TANDEM DIABETES CARE INC 10-Q

Item 1. Financial Statements. TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) June 30, December 31, 2025 2024 Assets (Unaudited) (Note 1) Current assets: Cash and cash equivalents $ 64,112 $ 69,234 Short-term investments 251,249 369,095 Accounts receivable, net 128,443 114,585 Inventories 142,573 149,612 Prepaid and other current assets 28,440 21,965 Total current assets 614,817 724,491 Property and equipment, net 77,513 78,150 Operating lease right-of-use assets 98,436 85,306 Equity method investments 67,628 74,545 Other long-term assets 17,342 5,166 Total assets $ 875,736 $ 967,658 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 55,838 $ 44,730 Accrued expenses 13,764 18,170 Employee-related liabilities 51,691 64,128 Current portion of convertible senior notes, net — 40,670 Operating lease liabilities 19,888 18,208 Deferred revenue 10,516 11,831 Other current liabilities 99,993 49,312 Total current liabilities 251,690 247,049 Convertible senior notes, net - long-term 309,146 308,266 Operating lease liabilities - long-term 119,974 106,421 Deferred revenue - long-term 9,575 10,455 Other long-term liabilities 52,068 32,369 Total liabilities 742,453 704,560 Commitments and contingencies (Note 14) — — Stockholders’ equity: Common stock, $ 0.001 par value; 200,000 shares authorized, 67,531 and 66,264 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively. 68 66 Additional paid-in capital 1,360,251 1,312,804 Accumulated other comprehensive income (loss) 3,745 ( 1,947 ) Accumulated deficit ( 1,230,781 ) ( 1,047,825 ) Total stockholders’ equity 133,283 263,098 Total liabilities and stockholders’ equity $ 875,736 $ 967,658 See accompanying notes to unaudited condensed consolidated financial statements. 1 TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Sales $ 240,678 $ 221,910 $ 475,100 $ 413,584 Cost of sales 114,823 109,116 230,838 206,118 Gross profit 125,855 112,794 244,262 207,466 Operating expenses: 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 Acquired in-process research and development expenses — — 75,217 — Total operating expenses 177,665 143,568 416,950 279,918 Operating loss ( 51,810 ) ( 30,774 ) ( 172,688 ) ( 72,452 ) Other income (expense), net: 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 ) Total other income (expense), net ( 5,912 ) 1,031 ( 7,123 ) 3,180 Loss before income taxes ( 57,722 ) ( 29,743 ) ( 179,811 ) ( 69,272 ) Income tax expense (benefit) ( 5,322 ) 1,071 3,145 4,257 Net loss $ ( 52,400 ) $ ( 30,814 ) $ ( 182,956 ) $ ( 73,529 ) Other comprehensive income (loss): Unrealized gain (loss) on short-term investments $ ( 98 ) $ ( 463 ) $ 325 $ ( 1,759 ) Unrealized loss on cash flow hedges ( 612 ) — ( 612 ) — Foreign currency translation gains (losses) 4,380 145 5,979 ( 863 ) Comprehensive loss $ ( 48,730 ) $ ( 31,132 ) $ ( 177,264 ) $ ( 76,151 ) Net loss per share - basic and diluted $ ( 0.78 ) $ ( 0.47 ) $ ( 2.74 ) $ ( 1.13 ) Weighted average shares used to compute basic and diluted net loss per share 67,050 64,994 66,729 65,160 See accompanying notes to unaudited condensed consolidated financial statements. 2 TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands) Three Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at March 31, 2025 66,568 $ 67 $ 1,333,531 $ 75 $ ( 1,178,381 ) $ 155,292 Exercise of stock options 10 — 171 — — 171 Vesting of restricted stock units, net of shares withheld for taxes 502 1 ( 6,320 ) — — ( 6,319 ) Issuance of common stock for Employee Stock Purchase Plan 451 — 7,194 — — 7,194 Stock-based compensation expense — — 25,675 — — 25,675 Unrealized loss on short-term investments — — — ( 98 ) — ( 98 ) Unrealized loss on cash flow hedges — — — ( 612 ) — ( 612 ) Foreign currency translation gains — — — 4,380 — 4,380 Net loss — — — — ( 52,400 ) ( 52,400 ) Balance at June 30, 2025 67,531 $ 68 $ 1,360,251 $ 3,745 $ ( 1,230,781 ) $ 133,283 Six Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 66,264 $ 66 $ 1,312,804 $ ( 1,947 ) $ ( 1,047,825 ) $ 263,098 Exercise of stock options 53 — 871 — — 871 Vesting of restricted stock units, net of shares withheld for taxes 763 1 ( 11,708 ) — — ( 11,707 ) Issuance of common stock under Employee Stock Purchase Plan 451 1 7,194 — — 7,195 Stock-based compensation expense — — 51,090 — — 51,090 Unrealized gain on short-term investments — — — 325 — 325 Unrealized loss on cash flow hedges — — — ( 612 ) — ( 612 ) Foreign currency translation gains — — — 5,979 — 5,979 Net loss — — — — ( 182,956 ) ( 182,956 ) Balance at June 30, 2025 67,531 $ 68 $ 1,360,251 $ 3,745 $ ( 1,230,781 ) $ 133,283 See accompanying notes to unaudited condensed consolidated financial statements. 3 Three Months Ended June 30, 2024 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at March 31, 2024 64,563 $ 65 $ 1,238,449 $ ( 935 ) $ ( 994,515 ) $ 243,064 Exercise of stock options 55 — 1,149 — — 1,149 Vesting of restricted stock units, net of shares withheld for taxes 415 — ( 10,438 ) — — ( 10,438 ) Issuance of common stock for Employee Stock Purchase Plan 402 — 6,286 — — 6,286 Stock-based compensation expense — — 24,946 — — 24,946 Unrealized loss on short-term investments — — — ( 463 ) — ( 463 ) Foreign currency translation gains — — — 145 — 145 Net loss — — — — ( 30,814 ) ( 30,814 ) Balance at June 30, 2024 65,435 $ 65 $ 1,260,392 $ ( 1,253 ) $ ( 1,025,329 ) $ 233,875 Six Months Ended June 30, 2024 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2023 65,552 $ 66 $ 1,263,997 $ 1,369 $ ( 951,800 ) $ 313,632 Stock repurchase and retirement of shares ( 1,107 ) ( 1 ) ( 29,999 ) — — ( 30,000 ) Exercise of stock options 70 — 1,397 — — 1,397 Vesting of restricted stock units, net of shares withheld for taxes 518 — ( 12,197 ) — — ( 12,197 ) Issuance of common stock under Employee Stock Purchase Plan 402 — 6,286 — — 6,286 Exercise of common stock warrants — — — — — — Stock-based compensation expense — — 46,537 — — 46,537 Purchase of capped call options related to convertible notes due 2029 — — ( 15,813 ) — — ( 15,813 ) Unwind of capped call options related to convertible notes due 2025 — — 184 — — 184 Unrealized gain on short-term investments — — — ( 1,759 ) — ( 1,759 ) Foreign currency translation losses — — — ( 863 ) — ( 863 ) Net loss — — — — ( 73,529 ) ( 73,529 ) Balance at June 30, 2024 65,435 $ 65 $ 1,260,392 $ ( 1,253 ) $ ( 1,025,329 ) $ 233,875 See accompanying notes to unaudited condensed consolidated financial statements. 4 TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Six Months Ended June 30, 2025 2024 Operating Activities Net loss $ ( 182,956 ) $ ( 73,529 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization expense 8,678 8,151 Amortization of debt issuance costs 970 1,085 Provision for expected credit losses 3,577 3,723 Operating lease and other impairment charges 6,697 2,000 Accretion (amortization) of discount or premium on short-term investments ( 1,780 ) 348 Loss from equity method investments 6,917 — Stock-based compensation expense 51,130 46,936 Loss on extinguishment of debt — 1,268 Acquired in-process research and development expenses 75,217 — Other 424 335 Changes in operating assets and liabilities: Accounts receivable, net ( 13,516 ) 2,862 Inventories 12,058 ( 5,157 ) Prepaid and other current assets ( 2,348 ) ( 4,782 ) Other long-term assets 3,524 93 Accounts payable and accrued expenses 5,739 241 Employee-related liabilities ( 12,649 ) ( 462 ) Deferred revenue ( 2,710 ) ( 1,261 ) Operating leases and other current liabilities 8,403 3,967 Other long-term liabilities 4,851 911 Net cash used in operating activities ( 27,774 ) ( 13,271 ) Investing Activities Purchases of short-term investments ( 26,496 ) ( 177,724 ) Proceeds from maturities and redemptions of short-term investments 146,447 180,051 Purchases of property and equipment ( 9,171 ) ( 10,923 ) Acquisition of in-process research and development ( 43,464 ) — Net cash provided by (used in) investing activities 67,316 ( 8,596 ) Financing Activities Proceeds from issuance of convertible senior notes due 2029, net of $ 9,400 debt issuance costs — 306,850 Repurchase of $ 246,740 principal amount of convertible senior notes due 2025 — ( 246,123 ) Principal payments on convertible senior notes due 2025 ( 40,760 ) — Payment for capped call transactions related to convertible senior notes due 2029 — ( 15,813 ) Repurchase and retirement of common stock — ( 30,000 ) Cash used to settle withholding taxes on vested restricted stock, net of proceeds from issuance of common stock under Company stock plans ( 3,641 ) ( 4,513 ) Other financing activities — 183 Net cash provided by (used in) financing activities ( 44,401 ) 10,584 Effect of foreign exchange rate changes on cash ( 263 ) 112 Net increase (decrease) in cash and cash equivalents ( 5,122 ) ( 11,171 ) Cash and cash equivalents at beginning of period 69,234 58,868 Cash and cash equivalents at end of period $ 64,112 $ 47,697 Supplemental disclosures of cash flow information Income taxes paid $ 4,892 $ 1,183 Supplemental schedule of non-cash investing and financing activities Operating lease right-of-use assets obtained in exchange for operating lease obligations $ — $ 3,783 Purchases of property and equipment included in accounts payable $ 1,073 $ 1,505 Intangible costs in other long term-liabilities $ 13,300 $ — See accompanying notes to unaudited condensed consolidated financial statements. 5 TANDEM DIABETES CARE, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Basis of Presentation The Company 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. is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc., together with its wholly-owned subsidiaries. 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 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 Company’s mobile application and cloud-based diabetes management applications. The Company’s durable insulin pump products generally 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. Basis of Presentation and Principles of Consolidation The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the financial information contained herein have been included. 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, 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. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The functional currency of the Company’s foreign subsidiaries is their respective local currency. The Company translates the financial statements of its foreign subsidiaries into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses. Translation-related adjustments are included in other comprehensive income (loss) in the condensed consolidated statements of operations, and in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Company’s condensed consolidated balance sheets. Foreign exchange gains or losses resulting from balances denominated in a currency other than the functional currency are recognized in interest income and other, net in the Company’s condensed consolidated statements of operations. 2. Summary of Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2025, as compared to those disclosed in the Annual Report, except for the addition of the accounting policy related to derivatives and hedging activities, which is included herein. 6 Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes as of the date of the condensed consolidated financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Accounts Receivable The Company grants credit to various customers in the ordinary course of business and is paid directly by customers who use its products, distributors and third-party insurance payors. The Company maintains an allowance for its current estimate of expected credit losses. Provisions for expected credit losses are estimated based on historical experience, assessment of specific customer-related risks, review of outstanding invoices, forecasts about the future, and various other assumptions and estimates that are believed to be reasonable under the circumstances, including changes to credit risks as a result of recessionary concerns, changes in discretionary spending, increased interest rates, and other macroeconomic factors. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. Operating Lease Right-of-Use Assets and Liabilities Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized when the Company takes possession of the leased property (Commencement Date) based on the present value of lease payments over the lease term. For lease agreements that contain lease and non-lease components, the Company accounts for both of those components as a single lease component. Rent expense on noncancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning on the Commencement Date. The difference between rent expense and rent paid is accounted for as a component of operating lease right-of-use assets on the Company’s condensed consolidated balance sheets. Landlord improvement allowances and other similar lease incentives are recorded as a reduction of the right-of-use leased assets, and are amortized on a straight-line basis as a reduction to operating lease costs. Intangible Assets Subject to Amortization Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recognized over their estimated useful lives on a straight-line basis. On May 21, 2025, the Company and various Roche entities (collectively “Roche”) entered into a Settlement, Mutual Release and Cross-License Agreement (the “Settlement Agreement”). The Settlement Agreement resolved all actual or potential patent disputes as of the agreement date, including the actions pending before courts of the Unified Patent Court in France and Germany. Under the terms of the Settlement Agreement, the Company agreed to pay Roche $ 36.0 million over a four-year period, with an initial cash payment of $ 8.0 million and four equal annual installments thereafter. The installment payments include approximately $ 4.4 million of imputed interest. As a result, the Company recorded a $ 31.6 million liability, representing the present value of the total settlement obligation. Upon payment of the initial installment, which occurred in the second quarter of 2025, both parties granted each other non-exclusive, non-royalty-bearing, non-transferrable, and irrevocable licenses to their respective insulin delivery system-related patents and applications for a period of 10 years. The Company allocated the present value of the settlement consideration between the value of the licensed patents and the release of past and potential future claims. Based on a relative fair value approach, $ 13.3 million was capitalized as an intangible asset for the value of the license, which will be amortized over seven years , reflecting the estimated useful life of the acquired patents. The remaining consideration was expensed as settlement and litigation expense with related legal fees during the three and six months ended June 30, 2025. The fair value of the licensed patents was estimated using a discounted cash flow model, which incorporated assumptions including projected revenues associated with the licensed technology, a technology migration rate, an estimated royalty rate, and a discount rate. The fair value of the past damages claimed was estimated based on applicable historical revenues and an estimated royalty rate. 7 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 half of 2025 (see Note 6, “Leases”), there were no other impairments of long-lived assets, including acquired intangible assets, during the three and six months ended June 30, 2025 and 2024. Equity Method Investments The Company held equity method investments of $ 67.6 million and $ 74.5 million at June 30, 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 $ 3.4 million and $ 6.9 million for the three and six months ended June 30, 2025, respectively. For the three and six months ended June 30, 2024, the Company did not hold any equity method investments and therefore did no t 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, prompt payment discounts and a provision for product 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 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. Generally, insulin pumps, cartridges, infusion sets, and accessories are deemed performance obligations that are satisfied at a point in time when the customer obtains control of the promised good, which typically is upon shipment for our distributor arrangements and upon receipt for sales directly to individual customers. Complementary products, such as the Company’s data management and software update platforms, are considered distinct performance obligations that are satisfied over time, as access and support for these products is provided throughout the typical four-year warranty period of the insulin pumps. Accordingly, revenue related to the complementary products is deferred and recognized over a four-year period. 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. 8 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 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 six months ended June 30, 2024, the Company deferred $ 1.1 million of pump sales as the result of Tandem Choice, and recognized incremental sales of $ 0.2 million from individual Tandem Choice fulfillments. There was no comparative adjustment to pump sales in 2025. Derivative Instruments and Hedging Activities The Company records the fair value of derivative instruments as either current assets or current liabilities on the condensed consolidated balance sheets. Changes in the fair value of derivative instruments are recorded each period in current earnings or other comprehensive income (loss), depending on whether a derivative instrument is designated as part of a hedging transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, the Company formally documents the nature and relationships between the hedging instrument and hedged item. For derivatives formally designated as hedges, the Company assesses both at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. Gains or losses on cash flow hedges are reclassified from other comprehensive income (loss) to earnings when the hedged transaction occurs and affects consolidated results. If the Company determines that a forecasted transaction is no longer probable of occurring, the Company discontinues hedge accounting and any related unrealized gain or loss on the derivative instrument is recognized in current earnings. Derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings. 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. 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 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. 9 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 and six months ended June 30, 2025 and 2024 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Balance at beginning of the period $ 52,210 $ 37,638 $ 51,408 $ 37,173 Provision for warranties issued during the period 9,656 9,581 18,473 19,990 Settlements made during the period ( 9,308 ) ( 9,062 ) ( 17,699 ) ( 18,099 ) Increases (decreases) in warranty estimates 1,645 ( 801 ) 2,021 ( 1,708 ) Balance at end of the period $ 54,203 $ 37,356 $ 54,203 $ 37,356 As of June 30, 2025 and December 31, 2024, total product warranty reserves were included in the following consolidated balance sheet accounts (in thousands): June 30, 2025 December 31, 2024 Other current liabilities $ 32,648 $ 31,048 Other long-term liabilities 21,555 20,360 Total warranty reserve $ 54,203 $ 51,408 Stock-Based Compensation 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 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”). The fair value of restricted stock unit (RSU) awards issued under the Company’s stock incentive plans that vest solely based on service, is estimated based on the fair market value of the underlying stock on the date of grant. The fair value of RSU awards that vest based upon the Company’s actual performance relative to predefined performance metrics and the awardee’s continuing service through the measurement date is generally estimated based on the fair market value of the underlying stock on the date of grant and the probability that the specified performance criteria will be met. At each reporting period, the Company reassesses the probability of the achievement of such performance metrics. Any expense change resulting from an adjustment in the estimated shares to be released is recorded in the period of adjustment. 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 six months ended June 30, 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. 10 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Options to purchase common stock 113 804 114 129 Unvested restricted stock units 3,117 3,322 2,734 2,865 Warrants to purchase common stock 194 194 194 194 Awards granted under the ESPP 54 59 53 29 Convertible senior notes (if-converted) 9,159 9,513 9,335 6,877 12,637 13,892 12,430 10,094 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. 3. 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 June 30, 2025 and December 31, 2024 (in thousands): At June 30, 2025 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Available-for-sale securities: United States Government-sponsored enterprises $ 105,369 $ 640 $ — $ 106,009 United States Treasury securities 72,791 63 ( 51 ) 72,803 Commercial paper 1,726 — ( 1 ) 1,725 Corporate debt securities 70,600 122 ( 10 ) 70,712 Total $ 250,486 $ 825 $ ( 62 ) $ 251,249 11 At December 31, 2024 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Available-for-sale securities: United States Government-sponsored enterprises $ 133,139 $ 275 $ ( 134 ) $ 133,280 United States Treasury securities 103,645 197 ( 140 ) 103,702 Commercial paper 23,225 39 — 23,264 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 June 30, 2025, were as follows (in thousands): Years to Maturity At June 30, 2025 Within One Year One to Two Years Two to Three Years Estimated Fair Value United States Government-sponsored enterprises $ 13,244 $ 82,700 $ 10,065 $ 106,009 United States Treasury securities 61,902 10,901 — 72,803 Commercial paper 1,725 — — 1,725 Corporate debt securities 35,147 35,565 — 70,712 Total $ 112,018 $ 129,166 $ 10,065 $ 251,249 The Company has classified all marketable securities, regardless of maturity, as short-term investments based upon the Company’s ability and intent to use any of those marketable securities to satisfy the Company’s liquidity requirements. 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 June 30, 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. 4. Composition of Certain Financial Statement Items Accounts Receivable Accounts receivable, net consisted of the following at June 30, 2025 and December 31, 2024 (in thousands): June 30, December 31, 2025 2024 Accounts receivable $ 134,538 $ 121,836 Less: allowance for credit losses ( 6,095 ) ( 7,251 ) Accounts receivable, net $ 128,443 $ 114,585 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 six months ended June 30, 2025 and 2024 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Balance at beginning of the period $ 7,125 $ 4,923 $ 7,251 $ 4,898 Provision for expected credit losses 2,146 1,525 3,577 3,723 Write-offs and adjustments, net of recoveries ( 3,176 ) ( 1,223 ) ( 4,733 ) ( 3,396 ) Balance at end of the period $ 6,095 $ 5,225 $ 6,095 $ 5,225 12 Inventories Inventories consisted of the following at June 30, 2025 and December 31, 2024 (in thousands): June 30, December 31, 2025 2024 Raw materials $ 31,077 $ 32,602 Work-in-process 28,957 33,517 Finished goods 82,539 83,493 Total inventories $ 142,573 $ 149,612 5. 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 June 30, 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 June 30, 2025 Total Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 53,993 $ 53,993 $ — $ — Available-for-sale securities: United States Government-sponsored enterprises 106,009 — 106,009 — United States Treasury securities 72,803 72,803 — — Commercial paper 1,725 — 1,725 — Corporate debt securities 70,712 — 70,712 — Total assets $ 305,242 $ 126,796 $ 178,446 $ — Liabilities Foreign exchange forward contracts $ 612 $ — $ 612 $ — Total liabilities $ 612 $ — $ 612 $ — Fair Value Measurements at December 31, 2024 Total Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 56,234 $ 56,234 $ — $ — United States Government-sponsored enterprises 133,280 — 133,280 — United States Treasury securities 103,702 103,702 — — Commercial paper 23,264 — 23,264 — Corporate debt securities 105,836 — 105,836 — Foreign government bonds 3,013 — 3,013 — Total assets $ 425,329 $ 159,936 $ 265,393 $ — (1) Generally, cash equivalents include money market funds and investments with a maturity of three months or less from the date of purchase. The Company’s Level 1 financial instruments, which are in active markets, are valued using unadjusted quoted market prices for identical instruments. 13 The Company’s Level 2 financial instruments are valued using market prices on less active markets with observable valuation inputs such as interest rates and yield curves. The Company obtains the fair value of Level 2 financial instruments from quoted market prices, calculated prices or quotes from third-party pricing services. 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 June 30, 2025 and 2024, respectively. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments are carried at fair value. 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 June 30, 2025 December 31, 2024 Convertible Senior Notes due 2025 $ — $ 39,130 Convertible Senior Notes due 2029 304,514 407,752 Total fair value of outstanding convertible senior notes $ 304,514 $ 446,882 6. Leases The Company’s leases consist of operating leases for facility space to support general office, research and development, manufacturing and warehouse facilities, and equipment. These noncancellable operating leases have initial lease terms from two years to thirteen years . Certain leases include an option to renew, with renewal terms that can extend the lease term for additional periods at the Company’s sole discretion. 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. 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. 14 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 in the first quarter of 2025, 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 consolidated statements of operations were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Operating lease cost (excluding sublease income) $ 4,304 $ 3,564 $ 8,523 $ 7,081 Short-term lease cost 111 21 118 43 Loss on lease termination and right-of-use asset impairment charges — — 6,697 — Sublease income, gross ( 566 ) — ( 1,132 ) — Total lease cost $ 3,849 $ 3,585 $ 14,206 $ 7,124 Maturities of operating lease liabilities at June 30, 2025 were as follows (in thousands): Years Ending December 31, 2025 $ 9,445 2026 20,764 2027 21,048 2028 17,630 2029 16,553 Thereafter 97,125 Total undiscounted lease payments 182,565 Less: amount representing interest ( 42,703 ) Present value of operating lease liabilities 139,862 Less: current portion of operating lease liabilities ( 19,888 ) Operating lease liabilities - long-term $ 119,974 The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows: June 30, 2025 December 31, 2024 Weighted-average remaining lease term (in years) 9.1 9.2 Weighted-average discount rate used to determine operating lease liabilities 5.7 % 5.3 % 15 7. Debt Convertible Senior Notes Due 2029 On March 8, 2024, the Company completed an offering of $ 316.3 million aggregate principal amount of 1.50 % Convertible Senior Notes due 2029 (the 2029 Notes). The proceeds from the issuance of the 2029 Notes were $ 306.8 million, net of debt issuance costs. The Company used approximately $ 246.1 million of the net proceeds to repurchase approximately $ 246.7 million in aggregate principal amount of its Convertible Senior Notes Due 2025 (the 2025 Notes) concurrently with the pricing of the 2029 Notes in privately negotiated transactions. 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 six months ended June 30, 2024. The loss on extinguishment of debt included the unamortized debt issuance costs related to the portion of the 2025 Notes repurchased. The Company used $ 30.0 million of the net proceeds to repurchase shares of the Company’s common stock from certain purchasers of the 2029 Notes at a purchase price equal to the last reported sale price per share of the Company’s common stock on March 5, 2024, which was $ 27.105 per share. In addition, the Company used $ 15.8 million of the net proceeds to pay the cost of the capped call transactions (2029 Capped Call Transactions) discussed below. The 2029 Notes are the Company’s senior unsecured obligations. Interest is payable in cash semi-annually in arrears on March 15 and September 15 of each year beginning on September 15, 2024, at a rate of 1.50 % per year. The 2029 Notes mature on March 15, 2029 unless repurchased, redeemed, or converted in accordance with their terms prior to the maturity date. The initial conversion rate for the 2029 Notes is 28.9361 shares of common stock per $1,000 principal amount of the 2029 Notes, which is equivalent to an initial conversion price of approximately $ 34.56 per share of the Company’s common stock (2029 Notes Conversion Price). The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2029 Notes. The Company may not redeem the 2029 Notes before March 22, 2027. The Company has the option to redeem for cash all or any portion of the 2029 Notes on or after March 22, 2027 if the last reported sale price of the Company’s common stock has been at least 130 % of the 2029 Notes Conversion Price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period, at a redemption price equal to 100 % of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest. No sinking fund is provided for the 2029 Notes. Holders of the 2029 Notes may convert all or a portion of their 2029 Notes at their option before December 15, 2028, in multiples of $1,000 principal amounts, only under the following circumstances: • during any calendar quarter commencing after the quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the 2029 Notes Conversion Price on each applicable trading day; • during the five business day period after any ten consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate of the 2029 Notes on such trading day; • if the Company calls such 2029 Notes for redemption, at any time before the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or • on the occurrence of specified corporate events. 16 On or after December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2029 Notes, in integral multiples of $1,000 principal amount, 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 2029 Notes. Convertible Senior Notes Due 2025 In May 2020, the Company completed an offering of $ 287.5 million aggregate principal amount of 1.50 % Convertible Senior Notes due 2025 (the 2025 Notes). 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 certain related capped call 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 matured in the second quarter of 2025, and the Company settled the balance of $ 40.8 million using existing cash balances. The net carrying amount of the Company’s convertible senior notes on the condensed consolidated balance sheets consisted of the following (in thousands): June 30, 2025 December 31, 2024 Principal amount: Convertible Senior Notes Due 2025 $ — $ 40,760 Convertible Senior Notes Due 2029 316,250 316,250 Total principal amount 316,250 357,010 Unamortized debt issuance costs ( 7,104 ) ( 8,074 ) Total debt, net $ 309,146 $ 348,936 Less: current portion — ( 40,670 ) Long-term senior convertible notes $ 309,146 $ 308,266 As of June 30, 2025, the if-converted value of the 2029 Notes did no t 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Effective interest rate: Convertible Senior Notes Due 2025 (1) 2.2 % 2.2 % 2.2 % 2.2 % Convertible Senior Notes Due 2029 2.1 % 2.1 % 2.1 % 2.1 % (1) The effective interest rate presented represents the rate applicable for the period outstanding. The 2025 Notes matured in May 2025, and the outstanding principal balance was settled using cash balances. The following table details interest expense related to the Notes recognized for the three and six months ended June 30, 2025 and 2024 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Contractual interest expense $ 1,237 $ 1,339 $ 2,576 $ 2,484 Amortization of debt issuance costs 465 435 970 902 Total interest expense $ 1,702 $ 1,774 $ 3,546 $ 3,386 17 2029 Capped Call Transactions In connection with the issuance of the 2029 Notes, the Company entered into Capped Call Transactions in March 2024 with certain counterparties at a net cost of $ 15.8 million (2029 Capped Call Transactions). The 2029 Capped Call Transactions are expected generally to reduce potential dilution to the Common Stock upon any conversion of the 2029 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap based on a cap price initially equal to $ 42.0128 per share, and is subject to certain adjustments under the terms of the 2029 Capped Call Transactions. 2025 Capped Call Transactions In connection with the issuance of the 2025 Notes, the Company entered into Capped Call Transactions in May 2020 with certain counterparties at a net cost of $ 34.1 million (2025 Capped Call Transactions). The 2025 Capped Call Transactions were expected generally to reduce potential dilution to the Common Stock upon any conversion of the 2025 Notes and/or offset any cash payments the Company was required to make in excess of the principal amount of converted 2025 Notes, as the case may be, with such reduction or offset subject to a cap. The cap price of the 2025 Capped Call Transactions was initially $ 173.18 per share of the Company’s common stock and was subject to certain adjustments under the terms of the 2025 Capped Call Transactions. In connection with the repurchase of certain 2025 Notes, the Company entered into unwind agreements with the existing option counterparties in March 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 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. The remaining 2025 Capped Call Transactions expired when the 2025 Notes matured in May 2025. 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 June 30, 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. 8. Stockholders’ Equity Shares Reserved for Future Issuance The following shares of the Company's common stock were reserved for future issuance at June 30, 2025 (in thousands): Shares reserved for issuance upon conversion of Convertible Senior Notes 9,335 Shares underlying outstanding warrants 194 Shares underlying outstanding stock options 3,054 Shares underlying unvested restricted stock units 4,351 Shares authorized for issuance pursuant to awards granted under the ESPP 2,233 Shares authorized for future equity award grants 328 Total 19,495 18 Common Stock Warrants Warrants outstanding to purchase shares of the Company's common stock as of June 30, 2025 were as follows: Issue Date Exercise Price Per Share Warrants Outstanding Expiration Date of Warrants Outstanding March 2017 $ 23.50 193,788 March 2027 Each warrant allows the holder to purchase one share of common stock at the per share exercise price of the warrant. 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cost of sales $ 1,751 $ 1,760 $ 3,476 $ 3,830 Selling, general and administrative 16,544 15,518 32,919 28,807 Research and development 7,347 7,619 14,735 14,299 Total stock-based compensation expense $ 25,642 $ 24,897 $ 51,130 $ 46,936 The total stock-based compensation expense capitalized as part of the cost of the Company’s inventories was $ 1.7 million at June 30, 2025, and $ 1.8 million at December 31, 2024. Restricted Stock Units Restricted stock units (RSUs) have a grant value equal to the closing price of the Company’s common stock on the award date. The total number of RSUs granted and the respective weighted average grant date fair value were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 RSUs granted 1,953,827 1,694,239 2,044,370 2,052,298 Weighted average grant date fair value (per share) $ 20.77 $ 48.30 $ 21.06 $ 44.30 Employee Stock Purchase Plan 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: Six Months Ended June 30, 2025 2024 Weighted average grant date fair value (per share) $ 10.86 $ 21.45 Risk-free interest rate 4.1 % 5.1 % Dividend yield 0.0 % 0.0 % Expected volatility 74.9 % 70.2 % Expected term (in years) 1.3 1.3 19 9. Derivatives Due to the global nature of the Company’s operations, a portion of revenue and operating expense are denominated in currencies other than the U.S. dollar, exposing the Company to foreign currency exchange rate fluctuations. To mitigate the impact of these fluctuations, the Company uses foreign currency forward contracts to hedge a portion of its forecasted international revenue and operating expense. The Company’s foreign currency forward contracts are denominated primarily in Euros, Swiss Francs and Canadian dollars. As of June 30, 2025, foreign currency forward contracts outstanding had durations ranging from one to three months . These contracts are designated as cash flow hedges. Unrealized gains or losses on these contracts are recorded in accumulated other comprehensive income (loss) (AOCI). Realized gains and losses of such contracts are recognized in revenue and operating expenses in the same period during which the hedged transactions affect the consolidated results of operations. The Company recognizes all cash flow hedge reclassifications from AOCI and fair value changes of excluded portions in the same line item in the condensed consolidated statements of income that has been impacted by the hedged item. The cash flow effects of our derivative contracts in the condensed consolidated statements of cash flows are included in net cash provided by operating activities. All derivative instruments are used solely for risk management purposes and are not for speculative trading purposes for up to a 90-day duration. For the periods presented, the Company did not have any non-designated hedges. The notional value of foreign currency forward contracts outstanding related to forecasted transactions was $ 37.7 million as of June 30, 2025. The unrealized loss of foreign currency forward contracts was $ 0.6 million for the three and six months ended June 30, 2025. The following table summarizes the effect of foreign currency forward contracts designated as hedging instruments in our condensed consolidated statements of income (in thousands): Three and Six Months Ended June 30, 2025 Net Gains (Losses) Reclassified from AOCI into Operating Income Designated cash flow hedges: Revenue $ ( 478 ) Operating expense ( 27 ) The Company did not enter into any foreign currency forward contracts that qualified for hedge accounting in 2024, and therefore there were no derivative assets or liabilities, nor adjustments to revenue or operating expense as a result of cash flow hedges during the three and six months ended June 30, 2024. 10. Employee Benefits 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. 11. Income Taxes For the three and six months ended June 30, 2025, the Company recognized income tax benefit of $ 5.3 million and tax expense of $ 3.1 million, respectively, on a pre-tax loss of $ 57.7 million and $ 179.8 million, respectively. The Company calculated the benefit and provision for income taxes for the three and six months ended June 30, 2025, respectively, 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 benefit and expense for the three and six months ended June 30, 2025 was primarily attributable to federal, state and foreign income tax benefit and expense as a result of current taxable losses and income in certain jurisdictions. 20 For the three and six months ended June 30, 2024, the Company recognized income tax expense of $ 1.1 million and $ 4.3 million, respectively, on a pre-tax loss of $ 29.7 million and $ 69.3 million, respectively. The Company calculated the provision for three and six months ended June 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 six months ended June 30, 2024 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions. The Company continues to maintain a full valuation allowance against its net deferred tax assets as of June 30, 2025, based on the current assessment that it is not more likely than not these future benefits will be realized before expiration. 12. Business Segment and Geographic Information Segment Reporting Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (CODM) in making decisions regarding resource allocation and assessing performance. 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 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 and six months ended June 30, 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 and six months ended June 30, 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 June 30, 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 and six months ended June 30, 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. In the United States and Canada, the Company also uses a direct sales force. The Company disaggregates its revenue by geography, major sales channel and product as management believes these categories best depict how the nature, amount and timing of revenues and cash flows are affected by economic factors. Revenues by Geographic Region and Customer Sales Channel During the three and six months ended June 30, 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 United States $ 170,209 $ 156,711 $ 320,841 $ 286,472 Outside the United States 70,469 65,199 154,259 127,112 Total Sales $ 240,678 $ 221,910 $ 475,100 $ 413,584 21 Revenues by Product During the three and six months ended June 30, 2025 and 2024, sales by product were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Pump $ 111,871 $ 107,875 $ 213,962 $ 195,162 Supplies and other 128,807 113,881 261,138 219,414 Net revenue recognized (deferred) for Tandem Choice program — 154 — ( 992 ) Total Sales $ 240,678 $ 221,910 475,100 413,584 Sales to distributors accounted for 61 % of the Company’s United States sales for both the three and six months ended June 30, 2025 and 63 % and 62 % for the three and six months ended June 30, 2024, respectively. Sales to distributors accounted for the vast majority of the Company’s sales outside the United States for the three and six-month periods ended June 30, 2025 and 2024. 13. Acquisitions 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 June 30, 2025. 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, 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 June 30, 2025, the remaining CHF 28 million was recorded as a short-term accrued liability for $ 35.2 million on the Company’s condensed consolidated balance sheet. 14. Commitments and Contingencies Legal and Regulatory Matters In November 2023, at the Unified Patent Court (UPC), Paris Central Division (UPC Paris), the Company 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. 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. The Company contended that the t:slim X2 pump did not infringe the ‘231 patent and that the claims of the ‘231 patent were invalid over the prior art and should be revoked 22 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 alleged the Company’s t:slim X2 insulin pump, and the offering, marketing, using, importing, possessing, and supplying of such devices infringed EP Patent No. 1 970 677 B1 (the ‘677 patent) and the Company alleged that the t:slim X2 pump did not infringe the ‘677 patent and that the claims of the ‘677 patent were invalid over the prior art and should be revoked. On May 21, 2025 the Company entered into a Settlement, Mutual Release and Cross-License Agreement to resolve all actual or potential patent disputes with Roche, including related to the matters above (see Intangible Assets Subject to Amortization, Note 2, “Summary of Significant Accounting Policies”). 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 June 30, 2025 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. 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 June 30, 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. 23