development (“OECD”) and participating countries continue to advance the implementation of a 15% global minimum corporate tax (“Pillar Two”).

More than 50 countries, including the Netherlands and the United Kingdom, in which we operate, have enacted elements of the global minimum tax legislation with certain provisions effective in 2025.

In January 2026, the OECD issued additional administrative guidance introducing a “side-by-side” framework applicable to U.S.-parented multinational groups.

This framework provides an exemption from the application of certain Pillar Two charging provisions, including the Income Inclusion Rule and the Undertaxed Profits Rule, while such groups remain subject to Qualified Domestic Minimum Top-Up Taxes enacted by individual jurisdictions.

We anticipate additional legislative activity and administrative guidance related to Pillar Two throughout 2026.

Based on the legislation enacted as of December 31, 2025, the implementation of Pillar Two did not have a material impact on our consolidated financial statements for 2025.

We are continuing to evaluate the potential impact on future periods.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

The OBBBA permanently extends certain provisions of the Tax Cuts and Jobs Act, modifies aspects of the international tax framework, and restores favorable tax treatment for certain business provisions, including the immediate expensing of domestic research and development expenditures.

The OBBBA also provides accelerated tax deductions for certain qualified property.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others effective through 2027.

In 2025, OBBBA resulted in a decrease in our deferred tax assets of approximately $70 million, primarily due to the immediate expensing of domestic research and development expenditures and a corresponding increase in both operating and free cash flow.

The impact on our consolidated statement of income was insignificant.

We continue to evaluate the optional tax elections available under OBBBA and their potential impact on our consolidated financial statements for 2026 and subsequent periods.

Adjusted EBITDA

4 unchanged sentences

Interest expense, net 24.7 3.2

Income tax expense (118.1) 8.3

Income tax expense (benefit)

Depreciation and amortization 90.4 80.8

Stock-based compensation expense 69.3 48.3

Voluntary medical device corrections (1)

Unrealized loss (gain) on investments (2)

Stock-based compensation (1)

CEO and CFO transition (2)

Loss on extinguishment of debt (3)

Gain on derivative asset (4)

Loss on investments (5)

Adjusted EBITDA $ 645.5 $ 457.2

(1) Represents net (income) expense resulting from estimated costs associated with the voluntary MDC notices issued in the fourth quarter of 2022 and adjustments to those costs, which is included in cost of revenue.

Refer to Note 13 to our consolidated financial statements for additional information.

(2) Represents non-operating gain or loss related to fair value adjustments of strategic debt and other investments.

(1) 2025 includes $11.7 million reversal of stock-based compensation expense associated with the departure of the Company’s former Chief Executive Officer and Chief Financial Officer.

(2) Represents severance benefits for the Company’s former Chief Executive Officer and Chief Financial Officer.

(3) Relates to the repurchase of Convertible Senior Notes.

(4) Represents the change in fair value of the derivative asset associated with the redemption of Convertible Senior Notes.

(5) Represents losses associated with debt and equity investments.

Non-GAAP Financial Measures

4 unchanged sentences

It is also one of the performance metrics that determines management incentive compensation.

Adjusted EBITDA represents net income plus net interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense and other significant transactions or events, such as legal settlements, medical device corrections, gains (losses) on investments, and loss on extinguishment of debt, which affect the period-to-period comparability of our performances, as applicable.

We present Adjusted EBITDA because management uses it as a supplemental measure in assessing our performance, and we believe that it is helpful to investors and other interested parties as a measure of our

comparative performance from period to period.

investments, and loss on extinguishment of debt, which affect the period-to-period comparability of our performances, as applicable.

Adjusted EBITDA is a commonly used measure in determining business value and we use it internally to report results.

Free cash flow, a non-GAAP measure, represents the cash that we have available to pursue opportunities that we believe enhance shareholder value and is calculated as net cash provided by operating activities less capital expenditures.

Free cash flow is calculated as net cash provided by operating activities less capital expenditures.

Management uses this non-GAAP measure, in addition to U.S.

17 unchanged sentences

Net debt-to-total capital ratio 9 % 16 %

Convertible Debt

To finance our operations and global expansion, we have periodically issued convertible senior notes, which are convertible into our common stock.

As of December 31, 2024, the following Convertible Senior Notes were outstanding:

Issuance Date Coupon Principal Outstanding

(in millions) Due Date Conversion Rate (1)

Conversion Price

per Share of Common Stock

September 2019 0.375% $ 800.0 September 2026 4.4105 $226.73

(1) Per $1,000 face value of notes.

In connection with the issuance of the Convertible Senior Notes, we purchased capped call options (“Capped Calls”) on our common stock.

By entering into the Capped Calls, we expect to reduce the potential dilution to our common stock (or, in the event the conversion is settled in cash, to provide a source of cash to settle a portion of our cash payment obligation) if at the time of conversion our stock price exceeds the conversion price under the Convertible Senior Notes.

The Capped Calls have an initial strike price of $335.90 per share and cover 3.5 million shares of our common stock.

Credit Agreement

3 unchanged sentences

It also contains other customary covenants, none of which we consider restrictive to our operations.

Additionally, we have a Term Loan B (“Term Loan”), which matures in 2031, which contains covenants restricting or limiting our ability to incur additional indebtedness, make asset dispositions, create or permit liens, sell, transfer or exchange assets, guarantee certain indebtedness, and make acquisitions and other investments.

Additional information regarding our debt is provided in Notes 15 to the consolidated financial statements.

Additionally, we have a Term Loan B, which matures in 2031, that contains covenants restricting or limiting our ability to incur additional indebtedness, make asset dispositions, create or permit liens, sell, transfer or exchange assets, guarantee certain indebtedness, and make acquisitions and other investments.

Senior Unsecured Notes

Our $450 million aggregate principal amount of 6.5% senior unsecured notes, due 2033, contain leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt, as well as other customary covenants, none of which we consider restrictive to our operations.

Share Repurchase Program

In March 2025, the Company’s Board of Directors authorized a program to repurchase up to $125.0 million of common stock through December 31, 2026 to offset dilution from stock-based compensation.

During 2025, we repurchased approximately 184 thousand shares for $59.6 million under this program.

In February 2026, the Board of Directors extended the authorization of this program through December 31, 2027 and approved an additional $350 million in repurchases of common stock.

We plan to utilize $300 million of existing cash to repurchase shares in the first quarter of 2026.

Additional information regarding our debt and equity is provided in Notes 13 and 17 to the consolidated financial statements.

Summary of Cash Flows

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash, cash equivalents, and restricted cash

Net (decrease) increase in cash and cash equivalents

$ (237.3) $ 249.2

Operating Activities

Net cash provided by operating activities of $430.3 million in 2024 was primarily attributable to net income, as adjusted for deferred income taxes, depreciation and amortization, stock-based compensation expense, and a $17.0 million working capital outflow.

The working capital outflow was driven by a $32.4 million increase in inventories, a $21.9 million increase in prepaid expenses and other assets, and a $10.4 million increase in accounts receivable, partially offset by a $45.5 million increase in accrued expenses and other liabilities.

The increase in inventories was primarily due to a planned inventory build to satisfy our growing demand and, to a lesser extent, to mitigate supply chain risk.

The increase in prepaid expenses and other assets was primarily driven by an increase in prepaid software fees, cloud computing upgrade and implementation costs, prepaid income taxes, and capitalized commissions.

The increase in accounts receivable was primarily due to an increase in sales driven by our growing customer base.

Finally, the increase in accrued expenses and other liabilities was primarily driven by an increase in compensation costs due to headcount additions and an increase in professional consulting fees primarily driven by higher legal costs and direct-to-consumer spending.

Net cash provided by operating activities of $569.3 million in 2025 was primarily attributable to net income, as adjusted for loss on extinguishment of debt, depreciation and amortization, stock-based compensation expense, and deferred income taxes, partially offset by a $23.0 million working capital outflow.

The working capital outflow was driven by a $140.2 million increase in accounts receivable and an $81.7 million increase in prepaid expenses and other assets, partially offset by a $160.2 million increase in accrued expenses and other liabilities and a $49.2 million increase in accounts payable.

The increase in accounts receivable was primarily due to higher sales driven by our growing customer base.

The increase in prepaid expenses and other assets was primarily driven by prepaid payroll, cloud computing costs, prepaid income taxes, and prepaid raw materials.

The increase in accrued expenses and other liabilities was primarily driven by an increase in accrued compensation driven by higher incentive compensation achievement and headcount additions to support our growing business, and an increase in accrued rebates due to higher sales volume.

Finally, the increase in accounts payable was driven by the timing of payments and continued growth of our business.

Investing Activities

1 unchanged sentence

Capital Spending —Capital expenditures were $191.6 million and $124.9 million in 2025 and 2024, respectively.

The $49.3 million increase primarily related to the purchase of machinery, equipment and tooling to increase our manufacturing capacity for our new Malaysia manufacturing facility and continuous improvements at our other owned manufacturing facility.

We expect capital expenditures for 2025 to increase compared with 2024 as we continue to expand and optimize our manufacturing and supply chain operations as well as support our global expansion.

We expect to fund our capital expenditures using existing cash.

The $66.7 million increase primarily related to the investment in our third manufacturing plant in Costa Rica and the purchase of additional machinery and equipment for our Malaysia manufacturing facility to support continued business growth.

We expect capital expenditures for 2026 to increase compared with 2025 as we continue to expand globally and optimize our manufacturing and supply chain operations.

We expect to fund our capital expenditures using a combination of existing cash and financing.

Investments in Developed Software— Investments in developed software were $19.2 million and $9.1 million in 2025 and 2024, respectively, and primarily related to investments in projects to support our cloud-based capabilities.

Investments —In 2024 and 2023, we made strategic investments in private companies in the amount of $12.2 million and $7.2 million, respectively.

Acquisitions —In 2023, we paid Bigfoot Biomedical, Inc.

$25.1 million, including transaction costs, to acquire patent assets related to pump-based AID technologies.

We also paid a purchase price holdback of $3.0 million associated with our 2022 acquisition of substantially all the assets related to the manufacture and production of shape-memory alloy wire assemblies used in the production of our product from Dynalloy, Inc.

Investments —In 2024, we made strategic investments in private companies in the amount of $12.2 million.

Financing Activities

Net cash used in financing activities was $595.3 million in 2025, compared with $28.0 million in 2024.

Debt Issuance and Repayments —In 2024, we refinanced our Term Loan, which resulted in net cash proceeds of $130.0 million, net of issuance costs, and the simultaneous repayment of $132.2 million of the Term Loan.

Refer to Note 15 for more information regarding this refinancing.

Additionally, we made $26.4 million and $27.0 million of aggregate principal payments on our equipment financings, Term Loan, and mortgage in 2024 and 2023, respectively.

Finance Lease Payments —During 2024, we made $22.7 million in finance lease repayments associated with our Malaysia manufacturing facility, including the amount associated with exercising our option to purchase the property.

Proceeds and Repayments from Secured Borrowing —During 2024, we received $45.5 million of cash advances from a third-party to whom we outsource our insurance claim submissions process in a certain country.

Additionally, we repaid $34.8 million of cash advances during 2024.

Proceeds from Exercise of Stock Options —Proceeds from option exercises were $8.2 million and $16.3 million in 2024 and 2023, respectively.

The $8.1 million decrease was primarily driven by option exercises by former executives in the prior year.

Debt Issuance and Repayments —In 2025, we received net proceeds of $440.7 million from the issuance of Senior Unsecured Notes and used the proceeds along with proceeds of $164.6 million from the unwinding the related capped call options to partially fund the $1,052.2 million repurchase and redemption of our Convertible Notes.

In 2025, we also received proceeds of $15.5 million from the refinancing of our Term Loan B, and we repaid $99.6 million of our Term Loan B, equipment financings, and mortgage, compared with $26.3 million in 2024.

In 2024, we refinanced our Term Loan B, which resulted in cash proceeds of $130.0 million, net of issuance costs, and the simultaneous repayment of $132.2 million of the Term Loan B.

Proceeds and Repayments from Secured Borrowing —During 2025, we repaid secured borrowing (net of cash advances) of $12.6 million to a third-party to whom we outsourced our insurance claim submissions process in a certain country.

During 2024, we received cash advances (net of repayments) of $10.7 million from this third-party.

Finance Lease Repayments —During 2024, we made $22.7 million in finance lease repayments associated with our Malaysia manufacturing facility, including the amount associated with exercising our option to purchase the property.

Proceeds from Option Exercises —Proceeds from option exercises were $19.0 million and $8.2 million in 2025 and 2024, respectively.

The $10.8 million increase was primarily driven by more options exercised during the current period and a higher average option exercise price resulting from an increase in our stock price.

Proceeds from Shares Issued Under Employee Stock Purchase Plan (“ESPP”) —Proceeds from the issuance of shares under the ESPP were $14.9 million and $11.9 million in 2025 and 2024, respectively.

Payment of Taxes for Restricted Stock Net Settlements —Payments for taxes related to net restricted and performance stock unit settlements were $25.9 million and $7.6 million in 2025 and 2024, respectively.

The $5.6 million decrease was primarily driven by a lower fair market value of the restricted and performance stock units (“PSUs”) that vested in 2024 compared to the prior year, partially offset by higher achievement of the PSUs that vested in 2024 (111% achievement), compared to in the prior year (84% achievement).

The $18.3 million increase was primarily driven by more RSUs vesting during the current period due to headcount additions to support the growth of the business and a higher fair market value of the restricted stock units that vested during the period.

Repurchase of Common Stock— During 2025, we paid $59.6 million to repurchase common shares to offset dilution from stock-based compensation.

Free Cash Flow

Free cash flow was $377.7 million in 2025, compared with $305.3 million in 2024.

The $235.3 million increase in free cash flow primarily resulted from the $285.8 million increase in gross profit, partially offset by the $49.3 million increase in capital expenditures.

The $72.4 million increase in free cash flow primarily resulted from an increase in operating income, partially offset by an increase in capital expenditures and taxes paid.

Free cash flow is a non-GAAP measure, which should be considered supplemental to and not a substitute for our reported financial results prepared in accordance with U.S.

See “Non-GAAP Financial Measures .” A reconciliation between net cash provided by operating activities (the most comparable U.S.

See “Non-GAAP Financial Measures .”

A reconciliation between net cash provided by operating activities (the most comparable U.S.

GAAP measure) and free cash flow is as follows:

26 unchanged sentences

(“EOFlow”) and several other defendants misappropriated certain of our trade secrets and awarded us $452 million in damages.

EOFlow subsequently moved for a directed verdict and for a new trial, as well as for a reduction of the jury award, and we moved for a permanent worldwide injunction on the sale of EOFlow’s EOPatch 2 product and any other products that embody our trade secrets.

EOFlow and other defendants may seek to appeal the verdict.

Further, EOFlow may not be able to satisfy this damage award;

accordingly, it has not been recorded in our consolidated statement of income.

The Court subsequently upheld the jury verdict and further entered a permanent worldwide injunction.

In view of the scope of the permanent injunction, the Court reduced our monetary award to $59.4 million to avoid a double recovery.

We have not recorded the damages awarded in our consolidated statements of income as EOFlow has appealed and EOFlow’s ability to satisfy the damages award is uncertain.

Refer to Note 16 to our consolidated financial statements for additional information regarding this matter.

Off-Balance Sheet Arrangements

Information regarding our letters of credit is provided in Note 18 to the consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S.

GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities.

The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties.

1 unchanged sentence

Pharmacy Rebates

We exercise significant judgment when we determine variable consideration adjustments.

As discussed in Note 2 to our consolidated financial statements, we are subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the United States.

Reductions to our revenues for rebates on products sold through our distributors under pharmacy benefits are the most significant component of variable consideration.

In addition, pharmacy rebates are most at risk for significant adjustment because of the time delay between the recording of the provision when revenue is recognized and its ultimate settlement, an interval that generally ranges from 30 to 90 days, but can last up to one year.

Our estimates for pharmacy rebates are based on historical experience, revenue growth, distribution channel lag, contract amendments and trends.

Pharmacy rebates charged against gross sales amounted to $452.7 million, $367.3 million, and $175.2 million in 2024, 2023, and 2022, respectively.

When actual pharmacy rebate settlements differ from our estimates, we adjust our estimates, which affects reported revenue in the period that such variances become known.

We estimate our income taxes based on the various jurisdictions where we conduct business.

Significant judgment is required in determining our income tax provision.

The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations and the potential for future adjustments by tax authorities.

While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations in determining the adequacy of our provision for income taxes and adjust the income tax provision, income taxes payable, and deferred taxes in the period in which the facts that give rise to a revision become known.

Significant judgement is required in determining whether it is probable that sufficient future taxable income will be available against which a deferred tax asset can be utilized.

We generally recognize revenue when control of our products is transferred to customers in an amount that reflects the net consideration we expect to receive.

Our products are subject to pricing rebates under arrangements with managed care organizations, including pharmacy benefit managers, governmental payors, and third-party commercial payors, primarily in the United States.

These rebates represent amounts owed pursuant to contractual agreements or legal requirements after the product is dispensed to a benefit plan participant.

Provisions for these rebates, collectively referred to as pharmacy rebates, are treated as variable consideration and are recorded as a reduction to revenue using the expected value method.

Although we record a rebate provision at the time of sale, the related rebate payments are generally made 30 to 90 days thereafter and, in certain cases, may extend up to one year.

As a result of this timing difference, revenue recognized in a given period may include adjustments to rebate provisions recorded in prior periods.

Estimates of pharmacy rebates are developed based on historical experience, sales trends, levels of inventory in the distribution channel, and contractual terms.

A significant portion of our rebate provisions relate to sales of the Company’s products in the United States.

United States pharmacy rebate provisions charged against gross sales amounted to $654.7 million, $452.7 million, and $367.3 million in 2025, 2024, and 2023, respectively.

To the extent that actual rebate payments differ from our estimates, we revise our assumptions and record the resulting adjustments to revenue in the period in which such differences become known.

Significant judgment is required in determining whether it is probable that sufficient future taxable income will be available against which a deferred tax asset can be utilized.

In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including cumulative income in recent fiscal years, our forecast of future taxable income exclusive of certain reversing temporary differences and significant risks and uncertainties related to our business.

5 unchanged sentences

state tax credits and state net operating loss carryforwards because it is more likely than not that those deferred tax assets will not be realized.

Significant judgment is also required to evaluate uncertain tax positions and is based on a number of factors, including changes in facts or circumstances, changes in tax laws, correspondence with tax authorities during the course of audits and effective settlement of audit issues.

Changes in the recognition or measurement of uncertain tax positions could result in a material increase or decrease in our income tax expense in the period in which we make the change, which could have a material impact on our effective rate and results of operations.

Accounting Standards Issued and Not Yet Adopted as of December 31, 2025

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires incremental annual income tax disclosures.

The new guidance standardizes categories for the effective tax rate reconciliation and requires disaggregation of income taxes and additional income tax-related disclosures.

We are required to comply with these new disclosure requirements beginning with our annual filing for 2025.

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

The new guidance requires disaggregated disclosure of expenses included in

certain expense captions presented in the statements of incomes as well as additional disclosures about selling expenses.

We are required to comply with these new disclosure requirements beginning with our annual filing for 2027.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20) , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

We are required to comply with the updates beginning with our interim and annual filings for 2026.

The adoption of ASU 2024-04 is not expected to impact our consolidated financial statements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expenses Disaggregation Disclosures (Subtopic 220-40).

The new guidance requires disaggregated disclosure of expenses included in certain expense captions presented in the statements of incomes as well as additional disclosures about selling expenses.

We intend to adopt these new disclosure requirements beginning with our annual filing for 2027, as required.

The guidance may be applied prospectively or retrospectively.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The new guidance provides a practical expedient to simplify the measurement of credit losses for certain receivables and contract assets.

We intend to adopt the practical expedient prospectively beginning with our first quarterly filing for 2026, when required.

We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the internal-use software guidance by eliminating references to prescriptive and sequential software development stages.

The guidance is effective for us beginning in the first quarter of 2028, but early adoption is permitted.

The guidance may be applied prospectively, modified prospectively or retrospectively.