What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-18 compared with 2025-02-21 · 316 added, 351 removed, 909 unchanged (42% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Board of Directors and Stockholders

Insulet Corporation

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Variable consideration – Rebates to pharmacy benefit managers

As described further in Note 2 to the financial statements, the Company provides for certain rebates for sales of its product through intermediaries.

The Company estimates variable consideration related to rebates to pharmacy benefit managers in the United States when determining the transaction price at the time of sale.

We identified the rebate estimate for pharmacy benefit managers as a critical audit matter.

The principal consideration for our determination that the rebate estimate related to pharmacy benefit managers is a critical audit matter was the high degree of auditor judgment in applying procedures to evaluate the significant estimation made by management.

Management's estimate is based on historical experience adjusted for revenue growth, trends, and contract amendments.

Our audit procedures related to the rebate estimate included the following, among others;

Variable consideration – Provision for rebates

As described further in note 2 to the consolidated financial statements, the Company provides for certain rebates for sales of its product through intermediaries.

The Company estimates variable consideration related to rebates to managed care organizations, including pharmacy benefit managers, governmental payors, and third-party commercial payors, primarily in the United States when determining the transaction price at the time of sale.

We identified the provision for rebates as a critical audit matter.

The principal consideration for our determination that the provision for rebates is a critical audit matter is the high degree of auditor judgment in applying procedures to evaluate the significant estimation made by management.

Management's estimate is based on historical experience, sales, trends, levels of inventory in the distribution channel, and contractual terms.

Our audit procedures related to the provision for rebates included the following, among others.

• Evaluated the significant assumptions and the completeness and accuracy of the underlying data used in management’s calculation through inspection of source documents and agreement to other audited schedules.

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Common stock, $ .001 par value, 100,000,000 authorized;

70,196,031 and 69,907,289 issued and outstanding

70,588,192 and 70,390,816 shares issued and outstanding, respectively, at December 31, 2025;

and 70,196,031 issued and outstanding, at December 31, 2024

Additional paid-in capital 1,274.9 1,184.4

Accumulated earnings (deficit)

Accumulated earnings

Accumulated other comprehensive income (loss)

12.5 ( 13.2 )

Accumulated other comprehensive (loss) income

Treasury stock, at cost;

197,374 and — shares

Deferred compensation

Total stockholders’ equity 1,515.2 1,211.6

Total liabilities and stockholders’ equity $ 3,190.4 $ 3,087.7

The accompanying notes are an integral part of these consolidated financial statements.

See notes to consolidated financial statements.

Amounts may not add due to rounding.

INSULET CORPORATION

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Interest income 34.7 39.5 28.6

Other (expense) income, net ( 5.5 ) 2.2 ( 1.1 )

Loss on extinguishment of debt

( 123.9 ) — —

Other income (expense), net 14.3 ( 5.5 ) 2.2

Income before income taxes 339.5 300.2 214.7

Income tax benefit (expense)

Income tax (expense) benefit

( 92.4 ) 118.1 ( 8.3 )

Net income $ 247.1 $ 418.3 $ 206.3

Net income per share:

Earnings per share:

Basic $ 3.51 $ 5.97 $ 2.96

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Diluted 71,886 73,891 73,633

The accompanying notes are an integral part of these consolidated financial statements.

See notes to consolidated financial statements.

Amounts may not add or recalculate due to rounding.

INSULET CORPORATION

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Net income $ 247.1 $ 418.3 $ 206.3

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

Foreign currency translation adjustment 29.7 ( 7.9 ) 2.5

Unrealized (loss) gain on cash flow hedges ( 13.4 ) ( 14.2 ) 32.5

Unrealized loss on cash flow hedges

( 4.1 ) ( 13.4 ) ( 14.1 )

Unrealized loss on securities — — ( 0.3 )

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

25.7 ( 21.2 ) ( 11.9 )

Comprehensive income $ 272.8 $ 397.1 $ 194.4

The accompanying notes are an integral part of these consolidated financial statements.

See notes to consolidated financial statements.

Amounts may not add due to rounding.

INSULET CORPORATION

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(Deficit) Earnings

Accumulated Other Comprehensive (Loss) Income

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Deferred Compensation

Stockholders’

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69,511 $ 0.1 $ 1,040.6 $ ( 584.2 ) $ 20.0 $ — $ — $ 476.4

Adoption of ASU 202-06 (Note 2)

— — ( 207.7 ) 60.6 — ( 147.1 )

Net income — — — 206.2 — — — 206.2

Other comprehensive loss — — — — ( 11.9 ) — — ( 11.9 )

Exercise of options to purchase common stock 249 — 16.3 — — — — 16.3

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Restricted stock units vested, net of shares withheld for taxes 92 — ( 13.2 ) — — — — ( 13.2 )

Net income — — — 4.6 — 4.6

Other comprehensive income

— — — — 22.2 22.2

Balance, December 31, 2023

69,907 0.1 1,102.7 ( 378.0 ) 8.0 — — 732.7

Net income — — — 418.3 — — — 418.3

Other comprehensive loss, net of tax — — — — ( 21.2 ) — — ( 21.2 )

Exercise of options to purchase common stock 127 — 8.2 — — — — 8.2

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Restricted stock units vested, net of shares withheld for taxes 84 — ( 7.6 ) — — — — ( 7.6 )

Net income — — — 206.3 — 206.3

Other comprehensive loss

— — — — ( 12.0 ) ( 12.0 )

Balance, December 31, 2024

70,196 0.1 1,184.4 40.3 ( 13.2 ) — — 1,211.6

Net income — — — 247.1 — — — 247.1

Other comprehensive income, net of tax — — — — 25.7 — — 25.7

Exercise of options to purchase common stock 152 — 19.0 — — — — 19.0

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Restricted stock units vested, net of shares withheld for taxes 167 — ( 25.9 ) — — — — ( 25.9 )

Net income — — — 418.3 — 418.3

Other comprehensive loss, net of tax

— — — — ( 21.2 ) ( 21.2 )

Repurchase of common stock ( 184 ) — — — — ( 59.6 ) — ( 59.6 )

Deferred compensation — — — — — ( 0.9 ) 0.9 —

Rabbi trust distribution — — — — — 0.1 ( 0.1 ) —

Conversion of Convertible Senior Notes — — ( 144.8 ) — — — — ( 144.8 )

Settlement of capped call options — — 164.6 — — — — 164.6

Balance, December 31, 2025

70,391 $ 0.1 $ 1,274.9 $ 287.4 $ 12.5 $ ( 60.4 ) $ 0.8 $ 1,515.2

The accompanying notes are an integral part of these consolidated financial statements.

See notes to consolidated financial statements.

Amounts may not add due to rounding.

INSULET CORPORATION

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Non-cash interest expense 6.2 7.3 6.7

Provision for credit losses ( 0.2 ) 2.3 4.2

Unrealized loss (gain) on investments

3.8 ( 2.6 ) —

Loss on extinguishment of debt 123.9 — —

Gain on derivative asset

Provisions for credit losses 5.4 ( 0.2 ) 2.3

Loss (gain) on investments — 3.9 ( 2.6 )

Other 7.0 4.9 2.0

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Investments in developed software ( 19.2 ) ( 9.1 ) ( 8.5 )

Cash paid for investments ( 12.2 ) ( 7.2 ) ( 7.8 )

Acquisition of other intangible assets ( 8.6 ) — ( 25.1 )

Acquisition of a business — ( 3.0 ) ( 26.0 )

Cash paid for investments — ( 12.2 ) ( 7.2 )

( 3.2 ) — ( 3.0 )

Net cash used in investing activities ( 222.7 ) ( 146.2 ) ( 119.4 )

Cash flows from financing activities

Proceeds from issuance of term loan, net of issuance costs 130.0 — —

Repayment of term loan ( 137.2 ) ( 5.0 ) ( 5.0 )

Proceeds from issuance of senior unsecured notes, net of issuance costs 440.7 — —

Proceeds from issuance of Term Loan B, net of issuance costs 15.5 130.0 —

Repayment of Term Loan B ( 20.5 ) ( 137.2 ) ( 5.0 )

Repayment of equipment financings ( 18.2 ) ( 19.0 ) ( 19.8 )

Financing lease payments

Repayment of Convertible Senior Notes

( 1,052.2 ) — —

Financing lease repayments — ( 22.7 ) —

Repayment of mortgage ( 60.9 ) ( 2.4 ) ( 2.2 )

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Repayment of secured borrowing (Note 5)

( 62.4 ) ( 34.8 ) —

Settlement of capped call options 164.6 — —

Repurchase of common stock ( 59.6 ) — —

Proceeds from exercise of stock options 19.0 8.2 16.3

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( 595.3 ) ( 28.0 ) ( 13.6 )

Effect of exchange rate changes on cash ( 6.8 ) 1.8 ( 4.3 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 249.2 14.5 ( 116.7 )

Effect of exchange rate changes on cash and cash equivalents 11.5 ( 6.8 ) 1.8

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 237.3 ) 249.2 14.4

Cash, cash equivalents, and restricted cash, beginning of year 953.4 704.2 689.8

Cash, cash equivalents, and restricted cash, end of year

$ 953.4 $ 704.2 $ 689.7

Cash and cash equivalents, end of year $ 716.1 $ 953.4 $ 704.2

Supplemental cash flow information (Notes 12 and 22)

The accompanying notes are an integral part of these consolidated financial statements.

See notes to consolidated financial statements.

Amounts may not add due to rounding.

INSULET CORPORATION

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The Company’s Omnipod products are currently sold in the United States, Europe, Canada, the Middle East, and Australia either indirectly through intermediaries or directly to end-users.

Intermediaries include wholesalers who sell the Company’s product to end-users through the pharmacy channel in the United States and independent distributors who resell Omnipod products to end-users.

Intermediaries include independent distributors who resell Omnipod products to end-users and wholesalers who sell the Company’s product to end-users through the pharmacy channel in the United States.

Substantially all of the Company’s 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.

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Actual results may differ from those estimates.

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

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

Principles of Consolidation

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The net effect of these translation adjustments is reported in accumulated other comprehensive income (loss) within stockholders’ equity on the consolidated balance sheets.

Net realized and unrealized losses from foreign currency transactions are included in other (expense) income, net in the consolidated statements of income and were $ 2.3 million, $ 0.4 million and $ 1.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Net realized and unrealized gains (losses) from foreign currency transactions are included in other income (expense), net in the consolidated statements of income and were $ 1.8 million and $( 2.3 ) million for the years ended December 31, 2025 and 2024, respectively.

The amount of net realized and unrealized losses from foreign currency transactions for the year ended December 31, 2023 was insignificant.

Cash and Cash Equivalents

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These investments are carried at cost less impairment, if any.

If an observable price change in orderly transactions for the identical or similar investment in the same issuer is identified, the investment is measured at its fair value as of the date that the observable transaction occurred with the adjustments reflected in other (expense) income, net in the Company’s consolidated statements of income.

If an observable price change in orderly transactions for the identical or similar investment in the same issuer is identified, the investment is measured at its fair value as of the date that the observable transaction occurred with the adjustments reflected in other income (expense), net in the Company’s consolidated statements of income.

Investments in equity securities are recorded within other assets on the consolidated balance sheets.

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The other investment is a debt security that contains embedded derivatives.

Unrealized gains and losses for this investment are recorded as a component of other (expense) income, net in the consolidated statements of income.

Unrealized gains and losses for this investment are recorded as a component of other income (expense), net in the consolidated statements of income.

Investments in debt securities are recorded within other assets on the consolidated balance sheets.

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Investments with a stated maturity date of more than one year from the balance sheet date and that are not expected to be used in current operations are classified as long-term investments within other assets on the consolidated balance sheets.

The Company reviews investments for other-than-temporary impairment when the fair value of an investment is less than its amortized cost.

If an available-for-sale security is other than temporarily impaired, the loss is included in other (expense) income, net in the consolidated statements of income.

The Company reviews investments for impairment when the fair value of an investment is less than its amortized cost.

If an available-for-sale security is impaired, a credit loss is included in other income (expense), net in the consolidated statements of income and a non-credit loss is included in other comprehensive income (loss) in the consolidated statements of comprehensive income.

Accounts Receivable and Allowance for Credit Losses

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The Company incurs commission costs to obtain a contract related to new customer starts.

These costs are capitalized as contract assets in other assets on the consolidated balance sheet, net of the short-term portion included in prepaid expenses and other current assets.

These costs are capitalized as contract assets in other assets on the consolidated balance sheets, net of the short-term portion included in prepaid expenses and other current assets.

Costs to obtain a contract are amortized to selling, general and administrative expense on a straight-line basis over the expected period of benefit, which considers future product upgrades.

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Risks that relate to interest rate exposure are managed by using interest rate swaps.

The Company recognizes derivative instruments as either assets or liabilities at fair value on the consolidated balance sheet.

The Company recognizes derivative instruments as either assets or liabilities at fair value on the consolidated balance sheets.

Changes in a derivative financial instrument’s fair value are recognized in earnings unless specific hedge criteria are met, in which case changes in fair value are recognized as adjustments to other comprehensive income.

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Transaction costs and restructuring costs associated with a business combination are expensed as incurred.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to assets and liabilities assumed in a business combination.

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The Company would record an impairment loss to the extent that the carrying value of the reporting unit’s goodwill exceeds its fair value.

Other Intangible Assets

Intangible assets acquired in a business combination are recorded at fair value, while intangible assets purchased or software developed for internal-use are recorded at cost and are stated at cost less accumulated amortization.

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Patents 8 to 15 years

Amortization expense is included in selling, general and administrative expenses in the consolidated statement of income.

Amortization expense related developed technology is generally included in cost of revenue, while amortization expense related to intangible assets that contribute to the Company’s ability to sell, market, and distribute products is included in selling, general and administrative expenses in the consolidated statement of income.

The Company reviews intangible assets for impairment by comparing the fair value of the assets, estimated using an income approach, with their carrying value.

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Cloud Computing Arrangements

Cloud computing arrangements includes services used to support certain internal corporate functions as well as technology platforms that support commercial initiatives.

The Company capitalizes costs incurred to implement cloud computing arrangements that are service contracts within other current and non-current assets and amortizes such costs over the expected term of the hosting arrangement using the straight-line method to the same income statement line as the associated cloud operating expenses.

Cloud computing arrangements include services used to support certain internal corporate functions as well as technology platforms that support commercial initiatives.

The Company capitalizes costs incurred to implement cloud computing arrangements that are service contracts and records such amounts within other current and non-current assets.

These capitalized implementation costs are amortized on a straight-line basis over the expected term of the hosting arrangement, which ranges from three to ten years .

Amortization expense is recorded in the same income statement line as the associated cloud operating expenses.

The Company assesses the recoverability of capitalized implementation costs in accordance with the policy disclosed under Property, Plant and Equipment .

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Right-of-use assets are calculated as the initial measurement of the lease liability plus lease payments made prior to lease commencement and initial direct costs incurred, less lease incentives received.

The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheet and does not separate lease and non-lease components.

The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheets and does not separate lease and non-lease components.

Loss Contingencies

The Company records a liability on the consolidated balance sheet for loss contingencies when a loss is considered probable and the amount can be reasonably estimated.

The Company records a liability for loss contingencies on the consolidated balance sheets when a loss is considered probable and the amount can be reasonably estimated.

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued.

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Costs to service the claims reflect the current product cost, reclaim costs, shipping and handling costs and direct and incremental distribution and customer service support costs.

Since the Company continues to introduce new products and versions, the anticipated performance of the product over the warranty period is also considered in estimating warranty reserves.

Warranty expense is recorded in cost of revenue in the consolidated statements of income.

Revenue Recognition

The Company generates revenue from the sale of its Controller/PDM and Pods.

The Company generates most of its revenue from the sale of its Controller/PDM and Pods.

We generally recognize revenue when control is transferred to our customers in an amount that reflects the net consideration to which we expect to be entitled.

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• Contracts and Performance Obligations.

The Company generally considers customer purchase orders, which in most cases are governed by agreements with distributors or third-party payors, to be contracts with a customer.

The Company considers the obligation to transfer the Controller/PDM, the initial and subsequent quantity of Pods ordered, and product training, each of which are distinct, to be separate performance obligations.

The Company generally considers customer purchase orders, which in most cases are governed by agreements with distributors or third-party payors, to be contracts with a customer that creates an enforceable right to payment.

The Company considers the obligation to transfer the Controller/PDM, the initial and subsequent quantity of Pods ordered, and product training to be separate performance obligations.

• Transaction Price.

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If a contract contains more than one performance obligation, the transaction price is allocated to each performance obligation based on relative standalone selling price.

The Company is 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.

The Company estimates provisions for rebates primarily based on historical experience, revenue growth, distribution channel lag, and known events or trends.

The Company is 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.

The Company estimates provisions for rebates primarily based on historical experience, sales trends, levels of inventory in the distribution channel, and contractual terms.

The provisions for rebates are included in accrued expenses and other liabilities.

• Chargebacks.

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The Company estimates provisions for chargebacks primarily based on historical experience on a program basis and current contract prices.

Provisions for chargebacks are reflected as deductions to accounts receivable.

• Administrative fees paid to distributors.

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The Company accrues for these fees based on gross sales and contractual fee rates negotiated with the customer.

The accruals for these fees are reflected as deductions to accounts receivable.

• Product Returns.

The Company estimates product returns provision primarily based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns.

Additionally, the Company considers other specific factors such as the estimated shelf life of inventory in the distribution channel and changes to customer terms.

The Company provides customers with prompt payment discounts, which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period.

The Company estimates product return provisions primarily based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns.

Additionally, the Company considers other specific factors such as the estimated shelf life of inventory in the distribution channel and changes to customer contract terms.

The provision for returns is reflected as a deduction to accounts receivable.

The Company offers customers with prompt payment discounts, which reduce the transaction price if payment is received within a specified period.

The Company estimates prompt payment discount accruals based on actual gross sales and contractual discount rates.

The accruals for prompt payment discounts are reflected as deductions to accounts receivable.

• Other Arrangements.

Other incentive or promotional arrangements may be offered to customers, including but not limited to copayment assistance for users with commercial insurance.

We record a provision for the incentive earned based on the number of estimated claims and our estimate of the cost per claim related to product sales that have been recognized as revenue.

Other incentive or promotional arrangements may be offered to customers, including but not limited to financial assistance programs for users with commercial insurance.

We record a provision for the incentive earned based on the number of estimated claims and our estimate of the cost per claim at the time of sale.

The provisions for financial assistance programs are included in accrued expenses and other liabilities.

• Revenue Recognition.

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The Company records deferred revenue if a customer pays consideration, or the Company has the right to invoice, before the Company transfers a good or service to a customer.

Deferred revenue primarily represents product training as there is generally a lag between when the customer is billed and when the end-user receives training.

The Company’s Drug Delivery product line includes sales of a modified version of the Pod to pharmaceutical and biotechnology companies who use the Company’s technology as a delivery method for their drugs.

For the majority of this product line, revenue is recognized, with an associated unbilled receivable, as the product is produced pursuant to the customer’s firm purchase commitments.

The Company has an enforceable right to payment for performance completed to date and the inventory has no alternative use to the Company.

The Company recognizes revenue over time using a blend of costs incurred to date relative to total estimated costs at completion and time incurred to date relative to total production time to measure progress toward the satisfaction of its performance obligations.

The Company believes that both incurred cost and elapsed time reflect the value generated, which best depicts the transfer of control to the customer.

Contract costs include third-party costs as well as an allocation of manufacturing overhead.

Deferred revenue primarily represents product training as there is generally a lag between when the customer is billed and when the end-user receives training, as well as the obligation to provide additional Pods under certain arrangements.

The Company’s Drug Delivery product line includes sales of a modified version of the Pod to a pharmaceutical company who use the Company’s technology as a delivery method for their drugs.

The product is produced pursuant to the customer’s firm purchase commitments, the Company has an enforceable right to payment for performance completed to date, and the inventory has no alternative use to the Company.

Accordingly, revenue is recognized over time using a percentage-of-completion method, measured based on costs incurred to date relative to total estimated costs at completion, which results in the recognition of an associated unbilled receivable.

Related Party Transactions

During a portion of 2025, a member of the Company’s Board of Directors was married to an executive officer of one of the Company’s distributors.

The terms of the distribution agreement are consistent with those prevailing at arm’s length.

As of October 1, 2025, the Company's transactions with the distributor are no longer considered related party transactions.

Research and Software Development Costs

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Research and development expenses include salary and benefits, allocated overhead and occupancy costs, clinical trial and related clinical manufacturing costs, contract services, and other costs.

Costs incurred in the research, design, and development of software embedded in products to be sold to customers are charged to expense until technological feasibility of the ultimate product to be sold is established.

Costs incurred in the research, design, and development of software embedded in products to be sold to customers are charged to expense until technological feasibility of the product to be sold is established.

The Company’s policy is that technological feasibility is achieved when a working model, with the key features and functions of the product, is available for customer testing.

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The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are expected to vest.

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

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The Company reviews its deferred tax assets for recoverability by considering all available positive and negative evidence, including historical profitability, projected future taxable income, and the expected timing of the reversals of existing temporary differences and tax planning strategies.

A valuation allowance is provided to reduce the deferred tax assets if, based on the available evidence, it is more likely than not that some or all the deferred tax assets will not be realized.

valuation allowance is provided to reduce the deferred tax assets if, based on the available evidence, it is more likely than not that some or all the deferred tax assets will not be realized.

The effect of a change in enacted tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

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Recently Adopted Accounting Standards

Segment Reporting— The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures during the fourth quarter of 2024.

Income Taxes— The Company adopted Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , during the fourth quarter of 2025, and applied the amendments prospectively.

ASU 2023-09 requires additional annual income tax disclosures, including standardized categories for the effective tax rate reconciliation, disaggregation of income taxes paid, and expanded income tax-related disclosures.

The required disclosures are included in Note 20.

Segment Reporting— The Company adopted ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures during the fourth quarter of 2024, and applied the amendments retrospectively.

ASU 2023-07 requires incremental disclosures on reportable segments, primarily significant segment expenses.

The required disclosures are included in Note 3.

Convertible Debt— Effective January 1, 2022, the Company adopted ASU 2020-06, Debt – Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity using the modified retrospective method for convertible debt instruments outstanding as of the date of adoption.

Under ASU 2020-06, a convertible debt instrument is generally reported as a single liability at its amortized cost with no separate accounting for embedded conversion features.

Consequently, the effective interest rate of convertible debt instruments is closer to the coupon interest rate under this guidance.

The cumulative effect of adopting ASU 2020-06 resulted in a $ 207.7 million decrease to the opening balance of additional paid-in-capital upon adoption resulting from the derecognition of the embedded conversion feature and debt issuance costs bifurcated to equity, a $ 60.6 million decrease to the opening balance of accumulated deficit representing the cumulative interest expense recognized related to the amortization of the bifurcated conversion option and debt issuance costs, and a $ 147.1 million increase in long-term debt resulting from the derecognition of the discount associated with the embedded conversion feature, offset by the remaining debt issuance costs reclassified out of equity.

In addition, the Company wrote-off the related deferred tax liabilities with a corresponding adjustment to the valuation allowance, resulting in no net impact to the cumulative adjustment recorded to accumulated deficit.

Adoption of this standard had no impact on the Company’s diluted earnings per share as the Company historically calculated earnings per share using the if-converted method.

Reference Rate Reform— ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Reporting and ASU 2021-01, Reference Rate Reform (Topic 848) – Scope allow companies to elect optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform (e.g., discontinuation of the London Interbank Offered Rate (“LIBOR”)) if certain criteria are met.

During the fourth quarter of 2022, the Company elected to apply optional expedients for contract modifications to all eligible debt instruments and hedging relationships affected by the transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”).

Accordingly, the Company did not have to assess whether the contract modification should be accounted for as a debt extinguishment.

Additionally, the Company was not required to de-designate hedging relationships when the contractual terms changed.

The adoption of these standards had no impact on our consolidated financial statements.

Segment and Geographic Data

As described in Note 1, the Company’s product offering primarily consists of the Omnipod platform and drug delivery device based on the Omnipod platform.

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance of the segment.

The Company has concluded that its Chief Executive Officer (“CEO”) is the CODM as the CEO is the ultimate decision maker for key operating decisions, determining the allocation of resources and assessing the financial performance of the Company.

The Company operates under one reportable segment.

While decisions, allocations, and assessments are performed by the CODM using consolidated operating income, net income is also provided to the CODM.

As described in Note 1, the Company’s product offering primarily consists of the Omnipod platform and a drug delivery device based on the Omnipod platform.

Operating segments are defined as components of an enterprise for which discrete financial information is available and is regularly reviewed by the chief operating decision-maker (“CODM”) in order to allocate resources and assess segment performance.

The Company has determined that its Chief Executive Officer (“CEO”) is the CODM, as the CEO has ultimate responsibility for making key operating decisions, allocating resources, and evaluating the Company’s financial performance.

Based on this assessment, the Company operates in one reportable segment.

While the CODM evaluates performance and allocates resource primarily using consolidated operating income, net income is also provided to the CODM.

Geographic information about revenue, based on customer location, is as follows:

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Total revenue $ 2,708.1 $ 2,071.6 $ 1,697.1

The following table presents selected financial information for the Company’s single operating segment, including significant expenses:

Years Ended December 31,

(in millions) 2024 2023 2022

Total revenue

2,071.6 1,697.1 1,305.3

Materials (1)

296.7 261.3 198.0

Factory conversion (2)

176.9 151.2 125.7

Depreciation and amortization (3)

25.9 26.3 21.9

Other costs of revenue (4)

126.4 98.4 154.1

Cost of revenue 625.9 537.2 499.7

478.4 398.4 343.7

Outside services (6)

260.5 225.4 157.6

Depreciation and amortization

47.0 40.7 28.9

Other operating expenses (7)

350.9 275.4 237.8

Operating income 308.9 220.0 37.6

Interest expense, net

( 3.2 ) ( 7.6 ) ( 26.7 )

Other (expense) income, net ( 5.5 ) 2.2 ( 1.1 )

Income tax benefit (expense)

118.1 ( 8.3 ) ( 5.2 )

Net income $ 418.3 $ 206.3 $ 4.6

(1) Consists of raw materials utilized included in cost of revenue.

(2) Consists of manufacturing labor, factory overhead and depreciation of plant and equipment primarily at our Acton manufacturing plant.

(3) Consists of depreciation and amortization included in cost of revenue, except for depreciation of plant and equipment included in factory conversion as described in Note 2 .

(4) Consists primarily of warranty expense, cost to manufacture Controllers/PDMs, provision for inventory reserves, cost of data plans and licensing, and costs to train users.

(5) Consists of labor expenses included in research and development expenses and selling, general and administrative expenses, excluding stock-based compensation expense.

(6) Consists primarily of contract labor and professional and consulting fees.

(7) Consists primarily of advertising expense, license fees, stock-based compensation expense and travel and expenses.

There were no significant segment expenses regularly provided to the CODM other than those reported in the Company's consolidated statements of income.

Geographic information about long-lived assets, net, excluding goodwill and other intangible assets is as follows:

4 unchanged sentences

Other 52.9 9.7

Total long-lived assets, net

Property, plant and equipment, net

$ 819.5 $ 723.1

25 unchanged sentences

Deferred revenue recognized $ 8.2 $ 15.4 $ 16.0

Contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:

Capitalized contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:

As of December 31,

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The Company recognized $ 22.7 million, $ 18.2 million, and $ 16.3 million of amortization of capitalized contract acquisition costs for the years ended December 31, 2025, 2024, and 2023, respectively.

Related Party Transactions

The spouse of one of the members of the Company’s Board of Directors is an executive officer of one of the Company’s distributors.

The terms of the distribution agreement are consistent with those prevailing at arm’s length.

The Company recorded $ 587.8 million, $ 473.7 million and $ 249.9 million of net revenues from the distributor for the years ended December 31, 2024, 2023, and 2022, respectively.

Related party transactions recorded on the consolidated balance sheets were as follows:

As of December 31,

(in millions) 2024 2023

Accounts Receivable, Net

Distribution fees payable (1)

Deferred revenue (1)

(1) Balances are included in accrued expenses and other current liabilities.

Accounts Receivable

Accounts receivable were comprised of the following:

Accounts receivable, net were comprised of the following:

As of December 31,

3 unchanged sentences

Accounts receivable, net $ 516.9 $ 252.5 $ 240.3

The percentages of total net accounts receivable trade for customers that represent 10% or more of total net accounts receivable trade were as follows:

The percentages of total accounts receivable trade for customers that represent 10% or more of total accounts receivable trade were as follows:

As of December 31,

9 unchanged sentences

Recoveries of amounts previously reserved — — 0.3

Foreign currency translation 0.2 — —

Credit losses at end of year $ 1.6 $ 1.4 $ 2.4

The Company outsources the insurance claim submissions process to a third-party service provider in one country in which it operates.

Under this agreement, the Company transfers certain receivables in exchange for cash in advance.

If the third-party service provider is unable to collect on the transferred receivables, the third-party service provider has recourse to the Company.

This arrangement is accounted for as a secured borrowing with a pledge of collateral as the transfer does not meet the criteria for sale accounting.

Receivables pledged as collateral of $ 12.2 million are included in accounts receivable on the consolidated balance sheet as of December 31, 2024.

Liabilities associated with the secured borrowings of $ 12.2 million are included within accrued expenses and other current liabilities in the consolidated balance sheet as of December 31, 2024.

No amounts were outstanding as of December 31, 2023.

Under this agreement, in 2025, the Company transferred certain receivables in exchange for cash in advance.

If the third-party service provider was unable to collect on the transferred receivables, the third-party service provider had recourse to the Company.

This arrangement was accounted for as a secured borrowing with a pledge of collateral as the transfer did not meet the criteria for sale accounting.

Receivables pledged as collateral of $ 0.8 million and $ 12.2 million are included in accounts receivable on the consolidated balance sheets as of December 31, 2025 and 2024, respectively.

Liabilities associated with the secured borrowings of $ 0.8 million and $ 12.2 million are included within accrued expenses and other current liabilities in the consolidated balance sheets as of December 31, 2025 and 2024, respectively.

The classification within current liabilities is based on the expected resolution of the underlying receivables.

7 unchanged sentences

Total inventories $ 452.6 $ 430.4

Following the strategic decision to not move forward with the commercialization of Omnipod GO, the Company recorded a charge of $ 13.5 million related to certain inventory components that it no longer expected to utilize, which is included in cost of revenue in the consolidated statement of income for the year ended December 31, 2024.

Following the strategic decision to not move forward with the commercialization of Omnipod GO, a basal-only Pod for certain individuals with type 2 diabetes, the Company recorded a charge of $ 13.5 million related to certain inventory components that it no longer expected to utilize, which is included in cost of revenue in the consolidated statement of income for the year ended December 31, 2024.

Cloud Computing Costs

7 unchanged sentences

Capitalized implementation costs, net $ 110.7 $ 104.6

Amortization expense is recognized on a straight-line basis over the expected term of the hosting arrangements, which range from three to ten years .

Amortization expense was $ 32.1 million, $ 26.8 million, and $ 20.3 million for the years ended December 31, 2025, 2024, and 2023, respectively.

3 unchanged sentences

(in millions) 2025 2024

$ 16.4 $ 12.2

Building and building improvements

7 unchanged sentences

Property, plant and equipment, net $ 819.5 $ 723.1

Capitalized interest expense was $ 1.5 million, $ 1.6 million, and $ 1.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Depreciation expense related to property and equipment was $ 71.0 million, $ 62.6 million, and $ 56.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Construction in process primarily consists of equipment and tooling expected to be placed into service during 2026.

Business Combination

On January 3, 2022, the Company acquired substantially all of the assets related to the manufacture and production of shape-memory alloy wire assemblies that are used in the production of Pods from Dynalloy, Inc., a maker of dynamic alloys.

The aggregate purchase price was $ 29.0 million, of which $ 26.0 million was paid in cash upon closing, and the remaining $ 3.0 million was paid in January 2023.

Transaction costs were expensed as incurred and were not material.

The following table summarizes the fair value allocation of the assets acquired at the date of acquisition:

(in millions)

Inventories $ 0.5

Property, plant and equipment 0.9

Other assets 0.2

Goodwill (tax deductible) 12.0

Developed technology ( 15 year useful life)

Total assets acquired $ 29.0

The primary factor that contributed to an acquisition price in excess of the fair value of assets acquired and the establishment of goodwill was the expected cost savings resulting from the integration of a supplier.

Capitalized interest expense was $ 4.2 million, $ 1.5 million, and $ 1.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Depreciation expense related to property, plant and equipment was $ 79.9 million, $ 71.0 million, and $ 62.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Goodwill and Other Intangible Assets, Net

17 unchanged sentences

Amortization expense for intangible assets was $ 10.5 million, $ 9.8 million, and $ 10.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

In February 2023, the Company paid Bigfoot Biomedical, Inc.

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

The acquired patent assets have a useful life of 11 years.

Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheet as of December 31, 2025 is expected to be as follows:

3 unchanged sentences

As of December 31, 2025 and 2024, the total carrying value of the Company’s investments in equity securities without readily determinable fair values was $ 19.1 million and $ 21.9 million, respectively.

There were no unrealized gains or losses recorded due to changes in the fair value of equity investments during the years ended December 31, 2024 and 2022, and the unrealized gain recorded was insignificant for the year ended December 31, 2023.

Refer to “ Assets Measured at Fair Value on a Non-Recurring Basis ” in Note 16 for disclosures regarding equity securities without readily determinable fair values.

The Company recorded a $ 2.8 million impairment associated with one equity security during the year ended December 31, 2025, which is included in other income (expense), net.

There was no impairment during the year ended December 31, 2024 and the impairment recorded during the year ended December 31, 2023 was insignificant.

As of both December 31, 2025 and December 31, 2024 cumulative gains were insignificant.

Debt Securities

In 2023, the Company made a strategic investment in debt securities of a privately held entity in the amount of $ 5.0 million, which is included in other assets on the consolidated balance sheets.

In 2023, the Company made a strategic investment in debt securities of a privately held entity in the amount of $ 5 million.

The debt securities mature in December 2026, unless converted earlier.

The amortized cost basis of the debt securities was $ 5.0 million at both December 31, 2025 and December 31, 2024.

At December 31, 2025, the Company’s debt securities had no remaining fair value, due to a $ 4.7 million allowance for credit losses recorded on these securities based on liquidity concerns.

The debt securities had a fair value of $ 4.7 million as of December 31, 2024.

The amount of interest earned on the investment for the years ended December 31, 2025 and 2024 was insignificant.

Refer to Note 16 for the fair values.

In 2023, the Company made a strategic investment in a privately held entity in the amount of $ 2.0 million.

The investment is a debt security with embedded derivatives and is accounted for by applying the fair value option, as this approach best reflects the underlying economics of the transaction.

The fair value of the investment is calculated using a combination of the market approach and income approach methodologies and is reported within other assets on the consolidated balance sheet.

Refer to Note 16 for the fair values and unrealized losses recorded.

The fair value of the investment is calculated using a combination of the market approach and income approach methodologies.

The investment had no fair value remaining at both December 31, 2025 and December 31, 2024.

Refer to Note 14 for unrealized losses recorded.

Accrued Expenses and Other Current Liabilities

6 unchanged sentences

Professional and consulting services 58.2 51.6

Liability associated with secured borrowings

Other 113.9 81.2

9 unchanged sentences

Product warranty liability at end of year $ 16.8 $ 13.9 $ 10.2

In 2022, the Company issued two voluntary medical device correction notices (“MDCs”), one for its Omnipod DASH PDM relating to its battery and the other for its Omnipod 5 Controller relating to its charging port and cable.

The Company initially accrued an estimated liability of $ 68.9 million related to these MDCs, which was subsequently revised by $ 11.0 million due to significantly fewer customers requesting a replacement Omnipod DASH PDM prior the Company’s updated PDM being available, resulting in a net charge of $ 57.9 million for the year ended December 31, 2022.

During the year ended December 31, 2023, the Company further revised the estimated liability for these MDCs by 11.5 million.

This change in estimate primarily resulted from lower shipping costs for replacement DASH PDMs and lower expected distribution costs for Omnipod 5 Controllers.

The liability related to the MDCs included in product warranty liability at December 31, 2023 was insignificant and no amount was remaining as of December 31, 2024.

During the year ended December 31, 2023, the Company revised the estimated liability for the voluntary medical device correction notices (“MDCs”) issued in 2022 related to the Omnipod DASH PDM and the Omnipod 5 Controller by $ 11.5 million.

This change in estimate primarily resulted from lower shipping costs for replacement Omnipod DASH PDMs and lower expected distribution costs for Omnipod 5 Controllers.

As of December 31, 2025, the Company leased certain automobiles and facilities for offices, laboratories, manufacturing, and warehousing, all of which were classified as operating leases.

Certain of the Company’s operating leases include escalating rental payments, some include the option to extend for up to 10 years, and some include options to terminate the leases at certain times within the lease term.

In 2023, the Company also leased land and a manufacturing building in Malaysia, which were classified as finance leases until the Company exercised its option to purchase this property for $ 18.1 million in 2024.

Lease assets and lease liabilities were included in the following consolidated balance sheet accounts in the amounts shown:

In 2024, the Company exercised its option to purchase land and a manufacturing building in Malaysia for $ 18.1 million, which were classified as finance leases prior to the purchase.

Operating lease assets and liabilities were included in the following consolidated balance sheet accounts in the amounts shown:

Years Ended December 31,

(in millions) 2025 2024

Operating leases

Operating lease asset:

4 unchanged sentences

Total operating lease liabilities $ 51.9 $ 42.1

Finance leases

Finance lease assets:

Property, plant and equipment, net $ — $ 37.8

Finance lease liabilities:

Current portion of long-term debt and finance leases $ — $ 22.9

The Company’s operating and financing lease cost was as follows:

1 unchanged sentence

(in millions)

2025 2024 2023

Operating lease cost $ 10.6 $ 7.3 $ 8.8

24 unchanged sentences

Present value of future minimum lease payments $ 51.9

As of December 31, 2024, the weighted average remaining lease term for operating leases was 11.4 and the weighted-average discount rate used to determine the operating lease liability was 8.1 %.

As of December 31, 2025, the weighted average remaining lease term for operating leases was 10.0 years and the weighted-average discount rate used to determine the operating lease liability was 7.9 %.

The components of debt consisted of the following:

5 unchanged sentences

2025 $ — — % $ 8.7 5.90 %

Equipment financing

2025 — — % 60.9 5.74 %

2025 61.0 5.74 % 63.3 5.73 %

Convertible Senior Notes

3 unchanged sentences

Revolving Credit Facility

Equipment financing

2030 — — % — — %

2031 477.5 7.05 % 482.5 8.68 %

Finance lease obligation (1)

Senior Unsecured Notes

2033 450.0 6.84 % —

Unamortized debt discount 2025 - 2033 ( 3.5 ) ( 5.4 )

3 unchanged sentences

Total long term-debt, net $ 930.8 $ 1,296.1

(1) Refer to Note 14 for information regarding finance lease obligation.

Equipment Financings

The Company has two outstanding loans secured by manufacturing lines located at the Company’s Acton, Massachusetts manufacturing facility.

Additionally, in May 2023, the Company entered into an arrangement under which the Company may obtain up to $ 24.0 million of financing for manufacturing equipment.

The Company is involved in the construction of the manufacturing equipment;

accordingly, it is included in property, plant and equipment on the consolidated balance sheets.

The Company’s obligation reflects payments made to date by the third-party bank to the equipment manufacturer, net of discount and less repayment of principal.

The financing obligation will mature 36 months following completion of construction.

The Company has an outstanding loan that is secured by the Company’s Acton, Massachusetts headquarters.

The Mortgage contains non-financial customary covenants, none of which are considered restrictive to the Company’s operations.

The Company has outstanding loans secured by manufacturing lines located at the Company’s Acton, Massachusetts manufacturing facility.

Senior Secured Credit Agreement

The Company’s senior secured credit agreement (the “Credit Agreement”) includes a $ 500 million senior secured term loan B (the “Term Loan B”) and a senior secured revolving credit facility (“Revolving Credit Facility”).

In March 2025, the Company upsized the borrowing capacity under its Revolving Credit Facility to $ 500 million and extended the maturity date to March 2030.

In June 2025, the Company amended its Term Loan B to bear interest at a rate of Secured Overnight Financing Rate (“SOFR”) plus 2.00 %.

At the same time, the Company further amended its Revolving Credit Facility such that borrowings bear interest at a rate of SOFR plus an applicable margin of 1.50 % to 2.00 % based on the Company’s total leverage ratio.

In January 2024, the Company amended the Term Loan B to bear interest at a rate of SOFR plus 3.0 %, with a 0 % SOFR floor.

In August 2024, the Company further amended its Term Loan B to bear interest at a rate of SOFR plus 2.5 % and extended the term to August 2031.

The Term Loan B contains leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt.

The Revolving Credit Facility contains a covenant to maintain a specified leverage ratio under certain conditions when there are amounts outstanding.

Borrowings under the Credit Agreement are guaranteed by certain wholly owned domestic subsidiaries of the Company and are secured by substantially all assets of the Company and of each subsidiary guarantor, subject to certain exceptions.

Additionally, borrowings under the Credit Agreement are senior to all of the Company’s unsecured indebtedness.

Senior Unsecured Notes

In March 2025, the Company issued $ 450 million aggregate principal amount of 6.5 % senior unsecured notes due April 2033.

The net proceeds of $ 440.7 million were used to repurchase a portion of the Convertible Senior Notes.

The senior unsecured notes contains leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt, as well as other customary covenants.

Convertible Senior Notes

The Company has $ 800.0 million aggregate principal amount of 0.375 % Convertible Senior Notes due September 2026 (the “Convertible Senior Notes”) outstanding.

The Convertible Senior Notes are convertible into cash, shares of the Company’s common stock, or the combination of cash and shares of common stock, at the Company's election, at an initial conversion rate of 4.4105 shares of common stock per $1,000 principal amount of the notes, which is equivalent to a conversion price of $ 226.73 per share, subject to adjustment under certain circumstances.

The notes will be convertible at the holder's election, from June 1, 2026 through August 28, 2026 and prior to then under certain circumstances as set forth in the agreement.

Additionally, on or after September 6, 2023, the Company may redeem for cash all or a portion of the Convertible Senior Notes, if its stock price has been equal to or greater than $ 294.75 fo r at least 20 of the prior 30 consecutive trading days including the date which the Company provides notice of redemption .

Additional interest of 0.5 % per annum is payable if the Company fails to timely file required documents or reports with the Securities and Exchange Commission (“SEC”).

If the Company merges or consolidates with a foreign entity, the Company may be required to pay additional taxes.

The Company determined that the higher interest payments and tax payments required in certain circumstances were embedded derivatives that should be bifurcated and accounted for at fair value.

The Company assessed the value of the embedded derivatives at each balance sheet date and determined they had nominal value.

In conjunction with the issuance of the Convertible Senior Notes, the Company purchased capped call options (“Capped Calls”) on the Company’s common stock with certain counterparties to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to provide a source of cash to settle a portion of its cash payment obligation) if at the time of conversion its stock price exceeds the conversion price under the Convertible Senior Notes.

The Capped Calls have an initial strike price of $ 335.90 per share, which represents a premium of 100 % over the last reported sale price of the Company’s common stock of $ 167.95 per share on the date of the transaction.

The Capped Calls cover 3.5 million shares of common stock and are recorded within stockholders’ equity on the consolidated balance sheets.

As of December 31, 2024 and 2023, the net carrying amount of the Notes was $ 794.9 million and $ 791.8 million, respectively, net of unamortized issuance costs of $ 5.1 million and $ 8.2 million, respectively.

The components of interest expense related to the Notes were as follows:

In 2025, the Company repurchased $ 419.9 million aggregate principal amount ($ 417.6 million net of issuance costs) of 0.375 % Convertible Senior Notes due September 2026 (the “Convertible Senior Notes”) for $ 541.5 million in cash, which resulted in a $ 123.9 million loss on extinguishment.

The Company subsequently paid $ 510.7 million to redeem the remaining Convertible Senior Notes.

The difference between this cash paid and the $ 380.1 million aggregate principal amount ($ 378.4 million net of issuance costs) redeemed resulted in a $ 132.3 million decrease to additional paid in capital.

In connection with these transactions, the Company received $ 164.6 million of proceeds from the settlement of capped calls options associated with the Convertible Senior Notes.

As of December 31, 2024 unamortized issuance costs associated with the Convertible Senior Notes were $ 5.1 million.

The components of interest expense related to the Convertible Senior Notes were as follows:

Years Ended December 31,

6 unchanged sentences

$ 2.6 $ 6.0 $ 6.0

Senior Secured Credit Agreement

In May 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”), which includes a $ 500 million seven-year senior secured term loan B (the “Term Loan”).

On November 30, 2022, the Company amended the Term Loan to bear interest at a rate of SOFR plus 3.25 %, with a 0.50 % SOFR floor and in January 2024, amended it again to bear interest at a rate of SOFR plus 3.0 %, with a 0 % SOFR floor.

At the same time, the Company amended its senior secured revolving credit facility (the “Revolving Credit Facility”) discussed below such that outstanding borrowings bear interest at a rate of SOFR plus an applicable margin of 2.375 % to 3.0 % (previously 2.625 % to 3.25 %) based on the Company’s net leverage ratio and credit rating.

In August 2024, the Company amended its Term Loan to bear interest at a rate of SOFR plus 2.5 % and extended the term to August 2031.

At the same time, the Company amended its Revolving Credit Facility such that outstanding borrowings bear interest at a rate of SOFR plus an applicable margin of 2 % to 2.5 % based on the Company’s net leverage ratio.

The Term Loan contains leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt.

Under the same agreement, the Company obtained a Revolving Credit Facility.

In 2023, the Company increased the borrowing capacity under the Revolving Credit Facility to $ 300.0 million and extended the maturity date to the earlier of June 2028 or 91 days prior to the maturity date of the Company's term loan if still outstanding.

The Revolving Credit Facility contains a covenant to maintain a specified leverage ratio under certain conditions when there are amounts outstanding.

Additionally, borrowings under the Credit Agreement are senior to all of the Company’s unsecured indebtedness, including the Convertible Senior Notes.

Carrying Value

The carrying value amounts of the Company’s debt were as follows:

1 unchanged sentence

(in millions) 2025 2024

$ 475.1 $ 479.2

Mortgage $ — $ 60.6

Convertible Senior Notes — 794.9

Equipment financings 34.8 49.3

Finance lease obligation — 22.9

Term Loan B 473.0 475.1

Senior Unsecured Notes 441.4 —

Total debt, net $ 949.2 $ 1,379.8

7 unchanged sentences

(in millions) Level 1 Level 2 Level 3 Total

Term Loan (1)

Term Loan B (1)

$ 482.3 $ — $ — $ 482.3

Convertible Senior Notes (2)

Senior Unsecured Notes (1)

469.2 — — 469.2

2 unchanged sentences

$ 951.4 $ — $ 34.8 $ 986.2

$ 485.8 $ 1,018.8 $ 109.9 $ 1,614.5

Fair Value Measurements at December 31, 2024

(in millions) Level 1 Level 2 Level 3 Total

Term Loan (1)

Term Loan B (1)

$ 485.8 $ — $ — $ 485.8

5 unchanged sentences

$ 485.8 $ 1,018.9 $ 109.9 $ 1,614.7

(1) Fair value was determined using quoted market prices.

(2) Fair value was determined using market prices obtained from third-party pricing sources.

(1) Fair value was determined using quoted market prices obtained from third-party pricing sources.

(2) Fair value approximates carrying value and was determined using the cost basis.

Assets Measured at Fair Value on a Recurring Basis

The following tables provide a summary of assets that are measured at fair value on a recurring basis:

Financial Instruments Measured at Fair Value on a Recurring Basis

The following tables provide a summary of financial instruments that are measured at fair value on a recurring basis:

Fair Value Measurements at December 31, 2025

4 unchanged sentences

Interest rate swaps (2)

Debt securities (3)

Total assets at fair value

$ 716.1 $ 1.0 $ — $ 717.1

Interest rate swaps (2)

$ — $ 0.8 $ — $ 0.8

Fair Value Measurements at December 31, 2024

3 unchanged sentences

819.9 — — 819.9

Term deposits (1)

— 53.5 — 53.5

Interest rate swaps (2)

— 22.8 — 22.8

Debt securities (3)

Other investments (3)

Total assets at fair value

$ 953.3 $ 5.4 $ 4.7 $ 963.5

1 unchanged sentence

(2) Fair value represents the estimated amounts the Company would receive or pay to terminate the contracts and is determined using industry standard valuation models and market-based observable inputs, including credit risk and interest rate yield curves.

The fair value of the swaps is included in other assets on the consolidated balance sheets.

(3) Fair value is determined using industry standard valuation models and market-based unobservable inputs, including credit spread and risk free rate.

The range used for the risk free rate is 4.0 % - 4.7 %.

Judgement is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements.

The fair value of the swaps is included in other assets and other liabilities at December 31, 2025 and in prepaid expenses and other current assets at December 31, 2024.

(3) Fair value is determined using a discounted cash flow valuation model and market-based unobservable inputs, including credit spread, and risk free rate ranging from 4.0 % - 4.7 %.

Judgment is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements.

Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized.

1 unchanged sentence

(in millions) Debt Securities Other Investments Total

Balance at December 31, 2022

Purchases 5.0 2.0 7.0

Unrealized gain included in other (expense) income, net

Unrealized loss on securities included in other comprehensive income ( 0.3 ) — ( 0.3 )

Balance at December 31, 2023

Unrealized loss included in other (expense) income, net

— ( 3.8 ) ( 3.8 )

Balance at December 31, 2024

December 31, 2023 $ 4.7 $ 3.8 $ 8.5

Unrealized loss included in other income (expense), net

— ( 3.8 ) ( 3.8 )

Assets Measured at Fair Value on a Non-Recurring Basis

Due to an observable price change in an orderly transaction during 2023, the Company adjusted the carrying value of certain investments in equity securities held as of December 31, 2023, which resulted in an unrealized gain of $ 0.8 million.

As of both December 31, 2024 and December 31, 2023, cumulative gains were $ 0.8 million.

The investments are classified as Level 2 in the fair value hierarchy.

December 31, 2024 4.7 — 4.7

Provision for credit loss included in selling, general and administrative expenses ( 4.7 ) — ( 4.7 )

December 31, 2025 $ — $ — $ —

Derivative Instruments

The Company manages interest rate exposure through the use of interest rate swap transactions with financial institutions acting as principal counterparties.

Under the Company’s interest rate swap agreements that expire on April 30, 2025, the Company receives variable rate interest payments and pays fixed interest rates of 0.95 % and 0.96 % on a total notional value of $ 480.0 million of its Term Loan.

The Company has designated the interest rate swaps as cash flow hedges.

Gains and losses on cash flow hedges reported in accumulated other comprehensive income are reclassified into interest expense, net in the consolidated statement of income when the hedged transactions affect earnings, that is, when interest expense is recognized for the Term Loan.

As of December 31, 2024, the Company estimates that $ 5.4 million of net gains related to the interest rate swaps included in accumulated other comprehensive income will be reclassified into the statement of income over the next 12 months.

In April 2025, the Company’s previous interest rate swaps expired and were replaced with interest rate swaps in which the Company receives variable rate interest payments and pays fixed interest at a weighted average rate of 3.47 % on a total notional value of $ 460.0 million of the Term Loan B.

The interest rate swaps have been designated as cash flow hedges.

As of December 31, 2025, the amount of net gains related to the interest rate swaps included in accumulated other comprehensive income estimated to be reclassified into the statement of income over the next 12 months was insignificant.

As discussed in Note 13, in 2025, the Company provided notice of redemption for the remaining $ 380.1 million aggregate principal amount of its outstanding Convertible Notes.

The Convertible Notes were fully redeemed in August 2025 for cash based on the Company's volume-weighted average stock price over the redemption period.

The election to redeem the notes in cash resulted in an embedded derivative, which required bifurcation from the host debt instrument.

The embedded derivative represented the variability in the cash settlement over the redemption period and subsequent changes in fair value based on the change in stock price over the redemption period were recognized in earnings.

As a result, the Company recognized a gain of $ 12.5 million within other income (expense), net for the year ended December 31, 2025.

The corresponding derivative asset was de-recognized upon settlement of the outstanding Convertible Notes, which resulted in a $ 12.5 million decrease to additional paid in capital.

Commitments and Contingencies

Legal Proceedings

On December 3, 2024, a jury verdict was returned in favor of the Company in the matter of Insulet Corporation vs.

EOFlow Co., Ltd.

pending in the U.S.

District Court of Massachusetts Case No.

1:23-cv-11780.

The jury found that EOFlow Co., Ltd.

(“EOFlow”) and several other defendants misappropriated certain of the Company’s trade secrets.

The jury awarded the Company $ 170 million in compensatory damages from EOFlow and an additional $ 282 million in exemplary damages from EOFlow for willful and malicious misappropriation, for a total damages award of $ 452 million.

On January 24, 2025, EOFlow moved for a directed verdict and for a new trial, as well as for a reduction of the jury award.

On January 24, 2025, the Company moved for a permanent worldwide injunction on the sale of EOFlow’s EOPatch 2 product and any other products that embody Insulet’s trade secrets.

EOFlow and other defendants may seek to appeal the verdict.

EOFlow may not be able to satisfy this damage award;

accordingly, it has not been recorded in the Company’s consolidated statement of income.

In June 2020, Roche Diabetes Care, Inc.

(“Roche”) filed a patent infringement lawsuit against the Company in the United States District Court for the District of Delaware alleging that the Company’s manufacture and sale of its Omnipod Insulin Management System, including Pods, PDMs, and other components of the system, and kits in the United States infringed Roche’s now-expired U.S.

Patent 7,931,613.

Roche was seeking monetary damages and attorneys’ fees and costs.

In July 2022, the Company entered into a Settlement and License Agreement (the “Settlement Agreement”) with Roche to settle the pending litigation.

Pursuant to the Settlement Agreement, in exchange for a release of claims, mutual covenant not to sue for five years , and license to the patent in suit from Roche, the Company made a one-time payment of $ 20.0 million to Roche.

On July 12, 2022, following the filing by the parties of a Stipulation of Dismissal, the Court ordered the case dismissed with prejudice.

The $ 20.0 million charge is included in selling, general and administrative expenses for the year ended December 31, 2022.

On April 24, 2025, the United States District Court for the District of Massachusetts entered final judgment in favor of Insulet Corporation in its ongoing litigation against EOFlow Co., Ltd.;

EOFlow, Inc.;

Nephria Bio, Inc.;

and EOFlow’s CEO, Jesse Kim (collectively, “Defendants”), Insulet Corp.

et al ., 1:23-cv-11780-FDS (D.

The litigation concerned the Defendants’ misappropriation of Insulet’s proprietary trade secrets relating to the design and manufacture of the Omnipod insulin patch pump.

On December 3, 2024, a unanimous jury found four trade secrets asserted by Insulet valid and misappropriated and awarded Insulet total damages of $ 452 million, composed of $ 170 million in compensatory damages and $ 282 million in exemplary damages.

The district court’s April 24, 2025 orders upheld the jury verdict and further entered a permanent injunction against Defendants.

The injunction prohibits Defendants and others subject to the order from using, possessing, selling, distributing, or seeking regulatory approval for any products that were designed, developed, or manufactured, in whole or in part, using or relying on Insulet’s trade secrets.

The injunction is worldwide and took effect immediately subject to a limited exception that permits six months of continuing sales to those patients of EOFlow that existed in the Republic of Korea and the European Union as of October 2023.

The permanent injunction further requires EOFlow to assign certain patent applications to Insulet, disgorge any break-up fees received from Medtronic in connection with a previously contemplated acquisition, and submit to ongoing audits to ensure compliance with the district court’s orders.

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

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

Additionally, Insulet has cross-appealed.

Further, EOFlow filed a motion to the court of appeals requesting that the permanent injunction against it be stayed in its entirety during the pendency of the appeal.

On July 7, 2025, the court of appeals granted a stay in part “only to the extent that the district court’s temporary stay (set to end October 24, 2025), regarding EOFlow patients in the Republic of Korea and the European Union, is extended (1) to include patients residing in the European Union who were using the relevant product(s) as of April 24, 2025, and (2) until further notice of the court.” Briefing in EOFlow’s appeal was completed on October 17, 2025, and oral argument was held before the court of appeals on January 5, 2026.

The Company is, from time to time, involved in the normal course of business in various legal proceedings, including intellectual property, contract, employment, and product liability suits.

The Company does not expect the outcome of these proceedings, either individually or in the aggregate, to have a material adverse effect on its results of operations.

Contract Dispute

Throughout 2022, the Company was engaged in negotiations over a contractual dispute involving in-licensed intellectual property.

In December 2022, the Company entered into an agreement with Automated Glucose Control LLC (the “Asset Purchase Agreement”).

Pursuant to the Asset Purchase Agreement, the Company made a one-time payment of $ 25.0 million for the acquisition of developed technology and patents and the release of future obligations, including any future royalty obligations.

This amount, together with transaction costs, was allocated between the assets acquired and the settlement of the contractual dispute.

A value of $ 12.0 million was allocated to acquired developed technology and a value of $ 9.5 million was allocated to acquired patents.

The acquired developed technology and patents are being amortized over their useful lives of 13 years.

The remaining $ 3.6 million was allocated to the settlement and is included in selling, general and administrative expenses for the year ended December 31, 2022.

Letters of Credit

The Company had $ 0.8 million and $ 20.9 million of letters of credit outstanding as of December 31, 2024 and December 31, 2023, respectively.

The letters of credit outstanding at December 31, 2023 primarily served as security for our manufacturing facility in Malaysia until we purchased the property in 2024.

Stock-Based Compensation Expense

Equity Award Plan

In May 2017, the Company adopted the 2017 Stock Option and Incentive Plan (the “2017 Plan”), which replaced its previous stock option and incentive plan (the “2007 Plan”).

The 2017 Plan provides for a maximum of 5.2 million shares to be issued, in addition to the number of shares related to awards outstanding under the 2007 Plan that are terminated by expiration, forfeiture, or cancellation.

In May 2025, the Company adopted the 2025 Stock Option and Incentive Plan (the “2025 Plan”), which replaced its previous stock option and incentive plan.

The 2025 Plan provides for a maximum of 7.4 million shares to be issued, in addition to the number of shares related to awards outstanding under the 2017 and 2007 plans that are terminated by expiration, forfeiture, or cancellation.

The shares can be issued as stock options, restricted stock units, stock appreciation rights, deferred stock awards, restricted stock, unrestricted stock, cash-based awards, performance share awards, or dividend equivalent rights.

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The following summarizes the activity under the Company’s stock option plans:

Options Weighted Average

Weighted Average

Exercise Price Weighted Average Remaining Contractual Term

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The Company determines the expected volatility based primarily upon the historical volatility of the Company’s common stock over a period commensurate with the option’s expected term.

The assumptions used in the Black-Scholes pricing model for options granted during each year, along with the weighted-average grant-date fair values, were as follows:

The weighted-average assumptions used in the Black-Scholes pricing model for options granted during each year, along with the weighted-average grant-date fair values, were as follows:

Years Ended December 31,

12 unchanged sentences

Activity for RSUs is as follows:

Shares Weighted

Outstanding at December 31, 2024

10 unchanged sentences

Performance stock units (“PSUs”) generally vest over a three-year period from the grant date and include both a service and performance component.

Stock-based payments that contain performance conditions are recognized when such conditions are probable of being achieved.

Certain of these PSUs could ultimately vest at up to 200 % of the target award depending on the achievement of the performance criteria.

Beginning in 2025, the Company added a market component to PSUs based on relative total shareholder return (total shareholder return for the Company compared with total shareholder return of a peer group).

PSUs are recognized when performance conditions are probable of being achieved.

Certain of these PSUs could ultimately vest at up to 250 % of the target award depending on the achievement of the performance and market criteria.

The Company determines the fair value of PSUs based on the closing price of its common stock on the date of grant.

The Company uses the Monte Carlo model to estimate the probability of satisfying the market condition.

Activity for PSUs is as follows:

Shares Weighted

Outstanding at December 31, 2024

2 unchanged sentences

Vested ( 83,216 ) $ 239.48

Performance adjustment (1)

33,742 $ 272.27

Forfeited ( 99,907 ) $ 226.81

1 unchanged sentence

206,850 $ 241.67

(1) Includes a 675 share adjustment to awards granted in 2021 for the three-year performance cycle award period ended 2023, based on the actual performance achievement of 111 %.

(2) Based on 169 % achievement of the performance metrics, approximately 83,000 shares of Insulet were earned for awards that were granted in 2022 for the performance period ended December 31, 2024.

(1) Represents the adjustment to awards granted in 2022 for the three-year performance cycle award period ended 2024, based on the actual performance achievement of 169 %.

These shares vested in February 2025 .

(2) Based on 200 % achievement of the performance metrics, 53 thousand shares of Insulet were earned for awards that were granted in 2023 for the performance period ended December 31, 2025.

These shares vest in February 2026.

The weighted-average assumptions used in the Monte Carlo model for PSUs granted were:

Risk-free interest rate

Expected stock price volatility 41.7 %

Peer group stock price volatility 46.0 %

Correlation of returns 29.2 %

The weighted-average grant-date fair value per share of PSUs granted was $ 166.86 and $ 276.36 for the years ended December 31, 2024 and 2023, respectively.

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This cost is expected to be recognized over a weighted average period of 0.4 years.

Accumulated Other Comprehensive (Loss) Income

Share Repurchase Program

In March 2025, the Company’s Board of Directors authorized a program to repurchase up to $ 125 million in common stock through December 31, 2026 to offset dilution from stock-based compensation.

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

Accumulated Other Comprehensive Income (Loss)

Changes in the components of accumulated other comprehensive income (loss), net of tax, were as follows:

(in millions) Foreign Currency Translation Adjustment Unrealized Losses on Securities

Unrealized Gains on Cash Flow Hedges Accumulated Other Comprehensive (Loss) Income

Unrealized Gains on Cash Flow Hedges Accumulated Other Comprehensive Income (Loss)

Balance, December 31, 2022

3 unchanged sentences

Amounts reclassified to net income (1)

— — ( 20.3 ) ( 20.3 )

Balance, December 31, 2023

3 unchanged sentences

Amounts reclassified to net income (1)

— — 26.0 26.0

Balance, December 31, 2024

5 unchanged sentences

$ 7.5 $ ( 0.3 ) $ 5.3 $ 12.5

(1) Income tax expense on cash flow hedges in other comprehensive income (loss) before reclassification for the year ended December 31, 2024 was $ 3.9 million.

There was no tax impact for the years ended December 31, 2023 and 2022.

(1) Income tax expense on cash flow hedges in other comprehensive income (loss) before reclassification for the year ended December 31, 2025 and December 31, 2024 were $ 1.2 million and $ 3.9 million, respectively.

There was no tax impact for the year ended December 31, 2023 .

Additionally, there is no income tax impact on currency translation adjustments.

Benefit Plans

Defined Contribution Plan

The Company maintains a tax-qualified 401(k) retirement plan in the United States.

The Company generally makes a matching contribution equal to 50 % of each employee’s elective contribution to the plan up to 6 % of the employee’s eligible pay.

Through 2025, the Company generally made a matching contribution equal to 50 % of each employee’s elective contribution to the plan up to 6 % of the employee’s eligible pay.

In addition, the Company offers defined contribution plans for eligible employees in its foreign subsidiaries.

The total amount contributed by the Company to these defined contribution plans was $ 17.9 million, $ 13.3 million, and $ 12.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Deferred Compensation Plan

The Company has an unfunded, non-qualified deferred compensation plan for non-employee directors that allows participants to defer receipt of RSUs or cash compensation in the form of stock until a later date.

Deferred awards are credited to a deferred stock account.

The shares are held in a rabbi trust, which is classified and accounted for as equity in a manner consistent with the accounting for treasury stock.

As of December 31, 2025, 3,142.5 shares were held in the trust.

No shares were held in the trust as of December 31, 2024.

The shares will be distributed when board service ceases.

and foreign components of income before income taxes were as follows:

10 unchanged sentences

30.1 18.8 7.8

58.9 ( 111.1 ) 0.1

State 4.8 ( 18.6 ) —

( 1.5 ) ( 7.2 ) 0.4

Total deferred tax (benefit) expense

Total deferred tax expense (benefit)

62.3 ( 136.9 ) 0.5

Income tax (benefit) expense

Income tax expense (benefit)

$ 92.4 $ ( 118.1 ) $ 8.3

Reconciliations of the U.S.

federal statutory rate to the Company’s effective tax rate are as follows:

Years Ended December 31,

2024 2023 2022

federal statutory rate to the Company’s effective tax rate for the year ended December 31, 2025 are as follows:

Year Ended December 31, 2025

(in millions)

Amount Percent

federal statutory tax rate $ 71.3 21.0 %

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects

United Kingdom 4.8 1.4

Other foreign jurisdictions ( 0.1 ) —

Effect of cross-border tax laws — —

R&D ( 14.6 ) ( 4.3 )

Foreign tax credit ( 3.6 ) ( 1.1 )

Change in valuation allowance 0.5 0.1

Nontaxable or nondeductible items

Extinguishment of debt 22.8 6.7

Other nondeductible items 2.0 0.6

Other ( 0.1 ) —

Changes in unrecognized tax benefits 3.6 1.1

Effective tax rate $ 92.4 27.2 %

(1) State and local taxes in Colorado comprise the majority of this category.

Reconciliations of the U.S.

federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023 are as follows:

Year Ended December 31, 2024 Year Ended December 31, 2023

Amount Percent Amount

federal statutory rate

1 unchanged sentence

Foreign tax rate differential

3.2 1.1 1.3 0.6

State taxes, net of federal benefit 6.9 2.3 5.2 2.4

4 unchanged sentences

Permanent items

Foreign income taxed in the U.S.

3.2 1.1 1.6 0.7

Change in valuation allowance ( 179.4 ) ( 59.8 ) ( 23.2 ) ( 10.8 )

Tax rate changes — 0.5 ( 30.9 )

Change to prior year R&D credit

2 unchanged sentences

Effective tax rate $ ( 118.1 ) ( 39.3 ) % $ 8.3 3.9 %

The income tax benefit in 2024 primarily resulted from the release of substantially all of the valuation allowance maintained against deferred tax assets discussed below and the completion of a research and development (“R&D”) credit study for the

periods 2017 through 2022, which resulted in a $ 8.3 million income tax benefit from the increase to U.S.

federal and state R&D credit carryforwards.

During the year ended December 31, 2024, following the evaluation of the positive and negative evidence including cumulative income (loss) position, revenue growth, current profitability, and expectations regarding future forecasted income, the Company released a substantial portion of its valuation allowance against deferred tax assets.

For all periods presented, no provision for income taxes has been provided on undistributed earnings of the Company’s foreign subsidiaries, except for Canada, because such earnings are indefinitely reinvested in the foreign operations.

The Company has recorded a deferred tax liability for the tax costs on these earnings to the extent they cannot be repatriated in a tax-free manner.

A deferred tax liability related to the repatriation of approximately $ 57.3 million indefinitely reinvested earnings has not been recorded.

No deferred tax liability has been recorded related to the repatriation of $ 127.2 million in earnings that are indefinitely reinvested.

Events that could trigger a tax liability include, but are not limited to, distributions, reorganizations or restructurings, and/or tax law changes.

1 unchanged sentence

The Company files federal, state, and foreign tax returns, which are subject to examination by the relevant tax authorities.

Internal Revenue Service is currently examining the Company’s U.S.

federal income tax return for 2023.

The Company’s U.S.

federal and state tax returns are currently open to examination for tax years 2021 through 2023.

federal and state tax returns are currently open to examination for tax years 2022 and 2024.

In addition, the Company’s U.S.

4 unchanged sentences

Unrecognized tax benefits at beginning of year

$ 12.8 $ 5.0 $ —

Additions related to current period tax positions

1 unchanged sentence

Unrecognized tax benefits at end of year

As of December 31, 2024 and 2023, the Company had unrecognized tax benefits that would impact the effective tax rate if recognized of $ 12.8 million and $ 5.0 million, respectively.

As of December 31, 2022, the Company had no unrecognized tax benefits that would impact the effective tax rates.

$ 16.7 $ 12.8 $ 5.0

As of December 31, 2025, 2024, and 2023, the Company had unrecognized tax benefits that would impact the effective tax rate if recognized of $ 16.7 million, $ 12.8 million, and $ 5.0 million, respectively.

No interest and penalties were recognized related to uncertain tax positions for the years ended December 31, 2025, 2024, and 2023, respectively, and no interest or penalties were accrued as of December 31, 2025 and 2024, respectively.

The Company does not anticipate that the amount of existing unrecognized tax benefits will materially increase or decrease within the next 12 months.

Income taxes paid by jurisdiction for the year ended December 31, 2025 were as follows:

(in millions)

federal $ 14.7

state and local

United Kingdom

Total income taxes paid

The components of the net deferred tax asset were as follows:

6 unchanged sentences

Accrued expenses 39.0 34.5

Amortization of debt discount 4.2 7.8

Inventory capitalization 8.2 8.2

8 unchanged sentences

Capitalized contract acquisition costs ( 17.4 ) ( 13.1 )

Unrealized gains on cash flow hedges ( 1.2 ) ( 5.1 )

Other ( 2.0 ) ( 8.6 )

3 unchanged sentences

Net deferred tax asset $ 81.6 $ 141.7

The Company regularly assesses the need for a valuation allowance against its deferred tax assets.

In making such assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets and, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

During the year ended December 31, 2024, the Company recorded a $ 182.5 million non-cash income tax benefit related to the release of a substantial portion of its valuation allowance against deferred tax assets.

This was based on the Company’s evaluation of the positive and negative evidence including cumulative income (loss) position, revenue growth, current profitability and expectations regarding future forecasted income.

The remaining change in the valuation allowance is comprised of a $ 4.8 million increase related to current year state R&D credits, partially offset by $ 1.3 million of federal R&D credits that will not be utilized prior to expiration.

The valuation allowance at December 31, 2024 primarily relates to certain U.S.

state tax credits and state net operating loss carryforwards.

During the year ended December 31, 2025, the Company recognized a $ 69.2 million decrease in deferred tax assets associated with the One Big Beautiful Bill Act primarily resulting from the immediate expensing of domestic capitalized research and development expenditures.

The $ 6.7 million increase in the valuation allowance for the year ended December 31, 2025 was primarily due to an increase in state research and development credits.

As of December 31, 2025, the Company’s net operating loss carryforwards were as follows:

2 unchanged sentences

Net Operating Loss Carryforwards

2032 - 2037 $ 40.2

2026 - 2042 $ 196.4

Indefinite $ 1.5

As of December 31, 2025, the Company’s tax credit carryforwards were as follows:

4 unchanged sentences

State 2026 - 2045 $ 39.6

The above loss and credit carryforwards, which may be utilized in a future period, may be subject to limitations based on changes in the ownership of the Company ordinary shares.

The Company's net operating loss and tax credit carryforwards may be subject to limitations as a result of changes in the ownership of the Company's stock.

Earnings Per Share

9 unchanged sentences

(in thousands) 70,348 70,076 69,751

70,076 69,751 69,375

Convertible Senior Notes

2 unchanged sentences

Restricted stock units 204 136 68

Weighted average number of common shares outstanding, diluted

(in thousands)

Weighted average number of common shares outstanding, diluted (in thousands)

71,886 73,891 73,633

7 unchanged sentences

Stock options 129 209 163

Convertible Senior Notes

Total 554 673 485

17 unchanged sentences

Deferred tax valuation allowance $ 23.9 $ 6.7 $ — $ — $ 30.6

Reserve for inventory excess and obsolescence

$ 24.3 $ 6.9 $ — $ ( 6.7 ) $ 24.5

Year Ended December 31, 2024

2 unchanged sentences

Deferred tax valuation allowance $ 202.9 $ 5.1 $ — $ ( 184.2 ) $ 23.9

Reserve for inventory excess and obsolescence

$ 9.8 $ 20.4 $ — $ ( 5.9 ) $ 24.3

Year Ended December 31, 2023

3 unchanged sentences

$ 222.8 $ 73.5 $ 3.6 $ ( 97.1 ) $ 202.9

(1) Other represents the increase in deferred tax valuation allowance resulting from the adoption of ASU 2020-06, Debt — Debt with Conversations and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity's Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.

Refer to Note 2 to the consolidated financial statements included in Item 8 for additional information.

Reserve for inventory excess and obsolescence

$ 5.5 $ 5.9 $ — $ ( 1.5 ) $ 9.8

Changes in and Disagreements With Accountants On Accounting And Financial Disclosure

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 8. Financial Statements and Supplementary Data