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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-04-30 · 121 added, 70 removed, 186 unchanged (51% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis together with our financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (Quarterly Report).

This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to considerable risks and uncertainties.

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Forward-looking statements also include the assumptions underlying or relating to such statements.

In particular, forward-looking statements contained in this Quarterly Report may relate to, among other things, our future or assumed financial condition, results of operations, liquidity, trends impacting our financial results, business forecasts and plans, research and product development plans, product pipelines, development timelines, manufacturing plans, strategic plans and objectives, capital needs and financing plans, product launches, geographic expansion, distribution plans, production capacity, clinical trials, regulatory approvals, competitive position and the impact of changes in the competitive environment, supply chain, and the businesses of our contract manufacturers and suppliers, integration of acquisitions and partner technologies, and the application of accounting guidance.

In particular, forward-looking statements contained in this Quarterly Report may relate to, among other things, our future or assumed financial condition, results of operations, liquidity, trends impacting our financial results, the impact of our foreign currency forward hedging contracts, business forecasts and plans, research and product development plans, product pipelines, development timelines, manufacturing plans, strategic plans and objectives, capital needs and financing plans, product launches, geographic expansion, distribution plans, production capacity, clinical trials, regulatory approvals, competitive position and the impact of changes in the competitive environment, supply chain, and the businesses of our contract manufacturers and suppliers, integration of acquisitions and partner technologies, and the application of accounting guidance.

We caution you that the foregoing list may not include all of the forward-looking statements made in this Quarterly Report.

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We are a global insulin delivery and diabetes technology company focused on the design, development and commercialization of technology solutions that reduce the burden of diabetes management.

We consider our primary addressable market to be people who live with type 1 diabetes.

We recently expanded our addressable market in the United States following U.S.

Food and Drug Administration (FDA) clearance of our products for people living with type 2 diabetes, ages 18 and older who require intensive insulin therapy.

Diabetes management can vary greatly from person-to-person, creating multiple market segments based on clinical needs and personal preferences.

We consider our primary addressable market to be people who live with type 1 diabetes, and recently expanded our U.S.

addressable market to include people living with type 2 diabetes who require intensive insulin therapy.

We sell to customers in approximately 25 countries worldwide, with the majority of our sales derived from customers in the United States.

Our goal is to address the individual needs of people with insulin-dependent diabetes and their care team, by offering flexibility and choice in intelligent insulin delivery systems, through an accessible portfolio of market-leading pumps, applications, and insights.

From inception in 2012 through 2018, we derived nearly all of our sales from the shipment of insulin pumps and associated supplies to customers in the United States.

Starting in the third quarter of 2018, we began selling in select geographies outside the United States and our technology solutions are now available in 25 countries worldwide.

Through our portfolio approach, we offer people living with diabetes a choice in their therapy management system based on their individual needs and preferences.

In support of this strategy, our portfolio includes both the t:slim X2 and the Tandem Mobi insulin pumps.

In support of this strategy, our portfolio includes both the t:slim X2 and Tandem Mobi insulin pumps.

The Tandem Mobi insulin pump is the world’s smallest durable automated insulin delivery (AID) system.

At approximately half the size of our t:slim X2 pump, Tandem Mobi is designed for people who seek even greater discretion and flexibility, and includes features such as expanded pump-control from our iOS mobile application, inductive charging, and an on-pump button that can be used for bolusing and other actions.

Beginning in early 2024, we scaled the commercial release of Tandem Mobi in the United States, first offering CGM integration with the Dexcom G6 sensor beginning in February 2024 followed by the Dexcom G7 beginning in June 2024.

In the first half of 2024, we scaled the commercial release of Tandem Mobi in the United States.

In May 2025, we received CE Mark approval for the Tandem Mobi insulin delivery system with Control-IQ+ technology.

We are pursuing additional regulatory and pre-commercial activities, such as securing in-country registrations and reimbursement, before launching Tandem Mobi outside the United States.

The vast majority of our customers use their insulin pump with CGM integration.

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Control-IQ+ is an advanced hybrid-closed loop feature designed to help increase a user’s time in their targeted glycemic range.

Multiple studies, including four publications in the New England Journal of Medicine with the most recent in March 2025 , have demonstrated that use of Control-IQ technology provides people across all demographics with improved clinical outcomes that are both immediate and sustained.

Multiple studies, including four publications in the New England Journal of Medicine with the most recent in March 2025 , have demonstrated that use of Control-IQ+ technology, and its predecessor Control-IQ technology, provide people across all demographics with improved clinical outcomes that are both immediate and sustained.

The t:slim X2 was the first pump in the industry on which remote software updates were made commercially available in the United States and is now also available in the countries we serve worldwide.

This feature allows our t:slim X2 and Tandem Mobi customers to update their pump software independently.

This feature allows our customers to update their pump software independently.

We believe this offering is a competitive advantage that allows us to bring our customers clinical and lifestyle enhancements within their warranty cycle without having to purchase a new pump.

These enhancements include new developments in our AID technology, CGM integrations and mobile app features.

For example, we recently offered a pump software update to allow Tandem pump users access to the latest generation of our algorithm, Control-IQ+ technology, offering greater levels of personalization and flexibility within our algorithm.

These enhancements generally include new developments in our AID technology, CGM integrations and mobile app features.

For more than a decade we have offered our customers, their caregivers and healthcare providers a data management application to provide a fast, easy and visual way to display diabetes therapy management data from our pumps and integrated CGMs.

In the second quarter of 2023, we expanded our digital technology solutions with the launch of Tandem Source in the United States.

In the second quarter of 2024, we began a scaled launch of Tandem Source outside the United States.

In the second quarter of 2024, we began the launch of Tandem Source outside the United States.

In addition to displaying diabetes therapy management data, Tandem Source is also designed to serve as a portal for supplies reordering and pump software updates.

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While warranties generally expire four years from the original pump shipment date, those customers that renew take on average up to one year from date of warranty expiration to purchase a subsequent pump.

While the majority of our insulin pump sales from initial commercialization through the current period have been generated by sales to new customers, the opportunity to make subsequent sales of renewal insulin pumps to existing customers increases each period as an escalating number of customer warranties expire.

With programs dedicated to customer retention efforts, we expect such renewal purchases to represent an increasing portion of our pump shipments over time.

At December 31, 2024, we had over 480,000 users in our in-warranty installed base, approximately one-third of whom live outside the United States.

With programs dedicated to customer retention efforts, renewal sales have become a meaningful opportunity and key growth driver for our business.

At December 31, 2024, we had more than 480,000 users in our in-warranty installed base, approximately one-third of whom live outside the United States.

The ordering patterns of, and levels of inventory carried by, our distributors outside the United States for pumps and supplies have historically been highly variable from period to period due to a number of factors, including summer vacations, the timing of product launches, expansion into new geographies and variability due to supply chain logistics, particularly during the global pandemic.

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Our financial condition and operating results have historically fluctuated on a quarterly or annual basis.

We expect these periodic fluctuations will continue to be impacted by a number of trends and uncertainties, including the following:

We expect periodic fluctuations will continue based on a number of trends and uncertainties, including the following:

Regulatory Approvals and Actions

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• Regulatory approval and/or upcoming launches of other new Tandem or competing products could also adversely impact timing of purchasing decisions.

• In periods following new product launches, particularly with new hardware platforms, our cost of sales may increase on a per unit basis until the new products achieve manufacturing scale and operating expenses may be elevated by increased sales and marketing spend to support the product launches.

Reimbursement

• Our insulin pump products are generally considered durable medical equipment (DME) and have an expected lifespan of at least four years.

• In 2025, we began implementing a multi-channel managed care strategy.

Historically, our insulin pump products have generally been considered durable medical equipment (DME) with an expected lifespan of at least four years.

In addition to insulin pumps, we sell single-use products that are used together with our 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.

Because of the DME classification, our pumps and supplies are typically reimbursed through a medical benefit.

As our portfolio expands, we are implementing a multi-channel managed care strategy and have begun serving Mobi customers through the pharmacy channel on a scaled basis in 2025.

In the first quarter of 2025, we began serving Tandem Mobi customers through the pharmacy channel on a scaled basis, and are preparing to serve t:slim X2 customers for their cartridges and infusion sets beginning in the fourth quarter of 2025.

• We generally have had broad insurance coverage for our current products from third-party payors.

Our revenue and results of operations may be impacted by the failure to secure or retain adequate coverage, changes in reimbursement structures or availability of affordable options for our customers.

Our revenue and results of operations may be impacted by the failure to secure or retain adequate coverage consistent with current reimbursement levels, changes in reimbursement structures or availability of affordable options for our customers.

Macroeconomic Factors

• Global economic and market uncertainty, such as recessionary concerns, changes in discretionary spending and increased interest rates have impacted our customers’ purchasing decisions and the buying patterns of our distributors.

• High inflation, fluctuations in foreign currency valuations, uncertainty regarding tariffs and trade relations, and the effects of other macroeconomic factors and concerns have disrupted and may continue to disrupt our relationships with suppliers, third-party manufacturers, healthcare providers, distributors and our existing or potential customers.

Components of Results of Operations

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When a customer elected to participate in Tandem Choice, we recognized the existing sales deferral, incremental fees received and the associated costs of goods sold for the new insulin pump, Tandem Mobi, at the time of fulfillment.

Qualifying customers were able to elect participation in Tandem Choice starting near the end of the second quarter of 2024.

Qualifying customers were able to elect participation in Tandem Choice beginning in the second quarter of 2024.

The remaining deferral balance was recognized as revenue when the program ended on December 31, 2024.

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Other significant SG&A expenses typically include those incurred for commercialization activities associated with new product launches, travel, trade shows, outside legal fees, independent auditor fees, outside consultant fees, insurance premiums, facilities costs and information technology costs.

Litigation and Settlement Expense

Litigation and settlement expense reflects costs of litigation and settlement in conjunction with a cross-license agreement with F.

Hoffmann-La Roche AG and its subsidiaries, entered into during the second quarter of 2025.

Research and Development

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Income Tax Expense (Benefit)

Because the Company maintains a full valuation allowance against its net deferred tax assets, income tax expense is expected to primarily consist of current federal, state and foreign cash tax expense as a result of taxable income anticipated or incurred in those jurisdictions.

Because the Company maintains a full valuation allowance against its net deferred tax assets, income tax expense (benefit) is expected to primarily consist of current federal, state and foreign cash tax expense (benefit) as a result of taxable income (loss) anticipated or incurred in those jurisdictions.

Results of Operations

Three Months Ended

June 30, Six Months Ended June 30,

(in thousands, except percentages) 2025 2024 2025 2024

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Selling, general and administrative 109,596 94,242 223,449 184,348

Litigation and settlement expense

19,951 — 19,951 —

Research and development 48,118 49,326 98,333 95,570

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Other income (expense), net:

Interest income and other, net 4,193 5,314

Interest income and other income (expense), net (632) 2,824 3,561 8,138

Interest expense (1,905) (1,793) (3,767) (3,690)

Loss from equity method investments

(3,375) — (6,917) —

Loss on extinguishment of debt — — — (1,268)

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Loss before income taxes (57,722) (29,743) (179,811) (69,272)

Income tax expense 8,467 3,186

Income tax expense (benefit)

(5,322) 1,071 3,145 4,257

Net loss $ (52,400) $ (30,814) $ (182,956) $ (73,529)

Comparison of the Three Months Ended March 31, 2025 and 2024

For the three months ended March 31, 2025, we shipped nearly 29,000 pumps worldwide.

Comparison of the Three Months Ended June 30, 2025 and 2024

For the three months ended June 30, 2025, we shipped more than 30,000 pumps worldwide.

Sales were $240.7 million, which included $70.5 million of sales outside the United States.

Sales were $191.7 million for the three months ended March 31, 2024, which included $61.9 million of sales outside the United States.

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

Sales were $221.9 million for the three months ended June 30, 2024, which included $65.2 million of sales outside the United States.

For the three months ended June 30, 2024, we recognized incremental pump sales of $0.2 million as a result of Tandem Choice fulfillment.

Sales by product in the United States were as follows (in thousands):

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Supplies and other 84,742 74,812

Net revenue deferred for Tandem Choice program

Net revenue recognized for Tandem Choice program — 154

Total Sales in the United States $ 170,209 $ 156,711

Pump sales in the United States increased primarily due to growth in pump shipments to over 17,000 in the first quarter of 2025, compared to 15,000 in the first quarter of 2024.

Sales of pump-related supplies increased as a result of volume growth, as well as an increase in average selling prices.

Sales in the first quarter of 2024 were reduced by $1.1 million from sales deferrals related to Tandem Choice, for which there were no comparable adjustments in 2025.

Pump and supply sales in the United States increased due to growth in volumes and average selling prices.

Pump shipments increased to approximately 21,000 in the second quarter of 2025, compared to approximately 20,000 in the second quarter of 2024.

Sales in the second quarter of 2024 included $0.2 million in sales from Tandem Choice fulfillment, for which there was no comparable adjustment in 2025.

Sales by product outside the United States were as follows (in thousands):

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Total Sales Outside the United States $ 70,469 $ 65,199

For the first quarter of 2025, both pumps and pump-related supply sales increased due to a year-over-year increase in volumes, with pump shipments growing to over 11,000 pumps for the first quarter of 2025, compared to 10,000 in the first quarter of 2024.

For the second quarter of 2025, total sales outside the United States increased primarily due to growth in supply volumes, improved average selling prices, geographical mix, and favorable changes in foreign exchange rates.

Pump shipments decreased slightly to approximately 9,000 pumps for the second quarter of 2025 compared to nearly 10,000 pumps in the second quarter of 2024.

Cost of Sales and Gross Profit

Our cost of sales for the three months ended March 31, 2025 was $116.0 million , resulting in gross profit of $118.4 million, compared to cost of sales of $97.0 million and gross profit of $94.7 million for the same period in 2024.

The gross margins for the three-month periods ended March 31, 2025 and 2024 were 51% and 49%, respectively.

This increase in gross margin was primarily driven by an improvement in pump manufacturing and non-manufacturing costs per unit.

Our cost of sales for the three months ended June 30, 2025 was $114.8 million, resulting in gross profit of $125.9 million, compared to cost of sales of $109.1 million and gross profit of $112.8 million for the same period in 2024.

The gross margins for the three-month periods ended June 30, 2025 and 2024 were 52% and 51%, respectively.

This increase in gross margin was primarily driven by improvement in average selling prices, partially offset by the impact of less favorable product mix and non-manufacturing costs.

Operating Expenses

Our operating expenses for the three months ended March 31, 2025 were $239.3 million, compared to $136.4 million for the three months ended March 31, 2024.

The $102.9 million increase was primarily driven by a $75.2 million charge to IPR&D in connection with the revised AMF purchase agreement (see Note 12, “Acquisitions”), as well as costs related to operating lease impairment and restructuring charges related to relocation of certain research and development activities and sales force expansion.

Our operating expenses for the three months ended June 30, 2025 were $177.7 million, compared to $143.6 million for the three months ended June 30, 2024.

The $34.1 million increase was primarily driven by $20.0 million in litigation and settlement expenses.

Additionally, operating expenses increased due primarily to higher employee-related expenses.

Selling, General and Administrative Expenses.

SG&A expenses, including one-time charges for non-recurring facility impairment costs of $6.7 million and restructuring costs of $2.2 million, were $113.9 million for the three months ended March 31, 2025, compared to $90.1 million for the same period in 2024.

After one-time costs, the remaining increase was largely driven by higher employee-related expenses of $11.0 million due to increased headcount and sales force expansion.

Three Months Ended

SG&A expenses were $109.6 million for the three months ended June 30, 2025, compared to $94.2 million for the same period in 2024.

The increase was driven by commercial investments in the sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe and initiatives to create future efficiencies in operations.

Litigation and Settlement Expense.

Litigation and settlement expenses of $20.0 million for the three months ended June 30, 2025 related to a Settlement, Mutual Release and Cross-License Agreement with F.

Hoffmann-La Roche AG and its subsidiaries (the “Cross-License Agreement”) (see Intangible Assets Subject to Amortization, Note 2, “Summary of Significant Accounting Policies”).

We did not incur any legal settlement expenses for the three months ended June 30, 2024.

Research and Development Expenses .

R&D expenses decreased to $48.1 million for the three months ended June 30, 2025, from $49.3 million for the same period in 2024.

The decrease in R&D expenses was primarily due to lower employee-related expenses as a result of restructuring activities that occurred in the first quarter of 2025.

Other Income (Expense), Net

Total other income (expense), net for the three months ended June 30, 2025 was a $5.9 million loss, compared to $1.0 million of income for the same period in 2024.

Other expense, net for the three months ended June 30, 2025 primarily consisted of $4.3 million of unrealized losses on foreign currency remeasurements, $3.4 million loss on equity investment and $1.9 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, partially offset by $3.4 million of interest income earned on our cash equivalents and short-term investments.

Other income, net for the three months ended June 30, 2024 was $1.0 million of income, primarily consisting of $5.3 million of interest income earned on our cash equivalents and short-term investments, partially offset by $2.0 million impairment on a strategic investment in a private company, and $1.8 million of interest expense which included the amortization of debt issuance costs.

Income Tax Expense

We recognized income tax benefit of $5.3 million on a pre-tax loss of $57.7 million for the three months ended June 30, 2025, compared to income tax expense of $1.1 million on a pre-tax loss of $29.7 million for the three months ended June 30, 2024.

Income tax benefit and expense for the three months ended June 30, 2025 and 2024, respectively, was primarily attributable to federal, state and foreign income tax benefit and expense as a result of current taxable income in certain jurisdictions.

Comparison of the Six Months Ended June 30, 2025 and 2024

For the six months ended June 30, 2025, we shipped approximately 59,000 pumps worldwide.

Sales were $475.1 million, which included $154.3 million of sales outside the United States.

Sales were $413.6 million for the six months ended June 30, 2024, which included $127.1 million of sales outside the United States.

For the six months ended June 30, 2024, we deferred $1.0 million of pump sales as the result of Tandem Choice.

Sales by product in the United States were as follows (in thousands):

Six Months Ended

Pump $ 157,608 $ 143,465

Supplies and other 163,233 143,999

Net revenue deferred for Tandem Choice program

Total Sales in the United States $ 320,841 $ 286,472

Pump and supply sales in the United States increased primarily due to growth in shipment volumes and increased average selling prices.

Pumps shipments increased to over 38,000 for the six months ended June 30, 2025, compared to nearly 36,000 for the six months ended June 30, 2024.

Sales in the first half of 2024 were reduced by $1.0 million from net sales deferrals related to Tandem Choice, for which there were no comparable adjustments for the same period in 2025.

Sales by product outside the United States were as follows (in thousands):

Six Months Ended

Pump $ 56,354 $ 51,697

Supplies and other 97,905 75,415

Total Sales Outside the United States $ 154,259 $ 127,112

For the six months ended June 30, 2025, both pumps and pump-related supply sales increased due to a year-over-year increase in shipment volumes and average selling prices, with pump shipments growing to over 20,000 pumps in the six months ended June 30, 2025, compared to approximately 19,000 in the six months ended June 30, 2024.

Cost of Sales and Gross Profit

Our cost of sales for the six months ended June 30, 2025 was $230.8 million , resulting in gross profit of $244.3 million, compared to cost of sales of $206.1 million and gross profit of $207.5 million for the same period in 2024.

The gross margins for the six-month periods ended June 30, 2025 and 2024 were 51% and 50%, respectively.

This increase in gross margin was primarily driven by improved average selling prices, partially offset by the impact of less favorable product mix.

Operating Expenses

Our operating expenses for the six months ended June 30, 2025 were $417.0 million, compared to $279.9 million for the six months ended June 30, 2024.

The $137.1 million increase was primarily driven by a $75.2 million charge to IPR&D in connection with the revised AMF purchase agreement (see Note 13, “Acquisitions”) and a $20.0 million litigation and settlement expense, as well as costs related to operating lease impairment and restructuring charges related to relocation of certain research and development activities and sales force expansion.

Selling, General and Administrative Expenses.

SG&A expenses, including one-time charges for non-recurring facility impairment costs of $6.7 million and restructuring costs of $2.2 million, were $223.4 million for the six months ended June 30, 2025, compared to $184.3 million for the same period in 2024.

After one-time costs, the remaining increase was largely driven by commercial investments in sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe and initiatives to create future efficiencies in operations.

Six Months Ended

Selling, general and administrative

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$ 223,449 $ 184,348

Litigation and Settlement Expense.

Litigation and settlement expenses of $20.0 million for the six months ended June 30, 2025 related to the Cross-License Agreement.

We did not incur any legal settlement expenses for the six months ended June 30, 2024.

Research and Development Expenses .

R&D expenses, including one-time charges for non-recurring restructuring costs of $2.3 million, increased to $50.2 million for the three months ended March 31, 2025, from $46.2 million for the same period in 2024.

After one-time costs, the remaining increase in R&D expenses was primarily the result of other employee expenses.

Three Months Ended

R&D expenses, including one-time charges for non-recurring restructuring costs of $2.3 million, increased to $98.3 million for the six months ended June 30, 2025, from $95.6 million for the same period in 2024.

After one-time costs, R&D expenses were relatively flat compared to the prior year.

Six Months Ended

Research and development

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

Acquired IPR&D expenses were $75.2 million for the three months ended March 31, 2025, which represented costs associated with the revised AMF purchase agreement (see Note 12, “Acquisitions”).

We did not incur any IPR&D expenses for the three months ended March 31, 2024.

Acquired IPR&D expenses were $75.2 million for the six months ended June 30, 2025, which represented costs associated with the revised AMF purchase agreement (see Note 13, “Acquisitions”).

We did not incur any IPR&D expenses for the six months ended June 30, 2024.

Other Income (Expense), Net

Total other income (expense), net for the three months ended March 31, 2025 was a $1.2 million loss, compared to $2.1 million of income for the same period in 2024.

Other expense, net for the three months ended March 31, 2025 primarily consisted of $3.5 million loss on equity investment and $1.9 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes due 2025 and 2029 (the 2025 Notes and the 2029 Notes, respectively), offset by $4.3 million of interest income earned on our cash equivalents and short-term investments.

Other income, net for the three months ended March 31, 2024 primarily consisted of $5.3 million of interest income earned on our cash equivalents and short-term investments, partially offset by $1.9 million of interest expense which included the amortization of debt issuance costs related to the 2025 Notes and the 2029 Notes.

We also incurred a loss on debt extinguishment of $1.3 million during the three months ended March 31, 2024.

Total other income (expense), net for the six months ended June 30, 2025 was a $7.1 million loss, compared to $3.2 million for the same period in 2024.

Other expense, net for the six months ended June 30, 2025 primarily consisted of $6.9 million loss on equity investment and $3.8 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, and $4.3 million unrealized loss from foreign currency remeasurement, offset by $7.9 million of interest income earned on our cash equivalents and short-term investments.

Other income, net for the six months ended June 30, 2024 primarily consisted of $10.8 million of interest income earned on our cash equivalents and short-term investments, partially offset by $3.7 million of interest expense which included the amortization of debt issuance costs, and $1.3 million loss on debt extinguishment.

Income Tax Expense

We recognized income tax expense of $8.5 million on a pre-tax loss of $122.1 million for the three months ended March 31, 2025, compared to income tax expense of $3.2 million on a pre-tax loss of $39.5 million for the three months ended March 31, 2024.

Income tax expense for the three months ended March 31, 2025 and 2024 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

We recognized income tax expense of $3.1 million on a pre-tax loss of $179.8 million for the six months ended June 30, 2025, compared to income tax expense of $4.3 million on a pre-tax loss of $69.3 million for the six months ended June 30, 2024.

Income tax expense for the six months ended June 30, 2025 and 2024 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

Liquidity and Capital Resources

At March 31, 2025, we had $368.6 million in cash and cash equivalents and short-term investments.

At June 30, 2025, we had $315.4 million in cash and cash equivalents and short-term investments.

We believe that our cash and cash equivalents, short-term investments, and future cash flows from operations will be sufficient to fund our ongoing core business activities for at least the next 12 months.

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We expect to rely on these sources of cash, primarily from product sales, to fund our material cash requirements in both the short and long term.

The following table shows a summary of our cash flows for the three months ended March 31, 2025, and 2024 (in thousands):

Three Months Ended March 31,

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

Net cash provided by (used in):

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Operating Activities .

Net cash used in operating activities was $18.3 million for the three months ended March 31, 2025, compared to $8.0 million used in the same period in 2024.

For the three months ended March 31, 2025, net loss was $130.6 million, net non-cash adjustments were $118.1 million, and changes in working capital balances was a decrease of $5.8 million.

For the three months ended March 31, 2024, net loss was $42.7 million, net non-cash adjustments were $29.8 million and change in working capital balances was an increase of $4.9 million.

Net cash used in operating activities was $27.8 million for the six months ended June 30, 2025, compared to $13.3 million used in the same period in 2024.

For the six months ended June 30, 2025, net loss was $183.0 million, net non-cash adjustments were $151.8 million, and the change in working capital balances was an increase of $3.4 million.

For the six months ended June 30, 2024, net loss was $73.5 million, net non-cash adjustments were $63.8 million and the change in working capital balances was a decrease of $3.6 million.

Investing Activities .

Net cash provided by investing activities was $9.2 million for the three months ended March 31, 2025, which primarily consisted of $65.1 million in proceeds from maturities and redemptions of short-term investments, offset by $43.5 million paid for IPR&D, $9.5 million in purchases of short-term investments, and $3.0 million in purchases of property and equipment.

Net cash used in investing activities was $5.1 million for the three months ended March 31, 2024, which primarily consisted of $84.2 million in purchases of short-term investments, and $4.5 million in purchases of property and equipment, offset by $83.7 million in proceeds from maturities and redemptions of short-term investments.

Net cash provided by investing activities was $67.3 million for the six months ended June 30, 2025, which primarily consisted of $146.4 million in proceeds from maturities and redemptions of short-term investments, offset by $43.5 million paid for IPR&D, $26.5 million in purchases of short-term investments, and $9.2 million in purchases of property and equipment.

Net cash used in investing activities was $8.6 million for the six months ended June 30, 2024, which primarily consisted of $177.7 million in purchases of short-term investments, and $10.9 million in purchases of property and equipment, offset by $180.1 million in proceeds from maturities and redemptions of short-term investments.

Financing Activities.

Net cash used in financing activities was $4.7 million for the three months ended March 31, 2025, which consisted of payments for tax withholdings related to the issuance of common stock under our stock plans, partially offset by proceeds received from common stock issuances for the period.

Net cash provided by financing activities was $13.6 million for the three months ended March 31, 2024, which primarily consisted of net proceeds of $306.9 million from the issuance of the 2029 Notes, offset by $246.1 million used in the repurchase of the 2025 Notes, $30.0 million used to repurchase and retire common stock and $15.8 million used to purchase Capped Call Options related to the 2029 Notes.

In addition, $1.5 million was used in payments for tax withholdings related to the issuance of common stock under our stock plans.

Net cash used in financing activities was $44.4 million for the six months ended June 30, 2025, which consisted of $40.6 million used to pay the principal of the 2025 Notes and payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period.

Net cash provided by financing activities was $10.6 million for the six months ended June 30, 2024, which primarily consisted of net proceeds of $306.9 million from the issuance of the 2029 Notes which was partially offset by $246.1 million used in the repurchase of 2025 Notes, $30.0 million used in the repurchase and retirement of common stock and $15.8 million used to purchase Capped Call Options related to the 2029 Notes.

In addition, $4.5 million was used in payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period.

Our liquidity position and capital requirements are subject to fluctuation based on a number of factors.

23 unchanged sentences

There have been no material changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies Involving Management Estimates and Assumptions,” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes to our quantitative and qualitative disclosures about market risk during the three months ended March 31, 2025.

See Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for a detailed discussion of our market risks.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis