What changed in this filing

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Item 1. Financial Statements

2025-04-30 compared with 2024-11-06 · 231 added, 279 removed, 462 unchanged (52% of the section changed)

3 unchanged sentences

(In thousands, except par value)

September 30, December 31,

Assets (Unaudited)

March 31, December 31,

Assets (Unaudited) (Note 1)

Current assets:

7 unchanged sentences

Operating lease right-of-use assets 101,017 85,306

Equity method investments

71,005 74,545

Other long-term assets 7,464 5,166

6 unchanged sentences

Current portion of convertible senior notes, net

40,736 40,670

Operating lease liabilities 20,713 18,208

10 unchanged sentences

Common stock, $ 0.001 par value;

200,000 shares authorized, 65,646 and 65,552 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively.

200,000 shares authorized, 66,568 and 66,264 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.

Additional paid-in capital 1,333,531 1,312,804

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Accumulated deficit ( 1,178,381 ) ( 1,047,825 )

3 unchanged sentences

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

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

2024 2023 2024 2023

Three Months Ended March 31,

Sales $ 234,422 $ 191,674

11 unchanged sentences

Interest expense ( 1,862 ) ( 1,897 )

Loss from equity method investments

Loss on extinguishment of debt — ( 1,268 )

5 unchanged sentences

Other comprehensive income (loss):

Unrealized gain on short-term investments

Unrealized gain (loss) on short-term investments

$ 423 $ ( 1,296 )

11 unchanged sentences

(In thousands)

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common Stock Additional

5 unchanged sentences

Shares Amount

Balance at June 30, 2024 65,435 $ 65 $ 1,260,392 $ ( 1,253 ) $ ( 1,025,329 ) $ 233,875

Balance at December 31, 2024 66,264 $ 66 $ 1,312,804 $ ( 1,947 ) $ ( 1,047,825 ) $ 263,098

Exercise of stock options 43 — 701 — — 701

6 unchanged sentences

Net loss — — — — ( 130,556 ) ( 130,556 )

Balance at September 30, 2024

Balance at March 31, 2025

66,568 $ 67 $ 1,333,531 $ 75 $ ( 1,178,381 ) $ 155,292

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2024

Common Stock Additional

1 unchanged sentence

Comprehensive

Income (Loss)

Deficit Total

5 unchanged sentences

Vesting of restricted stock units, net of shares withheld for taxes 104 — ( 1,759 ) — — ( 1,759 )

Issuance of common stock under Employee Stock Purchase Plan 402 — 6,286 — — 6,286

Stock-based compensation expense — — 21,591 — — 21,591

Purchase of capped call options related to convertible notes due 2029 — — ( 15,813 ) — — ( 15,813 )

— — ( 15,813 ) — — ( 15,813 )

Unwind of capped call options related to convertible notes due 2025 — — 184 — — 184

— — 184 — — 184

Unrealized gain on short-term investments

— — — 2,189 — 2,189

Foreign currency translation gains

— — — 312 — 312

Net loss — — — — ( 96,780 ) ( 96,780 )

Balance at September 30, 2024

65,646 $ 66 $ 1,282,354 $ 3,870 $ ( 1,048,580 ) $ 237,710

See accompanying notes to unaudited condensed consolidated financial statements.

Three Months Ended September 30, 2023

Common Stock Additional

Capital Accumulated

Comprehensive

Deficit Total

Stockholders’

Shares Amount

Balance at June 30, 2023 65,062 $ 65 $ 1,219,199 $ ( 1,193 ) $ ( 888,837 ) $ 329,234

Exercise of stock options 8 — 106 — — 106

Vesting of restricted stock units, net of shares withheld for taxes 121 — ( 1,945 ) — — ( 1,945 )

Issuance of common stock for Employee Stock Purchase Plan — — — — — —

Stock-based compensation expense — — 20,579 — — 20,579

Unrealized gain on short-term investments

— — — 349 — 349

Foreign currency translation losses — — — ( 1,362 ) — ( 1,362 )

Net loss — — — — ( 32,961 ) ( 32,961 )

Balance at September 30, 2023

Unrealized loss on short-term investments

— — — ( 1,296 ) — ( 1,296 )

Nine Months Ended September 30, 2023

Common Stock Additional

Capital Accumulated

Comprehensive

Deficit Total

Stockholders’

Shares Amount

Balance at December 31, 2022 64,513 $ 65 $ 1,170,888 $ ( 1,817 ) $ ( 729,189 ) $ 439,947

Exercise of stock options 71 — 1,267 — — 1,267

Vesting of restricted stock units, net of shares withheld for taxes 358 — ( 6,505 ) — — ( 6,505 )

Issuance of common stock under Employee Stock Purchase Plan 249 — 6,804 — — 6,804

Exercise of common stock warrants — — — — — —

Stock-based compensation expense — — 65,485 — — 65,485

Unrealized gain on short-term investments — — — 1,800 — 1,800

Foreign currency translation losses — — — ( 1,008 ) — ( 1,008 )

Net loss — — — — ( 42,715 ) ( 42,715 )

Balance at September 30, 2023

Balance at March 31, 2024

64,563 $ 65 $ 1,238,449 $ ( 935 ) $ ( 994,515 ) $ 243,064

3 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Activities

4 unchanged sentences

Provision for expected credit losses 1,431 2,198

Operating lease termination and other impairment charges

Operating lease and other impairment charges

Accretion (amortization) of discount or premium on short-term investments

( 1,148 ) ( 434 )

Loss from equity method investments

Stock-based compensation expense 25,489 22,039

19 unchanged sentences

Purchases of property and equipment ( 2,965 ) ( 4,457 )

Acquisitions, including in-process research and development, net of cash acquired

Purchases of intangible assets and strategic investments — ( 2,515 )

Net cash used in investing activities

Acquisition of in-process research and development

Net cash provided by (used in) investing activities

9,186 ( 5,056 )

5 unchanged sentences

Repurchase and retirement of common stock

Proceeds from issuance of common stock under Company stock plans, net of cash used to settle withholding taxes on vested restricted stock

Cash used to settle withholding taxes on vested restricted stock, net of proceeds from issuance of common stock under Company stock plans

( 4,688 ) ( 1,511 )

1 unchanged sentence

Net cash provided by (used in) financing activities

( 4,688 ) 13,586

Effect of foreign exchange rate changes on cash ( 1,880 ) ( 423 )

13 unchanged sentences

Organization and Basis of Presentation

Tandem Diabetes Care, Inc.

is a medical device company focused on the design, development and commercialization of technology solutions for people living with diabetes.

Tandem Diabetes Care, a global insulin delivery and diabetes technology company, manufactures and sells advanced automated insulin delivery systems that reduce the burden of diabetes management, while creating new possibilities for patients, their loved ones and healthcare providers.

Tandem Diabetes Care, Inc.

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The Company manufactures, sells, and supports insulin pump products that are designed to address the evolving needs and preferences of differentiated segments of the insulin-dependent diabetes market.

The Company recently expanded its insulin pump portfolio, which now includes both the t:slim X2 and the Tandem Mobi.

The Company offers an insulin pump portfolio, which includes both the t:slim X2 and the Tandem Mobi.

Both pumps feature Control-IQ technology, which is the Company’s advanced algorithm for managing insulin delivery, using information received from integrated continuous glucose monitoring (CGM) sensors.

New software for the insulin pumps may be updated remotely by the individual users as new advancements become available and are compatible with other complementary digital health offerings, such as the mobile application and cloud-based diabetes management applications.

The Company’s insulin pump systems products are generally considered durable medical equipment and have an expected lifespan of at least four years .

New software for the insulin pumps may be updated remotely by the individual users as new advancements become available and are compatible with other complementary digital health offerings, such as the Company’s mobile application and cloud-based diabetes management applications.

The Company’s insulin pump products are generally considered durable medical equipment and have an expected lifespan of at least four years .

In addition to insulin pumps, the Company sells single-use components that are used together with the pumps and are replaced every few days, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to a user’s body.

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Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s).

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (Annual Report), from which the consolidated balance sheet presented as of December 31, 2023 herein was derived.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (Annual Report), from which the condensed consolidated balance sheet presented as of December 31, 2024 herein was derived.

The condensed consolidated financial statements include the accounts of Tandem Diabetes Care, Inc.

7 unchanged sentences

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2024, as compared to those disclosed in the Annual Report.

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2025, as compared to those disclosed in the Annual Report.

Use of Estimates

17 unchanged sentences

Amortization of finite-lived intangible assets is recognized over their estimated useful lives on a straight-line basis.

The Company did not recognize any intangible asset impairment losses during the three and nine months ended September 30, 2024 and 2023.

Strategic Investments

The Company held equity investments totaling $ 30.4 million and $ 10.1 million in private companies at September 30, 2024 and December 31, 2023, respectively.

The investments were included as a component of other long-term assets on the condensed consolidated balance sheets at September 30, 2024 and December 31, 2023.

The investments were carried at cost minus impairment, if any, adjusted for changes in observable prices.

The Company monitors these investments to evaluate whether any increase or decline in its value has occurred, based on the implied value of recent company financings, public market prices of comparable companies and general market conditions.

In November 2024, the Company signed an investment agreement with one of its private company investees.

Per the agreement, the Company will invest an additional $ 46.4 million.

The investment is expected to close in the fourth quarter of 2024, and represent a cumulative investment of more than 20 % of the private company’s outstanding equity.

The investment will be recorded using the equity method and will be included in long-term assets on the Company’s consolidated balance sheet.

The Company did no t record any impairment charges related to its strategic investments in the three months ended September 30, 2024.

During the nine months ended September 30, 2024, the Company recorded an impairment charge of $ 2.0 million related to one of its investments in a private company.

The Company did no t record any impairment charges related to its strategic investments in the three and nine months ended September 30, 2023.

Approximately $ 22.2 million of the total strategic investments balance was previously held in the form of subordinated convertible notes of one private investee company.

The subordinated notes were converted into equity of the private company at final maturity, which occurred in June 2024.

As a result of the note conversion, the Company received shares of the private investee company.

As of September 30, 2024, and December 31, 2023, each of the Company’s equity investments in private companies represented less than 15 % of the outstanding equity of the respective private company.

Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, right-of-use lease assets, and acquired intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

Fair value is determined using unobservable (Level 3) inputs, including discounted cash flow models, future estimated sublease income, and third-party independent appraisals, as considered necessary.

There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions.

If actual performance does not meet or exceed projected performance, or if the assumptions used in the model change in the future, the Company may be required to recognize additional impairment charges in future periods.

Other than the impairment of operating lease right-of-use assets recognized in the first quarter of 2025 (see Note 6, “Leases”), there were no other impairments of long-lived assets, including acquired intangible assets, during the three months ended March 31, 2025 and 2024.

Equity Method Investments

The Company held equity method investments of $ 71.0 million and $ 74.5 million at March 31, 2025 and December 31, 2024, respectively.

The Company uses the equity method to account for investments in companies if it owns more than 20% of the investee company’s outstanding equity or the investment provides the Company with the ability to exercise significant influence but not control over the operating and financial policies of the investee.

The Company assesses whether it has significant influence by considering various factors, including the nature and magnitude of the investment, voting rights held and participation in the governance of the investee, if any.

The Company may also consider additional relevant factors, such as the presence of other business relationships.

The Company’s condensed consolidated net loss included its proportionate share of the net loss of its equity method investee, which was a loss of $ 3.5 million for the three months ended March 31, 2025.

For the three months ended March 31, 2024, the Company did not hold any equity method investments and therefore did not recognize a share of net income or loss from any equity method investments.

Revenue Recognition

Revenue is generated primarily from sales of insulin pumps, single-use insulin cartridges and infusion sets to individual customers with third-party insurance coverage and through a network of distributors that resell the products to insulin-dependent diabetes customers.

The Company recognizes revenue when it transfers control of the promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, net of estimated rebates and returns.

Revenue Recognition for Arrangements with Multiple Performance Obligations

The Company considers the individual deliverables in its product offerings to be separate performance obligations.

The transaction price is determined based on the consideration expected to be received, based either on the stated value in contractual arrangements or the estimated cash to be collected in non-contracted arrangements.

The transaction price is determined based on the net consideration to which the Company expects to be entitled, based either on the stated value in contractual arrangements or the estimated cash to be collected in non-contracted arrangements.

The Company includes an estimate of variable consideration in the calculation of the transaction price at the time of sale.

Variable consideration includes, but is not limited to:

rebates, prompt payment discounts and a provision for product returns.

The Company classifies these items as a reduction of accounts receivable when it is not required to make a payment and as a liability when it is required to make a payment.

The Company allocates the consideration to the individual performance obligations and recognizes the consideration based on when the performance obligation is satisfied, considering whether or not this occurs at a point in time or over time.

3 unchanged sentences

Where there is no standalone value for the complementary product, the Company determines its value by applying the expected cost plus a margin approach and then allocates the residual to the insulin pumps.

Revenue Recognition for Tandem Choice Program

In September 2022, the Company launched a new technology access program referred to as Tandem Choice, that provides eligible, in-warranty t:slim X2 customers in the United States with the flexibility to obtain the newest hardware platform, Tandem Mobi, when commercially available.

Participating customers have the right to purchase the alternative Tandem pump for a fee, referred to as a choice right.

The program was determined to create a material right for which a portion of each t:slim X2 pump transaction price was allocated and deferred.

The Company determined that the ability for a customer to upgrade to a new technology represents a material right because the pricing inherent in such option provides the customer with a discount that is incremental to the range of discounts that would otherwise be granted for the related goods and services to comparable customers.

The standalone selling price for the choice right was estimated based on the adjusted market assessment approach and contemplated the likelihood that the respective option will be exercised.

The Company began selling Tandem Mobi insulin pumps in the first quarter of 2024 and eligibility for the Tandem Choice program ended in February 2024.

Consequently, the Company ceased to allocate and defer a portion of the transaction price for the material right for pumps sold after that date.

Eligible customers who purchased a t:slim X2 insulin pump during the program period will have until December 31, 2024 to exercise the option to switch to the Tandem Mobi for a stated fee.

The Company will recognize the deferred sales when the obligations under the Tandem Choice program are satisfied.

If a customer elects to participate in the program, the Company will recognize upgrade fees received, and the associated cost of goods sold at the time of fulfilling the obligation.

Any remaining deferrals will be recognized at program expiration on December 31, 2024, provided all obligations under the Tandem Choice program are satisfied.

For the nine months ended September 30, 2024, the net effect of Tandem Choice deferrals and fulfillments was negligible.

At September 30, 2024 and December 31, 2023, current deferred revenue balance was $ 30.1 million and $ 30.6 million, respectively, related to the Tandem Choice program.

Sales Rebates

The Company is subject to certain rebates on pricing programs with managed care organizations, such as governmental and third-party commercial payors.

The Company estimates provisions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known events or trends and channel inventory data.

Variable Consideration

The amount of variable consideration that is included in the transaction price is included in revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

The Company is subject to certain rebates on pricing programs with managed care organizations, such as pharmacy benefit managers and governmental and third-party commercial payors, and may vary by customer.

The Company estimates provisions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known market events or trends and channel inventory data.

Estimated sales rebates included in other long-term liabilities have an estimated payment due date beyond twelve months from the balance sheet date.

Accordingly, actual rebates paid may differ from estimated amounts recorded in the accompanying condensed consolidated financial statements.

As of September 30, 2024 and December 31, 2023, total estimated sales rebates were included in the following condensed consolidated balance sheet accounts (in thousands):

September 30, 2024 December 31, 2023

Other current liabilities

$ 3,012 $ 505

Other long-term liabilities

Total sales rebate

$ 9,515 $ 8,547

Accordingly, actual rebates paid may differ from estimated amounts recorded in the accompanying consolidated financial statements.

Revenue Recognition for Tandem Choice Program

From September 2022 to December 31, 2024, the Company offered a technology access program referred to as Tandem Choice that provided eligible in-warranty t:slim X2 customers in the United States with the flexibility to obtain the Tandem Mobi, once commercially available.

The Company determined that the program created a material right for which a portion of each t:slim X2 pump sales transaction price was allocated and deferred.

The Company began selling Tandem Mobi insulin pumps in February 2024 and eligibility for the Tandem Choice program ended at that time.

Consequently, the Company ceased allocating and deferring a portion of the transaction price for the material right for pumps sold after that date.

Eligible customers who purchased a t:slim X2 insulin pump during the program period had until December 31, 2024 to exercise the option to switch to the Tandem Mobi for a stated fee.

The Company recognized the deferred sales when the obligations under the Tandem Choice program were satisfied.

If a customer elected to participate in the program, the Company recognized upgrade fees received, and the associated cost of goods sold, at the time of fulfillment.

The remaining deferrals were recognized at program expiration on December 31, 2024.

For the three months ended March 31, 2024, the Company deferred $ 1.1 million of pump sales as the result of Tandem Choice.

There was no comparative adjustment to pump sales in the first quarter of 2025.

Warranty Reserve

The Company generally provides a four-year warranty on its insulin pumps to end-user customers and may replace any pumps that do not function as intended in accordance with the product specifications within the warranty period.

Additionally, the Company offers a six-month warranty on single-use insulin cartridges and infusion sets.

In addition, the Company offers a six-month warranty on single-use insulin cartridges and infusion sets.

Estimated warranty costs are recorded at the time of shipment, and the Company reevaluates the estimate of the warranty reserve obligation at each reporting period.

Warranty costs are estimated primarily based on the current expected product replacement cost and expected replacement rates using historical experience.

Insulin pumps returned to the Company may be refurbished and redeployed.

Experience has shown that initial data for any given pump version or pump platform may be insufficient.

Therefore, the Company’s process relies on long-term historical averages of existing platforms until sufficient data are available.

As actual experience becomes available, the Company uses the data to update the historical averages.

The Company may make further adjustments to the warranty reserve when deemed appropriate, giving additional consideration to revised future expectations of performance based on enhanced hardware components, or new features and capabilities that may become available through Tandem Device Updater.

Warranty expense is recorded as a component of cost of sales in the condensed consolidated statements of operations.

The following table provides a reconciliation of the changes in product warranty liabilities for the three and nine months ended September 30, 2024 and 2023 (in thousands):

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

2024 2023 2024 2023

Warranty costs are primarily estimated based on the current expected product replacement cost and expected replacement rates using historical experience.

Returned insulin pumps may be refurbished and redeployed.

Experience has shown that initial data for any new pump version or pump platform may be insufficient.

Therefore, the Company relies on long-term historical replacement data from existing platforms until sufficient data is available.

As actual experience accumulates, the Company adjusts its warranty reserve estimate accordingly.

In addition, the availability of replacement data may differ by country due to local compliance and privacy regulations, which may require the Company to estimate its warranty liability using available information or data from similar markets.

The Company may make further adjustments to the warranty reserve when appropriate, considering revised expectations of product performance based on enhanced hardware, or new features and capabilities that may become available through Tandem Device Updater.

Warranty expense is recorded as a component of cost of sales in the consolidated statements of operations.

The following table provides a reconciliation of the changes in product warranty liabilities for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Balance at beginning of the period $ 51,408 $ 37,173

2 unchanged sentences

Increases (decreases) in warranty estimates

1,882 ( 1,775 ) 174 ( 1,615 )

Balance at end of the period $ 52,210 $ 37,638

As of September 30, 2024 and December 31, 2023, total product warranty reserves were included in the following condensed consolidated balance sheet accounts (in thousands):

September 30, 2024 December 31, 2023

As of March 31, 2025 and December 31, 2024, total product warranty reserves were included in the following consolidated balance sheet accounts (in thousands):

March 31, 2025 December 31, 2024

Other current liabilities $ 31,224 $ 31,048

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Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis.

The Company estimates the fair value of stock options issued under the Company’s stock incentive plans, and the fair value of the employees’ purchase rights under the Company’s Employee Stock Purchase Plan (ESPP) using the Black-Scholes option pricing model on the date of grant.

The Company estimates the fair value of stock options issued under the Company’s stock incentive plans, and the fair value of employee purchase rights under the Company’s Employee Stock Purchase Plan (ESPP) using the Black-Scholes option pricing model on the date of grant.

The Black-Scholes option pricing model requires the use of assumptions about a number of variables, including stock price volatility, expected term, dividend yield and risk-free interest rate (see Note 8, “Stockholders’ Equity”).

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Any expense change resulting from an adjustment in the estimated shares to be released is recorded in the period of adjustment.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing the net income or loss by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted net income (loss) per share reflects the potential dilution that would occur if securities exercisable for or convertible into common stock were exercised for or converted into common stock.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted net loss per share reflects the potential dilution that would occur if securities exercisable for or convertible into common stock were exercised for or converted into common stock.

Dilutive common share equivalents are comprised of stock options and unvested RSUs outstanding under the Company’s stock incentive plans, potential awards to be granted pursuant to the ESPP, and common stock warrants, each calculated using the treasury stock method, and shares issuable upon conversion of the convertible senior notes calculated using the if-converted method.

For the three and nine months ended September 30, 2024 and 2023, there was no difference in the weighted average number of shares used to calculate basic and diluted net loss per share due to the Company’s net loss position for each of the periods presented.

For the three months ended March 31, 2025 and 2024, there was no difference in the weighted average number of shares used to calculate basic and diluted net loss per share due to the Company’s net loss position in each period.

Potentially dilutive securities outstanding and not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in thousands, in common stock equivalent shares):

Three Months Ended

September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Options to purchase common stock 115 133

3 unchanged sentences

Convertible senior notes (if-converted) 9,513 4,241

14,744 5,986 11,223 4,974

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07 to improve the information that a public entity discloses about reportable segments and to address investor requests for more information about reportable segment expenses.

The pronouncement requires a public entity to report a measure of segment profit or loss that the chief operating decision maker (CODM) uses to assess segment performance and make decisions about allocating resources.

ASU 2023-07 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, adopted retrospectively.

The Company is currently evaluating the effect of adoption of ASU 2023-07 on the Company’s consolidated financial statements or disclosures.

Recently Issued Accounting Pronouncements

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

Improvements to Income Tax Disclosures, which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating ASU 2023-09 to determine the impact it may have on its consolidated financial statements.

Accounting Pronouncements Issued and Not Yet Adopted

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

Disaggregation of Income Statement Expenses (ASU 2024-03), which requires entities to disclose information about purchases of inventory, employee compensation, and intangible asset amortization in each income statement line item that contains those expenses.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Short-Term Investments

The Company invests in marketable securities primarily consisting of debt instruments of the United States Government, United States Government-sponsored enterprises, and financial institutions and corporations with strong credit ratings.

The following represents a summary of the estimated fair value of short-term investments at September 30, 2024 and December 31, 2023 (in thousands):

At September 30, 2024 Amortized

The following represents a summary of the estimated fair value of short-term investments at March 31, 2025 and December 31, 2024 (in thousands):

At March 31, 2025 Amortized

Cost Gross Unrealized

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Corporate debt securities 105,635 248 ( 47 ) 105,836

Foreign government bonds

$ 3,013 $ — $ — 3,013

Total $ 368,657 $ 759 $ ( 321 ) $ 369,095

The contractual maturities of available-for-sale debt securities as of September 30, 2024, were as follows (in thousands):

The contractual maturities of available-for-sale debt securities as of March 31, 2025, were as follows (in thousands):

Years to Maturity

At September 30, 2024 Within One Year One to Two Years Two to Three Years

At March 31, 2025 Within One Year One to Two Years Two to Three Years

Estimated Fair Value

8 unchanged sentences

The Company reviews the portfolio of available-for-sale debt securities quarterly to determine if any investment is impaired due to changes in credit risk or other potential valuation concerns.

Unrealized losses on available-for-sale debt securities at September 30, 2024 were primarily due to an increase in market interest rates after certain debt securities were purchased, and the balance was not material to the Company’s quarterly results.

Unrealized losses on available-for-sale debt securities at March 31, 2025 were primarily due to an increase in market interest rates after certain debt securities were purchased, and the balance was not material to the Company’s quarterly results.

Composition of Certain Financial Statement Items

Accounts Receivable

Accounts receivable, net consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):

September 30, December 31,

Accounts receivable, net consisted of the following at March 31, 2025 and December 31, 2024 (in thousands):

March 31, December 31,

Accounts receivable $ 133,686 $ 121,836

2 unchanged sentences

Allowance for Credit Losses

The following table provides a reconciliation of the changes in the allowance for estimated accounts receivable credit losses for the three and nine months ended September 30, 2024 and 2023 (in thousands):

The following table provides a reconciliation of the changes in the allowance for estimated accounts receivable credit losses for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended

September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Balance at beginning of the period $ 7,251 $ 4,898

2 unchanged sentences

Balance at end of the period $ 7,125 $ 4,923

Inventories consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):

September 30, December 31,

Inventories consisted of the following at March 31, 2025 and December 31, 2024 (in thousands):

March 31, December 31,

Raw materials $ 31,001 $ 32,602

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Fair Value Measurements

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in thousands):

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in thousands):

Fair Value Measurements at

September 30, 2024

March 31, 2025

Total Level 1 Level 2 Level 3

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Corporate debt securities 105,836 — 105,836 —

Foreign government bonds

3,013 — 3,013 —

Total assets $ 425,329 $ 159,936 $ 265,393 $ —

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The Company validates these prices through independent valuation testing and review of portfolio valuations provided by the Company’s investment managers.

There were no transfers into or out of Level 3 assets during the three months ended September 30, 2024 and 2023, respectively.

There were no transfers into or out of Level 3 assets during the three months ended March 31, 2025 and 2024, respectively.

Fair Value of Financial Instruments

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Short-term investments are carried at fair value.

The Company’s convertible senior notes are carried at amortized cost on the condensed consolidated balance sheets (see Note 7, “Debt”).

In March 2024, the Company issued $ 316.3 million aggregate principal amount of the Company’s Convertible Senior Notes Due 2029, and repurchased $ 246.7 million of principal of the Company’s Convertible Senior Notes due 2025 (see Note 7, “Debt”).

The Company’s Convertible Senior Notes are carried at amortized cost on the consolidated balance sheets (see Note 7, “Debt”).

The Company estimated the fair value of its convertible senior notes based on Level 2 quoted market prices as follows (in thousands):

Fair Value Measurements at

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Convertible Senior Notes due 2025

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Convertible Senior Notes due 2029

301,911 407,752

Total fair value of outstanding convertible senior notes

$ 341,041 $ 446,882

* Not applicable as no notes were outstanding at this date.

The Company’s leases consist of operating leases for general office space, research and development, manufacturing and warehouse facilities, and equipment.

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The Company includes the renewal option period in the lease term for those leases reasonably expected to be extended at the time of lease commencement.

Operating Lease Impairment Charge

In 2023, the Company consolidated facilities by moving the administrative functions and other operations from the leased space on Vista Sorrento Parkway in San Diego, California (Vista Sorrento Lease) to the Company’s new headquarters, located on High Bluff Drive in San Diego, California.

In connection with permanently ceasing use of the Vista Sorrento Lease, the Company recorded a $ 14.1 million impairment charge as the carrying amount of the assets related to the Vista Sorrento Lease exceeded its fair value based on the Company’s estimate of future discounted cash flows related to the leased facility.

The $ 14.1 million charge was comprised of an $ 11.2 million impairment of operating lease right-of-use assets and a $ 2.9 million write-off of fixed assets, and was recorded as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

Headquarters Lease

In September 2021, the Company entered into a lease agreement for 181,949 square feet of general administrative, laboratory, and research and development office space (the Premises) located on High Bluff Drive in San Diego, California (Headquarters Lease).

Possession of the Premises was to be tendered to the Company in two phases, with Phase I consisting of 143,850 rentable square feet, which commenced in 2022, and Phase II consisting of 38,099 rentable square feet, which commenced in the first quarter of 2025.

The Headquarters Lease term expires in April 2035.

The Company has two options to extend the term of the lease, with each option providing for an additional period of five years .

The Headquarters Lease term was determined assuming the renewal options would not be exercised.

In December 2023, the Company entered into an agreement to sublease the Phase II portion of the leased premises under the Headquarters Lease, from January 2025 through March 2029, for which accounting commenced in January 2025.

Future minimum payments for base rent due under Phase II of the Headquarters Lease, net of sublease rent, are estimated to be $ 3.0 million in total for 2025 through 2028, and $ 22.2 million in total for 2029 through 2035.

The Company recognizes the sublease income on a straight-line basis over the term of the sublease which is classified in the Company’s condensed consolidated statements of operations and comprehensive loss as a reduction of rent expense in selling, general and administrative expense (SG&A).

The difference between sublease income recognized and cash received from the subtenant accrues as a deferred rent receivable.

Operating Lease Impairment Charges

As part of our evaluation of the sublease agreement related to the Headquarters Lease, the Company compared the estimated undiscounted sublease income to the net book value of the underlying right of use asset.

Because the expected sublease income was less than the net book value of the sublease assets, the Company recorded a $ 3.6 million impairment charge in operating expenses in the first quarter of 2025 by reducing the net book value of the subleased assets to their estimated fair value, which is determined by discounting the estimated sublease income using the estimated incremental borrowing rate of the subtenant.

Additionally, during the first quarter of 2025, the Company relocated certain development activities from Lausanne, Switzerland to the United States.

The Company reviewed the relocation activities and impact of losses on certain fixed assets associated with the lease.

The Company also reviewed its assumptions for estimated future sublease income for its Vista Sorrento lease.

As a result, the Company recorded a $ 3.1 million impairment charge in operating expenses, comprised of operating lease impairment charges and write off of fixed assets consisting primarily of leasehold improvements .

Supplemental Lease Disclosure Information

The Company’s lease costs recorded in the condensed consolidated statements of operations were as follows (in thousands):

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

The Company’s lease costs recorded in the consolidated statements of operations were as follows (in thousands):

Three Months Ended March 31,

Operating lease cost (excluding sublease income)

$ 4,220 $ 4,051

Operating lease cost $ 3,603 $ 3,528 $ 10,684 $ 12,457

Short-term lease cost 7 21

Loss on lease termination and right-of-use asset impairment charges

Sublease income, gross

$ ( 566 ) $ —

Total lease cost $ 10,358 $ 4,072

Maturities of operating lease liabilities at September 30, 2024 were as follows (in thousands):

Maturities of operating lease liabilities at March 31, 2025 were as follows (in thousands):

Years Ending December 31,

2025 $ 15,838

Thereafter 97,125

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The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Weighted-average remaining lease term (in years) 9.3 9.2

Weighted-average discount rate used to determine operating lease liabilities 5.7 % 5.3 %

Cash amounts paid included in the measurement of lease liabilities, representing operating cash flows, were $ 13.3 million and $ 9.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Convertible Senior Notes Due 2029

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The Company also paid $ 1.3 million of accrued interest due at time of the note repurchase.

As a result of the repurchase, the Company recognized a $ 1.3 million loss on extinguishment of debt in the condensed consolidated statement of operations for the nine months ended September 30, 2024.

As a result of the repurchase, the Company recognized a $ 1.3 million loss on extinguishment of debt in the condensed consolidated statement of operations for the three months ended March 31, 2024.

The loss on extinguishment of debt included the unamortized debt issuance costs related to the portion of the 2025 Notes repurchased.

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The proceeds from the issuance of the Notes were $ 244.6 million, net of debt issuance costs and cash used to pay the cost of the capped call transactions (Capped Call Transactions) discussed below.

In March 2024, the Company repurchased for cash $ 246.7 million in aggregate principal amount of the 2025 Notes, concurrently with the pricing of the 2029 Notes in privately negotiated transactions.

In March 2024, the Company repurchased for cash $ 246.7 million aggregate principal amount of the 2025 Notes, concurrently with the pricing of the 2029 Notes in privately negotiated transactions.

The 2025 Notes are the Company’s senior unsecured obligations.

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The 2025 Notes mature on May 1, 2025, unless repurchased, redeemed, or converted in accordance with their terms before the maturity date.

As of September 30, 2024 the outstanding balance of the 2025 Notes was classified in current liabilities on the Company’s condensed consolidated balance sheets.

As of March 31, 2025, the outstanding balance of the 2025 Notes was classified in current liabilities on the Company’s condensed consolidated balance sheet.

The 2025 Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 8.8836 shares of common stock per $1,000 principal amount of the 2025 Notes, which is equivalent to an initial conversion price of $ 112.57 (2025 Notes Conversion Price) per share of the Company’s common stock.

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No sinking fund is provided for the 2025 Notes.

Holders of the 2025 Notes had the right to convert all or a portion of their 2025 Notes at their option before November 1, 2024, in multiples of $1,000 principal amounts, under certain circumstances outlined in the offering agreement.

On or after November 1, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the 2025 Notes.

Holders of the 2025 Notes who convert in connection with a make-whole fundamental change or in connection with a redemption are entitled to an increase in the conversion rate.

Additionally, in the event of a fundamental change, holders of the 2025 Notes may require us to repurchase all or a portion of the 2025 Notes at a price equal to 100 % of the principal amount of the Notes, plus any accrued and unpaid interest.

The net carrying amount of the Company’s convertible senior notes on the condensed consolidated balance sheets consisted of the following (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Principal amount:

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Convertible Senior Notes Due 2029

316,250 316,250

Total principal amount

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current portion

( 40,736 ) ( 40,670 )

Long-term senior convertible notes

$ 308,705 $ 308,266

* Not applicable as no notes were outstanding at this date.

As of September 30, 2024 and December 31, 2023, the if-converted value of the 2025 Notes did not exceed the principal amount.

As of September 30, 2024, the if-converted value of the 2029 Notes exceeded the principal amount by $ 71.8 million.

In October 2023, the Company was notified that additional interest beyond the 1.50 % per annum had been accruing on the 2025 Notes since May 2021, under the terms of the indenture.

This additional interest accrued at a rate of 0.50 % per annum on the outstanding principal amount of the Notes, and as of September 30, 2023 amounted to about $ 3.1 million in the aggregate.

The additional accrued interest was fully paid in November 2023.

As of March 31, 2025 and December 31, 2024, the if-converted value of the 2025 Notes did not exceed the principal amount.

As of March 31, 2025, the if-converted value of the 2029 Notes did not exceed the principal amount.

As of December 31, 2024, the if-converted value of the 2029 Notes exceeded the principal amount by $ 13.4 million.

The following table summarizes the effective interest rates for each of our convertible senior notes for the periods shown:

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

2024 2023 2024 2023

Three Months Ended March 31,

Effective interest rate:

Convertible Senior Notes Due 2025

2.1 % 2.2 % 2.1 % 2.2 %

Convertible Senior Notes Due 2029

2.1 % * 2.1 % *

* Not applicable as no notes were outstanding at this date.

The following table details interest expense related to the Notes recognized for the three and nine months ended September 30, 2024, and 2023 (in thousands):

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

2024 2023 2024 2023

The following table details interest expense related to the Notes recognized for the three months ended March 31, 2025, and 2024 (in thousands):

Three Months Ended March 31,

Contractual interest expense

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Total interest expense $ 1,844 $ 1,612

(1) Contractual interest expense for the three and nine months ended September 30, 2023 includes $ 3.1 million of additional interest as discussed above.

2029 Capped Call Transactions

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In connection with the repurchase of certain 2025 Notes, the Company entered into unwind agreements with the existing option counterparties on March 5, 2024 to terminate a portion of the existing 2025 Capped Call Transactions in a notional amount corresponding to the amount of 2025 Notes repurchased (the Unwind Transactions).

In connection with the Unwind Transactions, the Company received $ 0.2 million in cash as a termination payment in respect of the portion of the existing 2025 Capped Call Transactions that were unwound.

In connection with the Unwind Transactions, the Company received $ 0.2 million in cash as a termination payment with respect to the portion of the existing 2025 Capped Call Transactions that were unwound.

The amount received was based generally on the termination values of the unwound portions of the existing 2025 Capped Call Transactions.

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The cost of the transactions was recorded as a reduction of the Company’s additional paid-in capital in the Company’s condensed consolidated balance sheet and will not be remeasured.

Promissory Note Payable

In connection with the acquisition of Capillary Biomedical, Inc.

in 2022, the Company assumed a $ 4.7 million promissory note payable.

The promissory note accrues interest at the rate of 5.0 % per year, and becomes due and payable upon the first sale or license of the commercialized product.

At March 31, 2025 and December 31, 2024, the loan balance, including accrued interest, was $ 4.9 million and $ 4.8 million, respectively, and was included as a component of other long-term liabilities on the condensed consolidated balance sheets.

Stockholders’ Equity

Shares Reserved for Future Issuance

The following shares of the Company's common stock were reserved for future issuance at September 30, 2024 (in thousands):

The following shares of the Company's common stock were reserved for future issuance at March 31, 2025 (in thousands):

Shares reserved for issuance upon conversion of Convertible Senior Notes 9,513

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Common Stock Warrants

Warrants outstanding to purchase shares of the Company's common stock as of September 30, 2024 were as follows:

Warrants outstanding to purchase shares of the Company's common stock as of March 31, 2025 were as follows:

Issue Date Exercise Price Per Share Warrants Outstanding Expiration Date of Warrants Outstanding

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Each warrant allows the holder to purchase one share of common stock at the per share exercise price of the warrant.

Stock Incentive Plans

In May 2023, the Company’s stockholders approved the 2023 Long-Term Incentive Plan (2023 Plan), under which 2,602,184 shares of common stock were initially reserved for issuance.

Under the 2023 Plan, the Company may grant stock options, stock appreciation rights, restricted stock and restricted stock units to individuals who are then employees, officers, directors or consultants of the Company.

The 2023 Plan replaced the Company’s Amended and Restated 2013 Stock Incentive Plan (2013 Plan), and no further equity awards will be granted under the 2013 Plan.

In May 2024, the Company’s stockholders approved the 2023 Long-Term Incentive Plan, as amended, to increase the number of shares authorized for issuance under the plan by 3,000,000 shares.

Stock-Based Compensation

The following table summarizes the allocation of stock-based compensation expense included in the condensed consolidated statements of operations for all stock-based compensation arrangements (in thousands):

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

2024 2023 2024 2023

Three Months Ended March 31,

Cost of sales $ 1,725 $ 2,070

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Total stock-based compensation expense $ 25,489 $ 22,039

The total stock-based compensation expense capitalized as part of the cost of the Company’s inventories was $ 1.8 million at September 30, 2024, and $ 2.0 million at December 31, 2023.

The total stock-based compensation expense capitalized as part of the cost of the Company’s inventories was $ 1.7 million at March 31, 2025, and $ 1.8 million at December 31, 2024.

Restricted Stock Units

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The total number of RSUs granted and the respective weighted average grant date fair value were as follows:

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

2024 2023 2024 2023

Three Months Ended March 31,

RSUs granted 90,543 358,059

Weighted average grant date fair value (per share) $ 27.33 $ 25.36

Employee Stock Purchase Plan

In May 2024, the Company's stockholders approved the 2013 Employee Stock Purchase Plan, as amended, to increase the number of shares authorized for issuance under the plan by 3,000,000 shares.

The Company records stock-based compensation expense associated with the ESPP using the Black-Scholes option pricing model.

Valuations are performed on the grant date at the beginning of the purchase period, which generally occurs in May and November of each year.

The assumptions used in the Black-Scholes option pricing model for the ESPP were as follows:

Nine Months Ended September 30,

Weighted average grant date fair value (per share) $ 21.45 $ 12.52

Risk-free interest rate 5.1 % 4.7 %

Dividend yield 0.0 % 0.0 %

Expected volatility 70.2 % 60.9 %

Expected term (in years) 1.3 1.3

Employee Benefits

Employee 401(k) Plan

The Company has a defined contribution 401(k) plan for employees in the United States who are at least 18 years of age.

Employees are eligible to participate in the plan beginning on the first day of the calendar month following their date of hire.

Unless they affirmatively elect otherwise, employees are automatically enrolled in the plan following 30 days from date of hire or entry date.

Under the terms of the plan, employees may make voluntary contributions as a percent of compensation and the Company may elect to match a discretionary percentage of employee contributions .

For the three and nine months ended September 30, 2024, the Company recognized income tax expense of $ 0.6 million and $ 4.9 million, respectively, on a pre-tax loss of $ 22.6 million and $ 91.9 million, respectively.

The Company calculated the provision for income taxes for the three and nine months ended September 30, 2024 by applying an estimate of the annual effective tax rate for the full year to ordinary income (loss) adjusted by the tax impact of discrete items.

Income tax expense for the three and nine months ended September 30, 2024 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

For the three and nine months ended September 30, 2023, the Company recognized income tax expense of $ 2.2 million and $ 3.7 million, respectively, on a pre-tax loss of $ 30.7 million and $ 188.9 million, respectively.

Income tax expense for the three and nine months ended September 30, 2023 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

The Company calculated the provision for three and nine months ended September 30, 2023 by applying an estimate of the annual effective tax rate for the full year to ordinary income (loss) adjusted by the tax impact of discrete items.

The Company continues to maintain a full valuation allowance against its net deferred tax assets as of September 30, 2024, based on the current assessment that it is not more likely than not these future benefits will be realized before expiration.

Defined Contribution Plans

The Company has defined contribution plans for certain of its employees.

The Company’s largest defined contribution plan is the 401(k) plan for employees in the United States who are at least 18 years of age.

Eligible employees may participate in the plan beginning on the first day of the calendar month following their date of hire.

Unless they affirmatively elect otherwise, eligible employees are automatically enrolled in the plan following 30 days from their date of hire.

Under the terms of the plan, eligible employees may make voluntary contributions as a percent of compensation and the Company may elect to match a discretionary percentage of employee contributions.

For the three months ended March 31, 2025, the Company recognized income tax expense of $ 8.5 million on a pre-tax loss of $ 122.1 million.

The Company calculated the provision for income taxes for the three months ended March 31, 2025 by applying an estimate of the annual effective tax rate for the full year to ordinary loss adjusted by the tax impact of discrete items.

Income tax expense for the three months ended March 31, 2025 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

For the three months ended March 31, 2024, the Company recognized income tax expense of $ 3.2 million on a pre-tax loss of $ 39.5 million.

Income tax expense for the three months ended March 31, 2024 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

The Company calculated the provision for three months ended March 31, 2024 by applying an estimate of the annual effective tax rate for the full year to ordinary income (loss) adjusted by the tax impact of discrete items.

The Company continues to maintain a full valuation allowance against its net deferred tax assets as of March 31, 2025, based on the current assessment that it is not more likely than not these future benefits will be realized before expiration.

Business Segment and Geographic Information

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The Company is organized based on its current product portfolio, which consists primarily of insulin pumps, single-use insulin cartridges and infusion sets for the storage and delivery of insulin.

The Company views its operations and manages its business as one segment and a single reporting unit because key operating decisions and resource allocations are made by the CODM using consolidated financial data.

The Company views its operations and manages its business as one reporting segment because key operating decisions and resource allocations are made by the CODM using consolidated financial data.

Accordingly, the Company is organized as a single operating segment and therefore a single reportable segment:

Insulin Pumps and Supplies.

The Company’s CODM is the Chief Executive Officer (CEO), who evaluates segment performance based on segment net income (loss) on a consolidated basis.

Segment net income (loss) was consistent with the net loss amounts reported in the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025 and 2024.

There were no significant segment expenses that are regularly provided to the CODM other than those reported in the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025 and 2024.

The Company’s CODM is provided segment assets information on a consolidated basis for the evaluation of Company performance.

Total segment assets were consistent with total assets reported in the Company’s condensed consolidated balance sheets for March 31, 2025 and December 31, 2024.

Disaggregation of Revenue

Segment revenues were consistent with revenue reported in the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025 and 2024.

The Company primarily sells its products through national and regional distributors in the United States on a non-exclusive basis, and through distribution partners outside the United States.

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Revenues by Geographic Region and Customer Sales Channel

During the three and nine months ended September 30, 2024 and 2023, no individual country outside the United States generated revenue that represented more than 10% of total revenue.

During the three months ended March 31, 2025 and 2024, no individual country outside the United States generated revenue that represented more than 10% of total revenue.

The table below sets forth revenues for the Company’s two primary geographical markets, based on the geographic location to which its products are shipped (in thousands):

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

2024 2023 2024 2023

Three Months Ended March 31,

United States $ 150,632 $ 129,761

1 unchanged sentence

Total Sales $ 234,422 $ 191,674

Sales to distributors accounted for 61 % and 62 % of the Company’s United States sales for the three and nine months ended September 30, 2024, respectively, and 64 % and 64 % of the Company’s United States sales for the three and nine months ended September 30, 2023, respectively.

Sales to distributors accounted for the vast majority of the Company’s sales outside the United States for the three and nine-month periods ended September 30, 2024 and 2023.

Revenues by Product

During the three and nine months ended September 30, 2024 and 2023, sales by product were as follows (in thousands):

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

2024 2023 2024 2023

During the three months ended March 31, 2025 and 2024, sales by product were as follows (in thousands):

Three Months Ended March 31,

$ 102,091 $ 87,287

1 unchanged sentence

132,331 105,533

Net revenue recognized (deferred) for Tandem Choice program

1,039 ( 8,236 ) 47 ( 12,568 )

Net revenue deferred for Tandem Choice program

Total Sales $ 234,422 $ 191,674

AMF Medical Acquisition

On December 10, 2022, the Company entered into a Share Purchase Agreement (Purchase Agreement) with AMF Medical SA, a corporation organized and existing under the laws of Switzerland (AMF Medical), and its shareholders to acquire all of the registered shares of AMF Medical (Transaction).

AMF Medical is the developer of the Sigi Patch Pump, which is designed to be an ergonomic, rechargeable patch pump that reduces the burden of managing diabetes through its use of pre-filled insulin cartridges.

The Sigi Patch Pump is under development and not commercially available.

On January 19, 2023, the Company completed the acquisition of AMF Medical under the terms of the Purchase Agreement.

The total aggregate consideration for the Transaction included a previous strategic investment of Swiss Francs (CHF) 8.0 million made in the third quarter of 2022, a cash payment of CHF 62.4 million paid at the closing of the Transaction, and additional contingent earnout payments of up to CHF 129.6 million.

The contingent earnout payments become payable upon the achievement of certain milestones, and are comprised of a payment of up to CHF 38.4 million upon the successful completion of key development milestones over the two years following the closing date of the Transaction, and a payment of up to CHF 91.2 million upon obtaining regulatory clearance from the FDA of an automated controller enabled (ACE) pump.

The contingent consideration will be recognized as each contingency is resolved and the respective consideration is paid or becomes payable.

As of September 30, 2024, the contingencies related to the earnout milestones were not yet resolved and, therefore, the related amounts were not included in the fair value of the asset acquired and were not recognized as a liability on the consolidated balance sheet at September 30, 2024.

The Company funded the initial closing payment using existing cash balances.

Sales to distributors accounted for 60 % and 61 % of the Company’s United States sales for the three months ended March 31, 2025 and March 31, 2024, respectively.

Sales to distributors accounted for the vast majority of the Company’s sales outside the United States for the three-month periods ended March 31, 2025 and 2024.

In December 2022, the Company entered into a share purchase agreement to acquire all of the registered shares of AMF Medical (Original Transaction).

AMF Medical is the original developer of the Sigi Patch Pump, which continued to be under development and was not yet commercially available as of March 31, 2024.

In the first quarter of 2023, the Company completed the acquisition of AMF Medical.

The total aggregate consideration for the Original Transaction included a previous strategic investment of Swiss Francs (CHF) 8.0 million made in the third quarter of 2022, a cash payment of CHF 62.4 million paid at the closing of the Transaction, and additional contingent earnout payments of up to CHF 129.6 million.

The contingent consideration was to be recognized as certain defined contingencies were resolved and the respective consideration was paid or became payable.

The transaction was accounted for as an asset acquisition as substantially all the value of the gross assets was concentrated in a single asset.

The Company recorded a $ 78.8 million charge in 2023 representing the value of acquired in-process research and development assets with no alternative future use, and acquisition related expenses, on its condensed consolidated statements of operations in acquired in-process research and development expenses.

The Company’s results of operations included the operating results of AMF Medical since the date of acquisition.

The Company recorded a $ 78.8 million charge in 2023 representing the value of acquired in-process research and development assets with no alternative future use, including acquisition-related expenses, on its condensed consolidated statements of operations in acquired in-process research and development expenses (IPR&D).

In January 2025, the Company entered into a revised agreement that removed contingent liabilities previously included in the Original Transaction.

Under the revised term, the Company agreed to pay CHF 68 million, consisting of a CHF 40 million payment made in January 2025 and a final payment of CHF 28 million due in October 2025.

All other payment obligations in the Original Transaction were removed.

The total amount of CHF 68 million was recognized as acquired IPR&D in the Company’s condensed consolidated statement of operations and comprehensive loss.

As of March 31, 2025, the remaining CHF 28 million was recorded as a short-term accrued liability for $ 31.1 million on the Company’s condensed consolidated balance sheet.

Commitments and Contingencies

Legal and Regulatory Matters

On September 8, 2023, a purported stockholder of the Company filed a putative securities class action complaint (captioned Lowe v.

Tandem Diabetes Care, Inc., et al., Case No.

23-cv-1657 (“ Lowe ”)) in the United States District Court for the Southern District of California against the Company and certain of the Company’s current executive officers (“defendants”).

On December 6, 2023, the court appointed Mason Raines, Thomas O.

Martel, and Linna Rae Martel to serve as co-lead plaintiffs (“plaintiffs”).

On February 1, 2024, the plaintiffs filed their amended complaint.

In the amended complaint, the plaintiffs alleged violations of the Securities Exchange Act of 1934, as amended, based on alleged materially false and misleading statements relating to our sales trends and financial forecasts.

The plaintiffs sought to represent a class of persons who purchased or otherwise acquired Tandem common stock during the period between August 3, 2022, and November 2, 2022, inclusive.

The plaintiffs also sought unspecified monetary damages, pre- and post-judgment interest, costs and fees, including attorneys’ fees and expert fees, and other relief.

The defendants filed their motion to dismiss the amended complaint on March 11, 2024.

The plaintiffs filed a response in opposition to defendants’ motion to dismiss on March 27, 2024, and on April 10, 2024, defendants filed their reply.

On April 29, 2024, the court granted defendants’ motion to dismiss with leave to file a second amended complaint within 30 days.

The plaintiffs did not file a second amended complaint within 30 days.

On June 4, 2024, the Court entered final judgment dismissing the action in its entirety with prejudice.

On July 5, 2024, the plaintiffs’ deadline to appeal the final judgment expired.

Two shareholder derivative cases were filed in the United States District Court for the Southern District of California on March 29, 2024 (captioned Bushansky v.

Sheridan et al.

24-cv-608) and on April 23, 2024 (captioned Amersi v.

Sheridan et al.

24-cv-726) against the individual members of Tandem’s Board of Directors and the Company.

These shareholder derivative lawsuits piggybacked on the Lowe case, and alleged that Tandem’s Board breached its fiduciary duties by failing to properly oversee and monitor the risks affecting the Company’s business, which resulted in reduced guidance, an associated stock drop, and the Lowe case.

On May 16, 2024, the parties in the derivative actions filed a joint motion regarding consolidation and appointment of counsel.

On June 13, 2024, the joint motion was granted and the derivative actions were consolidated.

On July 12, 2024, the parties filed a joint request for voluntary dismissal of the consolidated derivative actions without prejudice.

On the same day, July 12, 2024, the court granted the parties’ joint request and dismissed the consolidated derivative actions without prejudice.

In November 2023, at the Unified Patent Court (UPC), Paris Central Division (UPC Paris), we filed a revocation action and an action for a declaration of non-infringement of EP Patent No.

2 196 231 B1 (the ’231 patent) against Roche Diabetes Care GmbH.

While Roche contends that Tandem’s t:slim X2 pump infringes the ‘231 patent, we contend that our t:slim X2 pump does not infringe the ‘231 patent.

Furthermore, we contend that the claims of the ‘231 patent are invalid over the prior art and should be revoked.

In February 2024, Roche filed an infringement action against Tandem and its distributor in Germany at the UPC, Hamburg Local Division (UPC Hamburg) contending that Tandem’s t:slim X2 pump, and the offering, marketing, using, importing, possessing, and supplying of such devices infringes certain claims of the ‘231 patent.

Roche seeks, among other things, damages and other monetary relief, costs and expenses of the legal proceedings, and an order to cease and desist the allegedly infringing activities.

At the UPC Hamburg, Tandem has asserted that the t:slim X2 pump does not infringe the claims of the ‘231 patent and Tandem’s distributor has asserted that the t:slim X2 pump does not infringe the claims of the ‘231 patent and that the claims of the ‘231 patent are invalid and should be revoked.

On November 6, 2024, the UPC Paris held a hearing on Tandem’s action to revoke the claims of the ‘231 patent.

On December 18, 2024, the UPC Paris upheld the patent.

The hearing in Hamburg on invalidity and non-infringement is scheduled for June 12, 2025.

In December 2023, F.

Hoffman-La Roche AG and Roche Diabetes Care GmbH (collectively, Roche), filed an infringement action at the UPC, Dusseldorf Division (UPC Dusseldorf) against Tandem Diabetes Care, Inc.

and Tandem Diabetes Care Europe B.V.

and Tandem’s distributors in Germany, France, the Netherlands and Denmark.

Roche alleges our t:slim X2 insulin pump, and the offering, marketing, using, importing, possessing, and supplying of such devices infringe EP Patent No.

1 970 677 B1 (the ‘677 patent).

While Roche contends that Tandem’s t:slim X2 pump infringes the ‘677 patent, we contend that our t:slim X2 pump does not infringe the ‘677 patent.

Furthermore, we contend that the claims of the ‘677 patent are invalid over the prior art and should be revoked.

Roche seeks, among other things, damages and other monetary relief, costs and expenses of the legal proceedings, and an order to cease and desist the allegedly infringing activities.

On April 9, 2025, the UPC Dusseldorf held a hearing on Roche’s action asserting infringement of the ‘677 patent, Tandem and its distributors’ counterclaims that the t:slim X2 pump does not infringe the ‘677 patent, and Tandem and its distributors’ actions to revoke the claims of the ‘677 patent.

The action seeks unspecified monetary damages and other relief.

The UPC Dusseldorf is expected to issue a ruling on May 22, 2025.

Although the Company intends to vigorously defend against these claims, there is no guarantee that the Company will prevail.

Accordingly, the Company is unable to determine the ultimate outcome of this lawsuit or determine the amount or range of potential losses associated with the lawsuit.

From time to time, the Company is involved in various other legal proceedings, regulatory matters, and other disputes or claims arising from or related to claims incident to the normal course of the Company’s business activities, including actions with respect to intellectual property, data privacy, employment, regulatory, product liability and contractual matters.

Although the results of such legal proceedings and claims cannot be predicted with certainty, as of September 30, 2024 the Company believes it is not currently a party to any legal proceedings, regulatory matters, or other disputes or claims for which a material loss was considered probable or for which the amount (or range) of loss was reasonably estimable.

Although the results of such legal proceedings and claims cannot be predicted with certainty, as of March 31, 2025 the Company believes it is not currently a party to any other legal proceedings, regulatory matters, or other disputes or claims for which a material loss was considered probable or for which the amount or range of loss was reasonably estimable.

However, regardless of the merit of the claims raised or the outcome, legal proceedings may have an adverse impact on the Company as a result of defense and settlement costs, diversion of management time and resources, and other factors.

Letters of Credit

As of September 30, 2024, in connection with one of the Company’s operating leases (see Note 6, “Leases”), the Company had a $ 4.9 million unsecured irrevocable standby letter of credit arrangement with a bank, under which the landlord of the building is the beneficiary.

As of March 31, 2025, in connection with one of the Company’s operating leases (see Note 6, “Leases”), the Company had a $ 4.9 million unsecured irrevocable standby letter of credit arrangement with a bank, under which the landlord of the building is the beneficiary.

The Company is required to maintain the standby letter of credit throughout the term of the lease, which expires in April 2035.

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

What changed 10-Q

Item 1. Financial Statements