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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-26 · 136 added, 128 removed, 179 unchanged (60% of the section changed)

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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 are seeking to expand our addressable market to include people living with type 2 diabetes 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 serve approximately 500,000 people living with diabetes in more than 25 countries worldwide.

We consider our primary addressable market to be people living with type 1 diabetes and in 2025, began expanding our addressable market to include people living with type 2 diabetes who require intensive insulin therapy.

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, we recently expanded our portfolio which now 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 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 followed by the Dexcom G7 beginning in June.

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

In 2024, we expanded our portfolio with the commercial availability of Mobi with iOS control in the United States.

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

In December 2025, we further expanded the availability of Mobi to Android users in the United States.

We are pursuing additional regulatory and pre-commercial activities, such as securing in-country registrations and reimbursement, before launching Mobi internationally.

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 three publications in the New England Journal of Medicine, 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 , the most recent appearing in March 2025, demonstrate that both Control-IQ+ technology and its predecessor, Control-IQ technology, are associated with improved, immediate and sustained clinical outcomes for people living with type 1 or type 2 diabetes across diverse demographics.

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.

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, in 2024 we offered pump software updates to allow Tandem pump users access to integration with new CGM sensors.

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

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

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.

Since the launch of Tandem Source, we have enhanced and expanded our digital technology solutions, and will continue to scale into additional countries.

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.

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

Our Strategy & Future Technology

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Our goal is to redefine global leadership in insulin delivery with an accessible portfolio of transformational devices, applications and services that reduce the daily burden of living with diabetes.

In support of this strategy, our portfolio of future technologies includes enhancing the features and capabilities of our t:slim X2 and Tandem Mobi insulin pump platforms, including adding a tubeless infusion site option for Tandem Mobi users.

Our development efforts also include Sigi, our ergonomic and rechargeable patch pump, in addition to extended wear infusion technology and algorithm advancement in pursuit of offering fully closed loop technology.

In support of this strategy, our portfolio of future technologies includes enhancing the features and capabilities of our t:slim X2 and Mobi insulin pump platforms, including adding a tubeless, extended-wear infusion site option for Mobi users.

Our pipeline also includes a next-generation patch pump that incorporates our Sigi Patch Pump technology, and we anticipate marketing it as the next generation Mobi.

In addition, our development efforts include extended-wear infusion set technology, dual glucose-ketone sensor integration, and algorithm advancement in pursuit of offering fully closed loop technology.

Pump Reimbursement Cycle

Insulin pumps in the U.S.

have generally been reimbursed by third-party insurance carriers, government plans or healthcare systems through a medical benefit, subject to a four-year reimbursement cycle.

At the end of the typical four-year reimbursement cycle, customers may become eligible to purchase a new insulin pump, subject to the rules and requirements of their primary insurance payor.

In 2025, we began implementing a multi-channel managed care strategy in the United States, which provides the opportunity for reimbursement through a pharmacy benefit as an alternative to a medical benefit.

This strategic expansion supports broader access and flexibility in reimbursement pathways for our customers.

Through the medical benefit, pumps are generally reimbursed upfront, separate from the ongoing supply purchases.

In 2025, we began contracting for customers to receive their pumps and supplies through a pharmacy benefit with the same upfront reimbursement structure as a medical benefit, but are evolving to an alternative pay-as-you-go reimbursement structure in 2026.

This would eliminate the upfront pump reimbursement and distribute it across the ongoing supply purchases.

With a lower upfront cost, this model is expected to increase adoption of our products by reducing a barrier for patients when evaluating pump therapy.

Overall, we anticipate higher revenue in this model over the four-year life of each customer compared to a medical benefit today.

Under this new model, we may initially experience a decrease in sales and gross profit when pumps are shipped, which we expect to be offset by an increase in supply sales and gross profit from both our existing installed base and increased volumes.

Reimbursement models internationally also vary by geography between similar four-year purchase cycles and pump rental models, to which our exposure may grow as we build our direct presence in select markets.

These changing policies may reduce the reliance on renewal pump sales in future periods as a key growth driver of the business and underscores the importance of our programs dedicated to customer retention through supply sales.

Trends and Uncertainties Impacting Financial Results

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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The requirements and timelines to receive regulatory clearance can vary substantially from country to country and delays may impact our ability to expand our worldwide customer base and bring products to market in a competitive timeframe.

These delays, or failure to receive regulatory approval could adversely impact our revenue and results of operations.

These delays, or failure to receive regulatory approval, could adversely impact our sales and results of operations.

• Any adverse event involving products that we distribute could result in future corrective actions, such as recalls or customer notifications, or regulatory agency action, which could include inspection, mandatory recall or other enforcement action.

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The success of our products is variable and we believe it correlates to market acceptance, anticipated product launches and commercial availability.

• Seasonality in the United States is associated with annual insurance deductibles and coinsurance requirements of the medical insurance plans used by our customers and the customers of our distributors.

In the United States, we typically experience a higher volume of pump shipments in the second half of the year due to the nature of the reimbursement environment.

Other factors that may impact sales across the year include the timing of winter, summer and other seasonal holidays, particularly in our markets outside the United States.

• Seasonality in the United States is associated with annual insurance deductibles and coinsurance requirements of the medical benefit in insurance plans used by our customers and the customers of our distributors.

In the United States, we typically experience a higher volume of pump shipments in the second half of the year due to the nature of these reimbursement dynamics.

As we expand our access through the pharmacy benefit with no upfront reimbursement for an insulin pump, we anticipate there will be less of a seasonal impact on the business in future periods related to insurance deductibles and coinsurance requirements.

Other factors that may impact sales across the year include the timing of winter, summer and other seasonal holidays, particularly in our international markets.

• 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.

For example, we began operations of a European distribution center which led to a reduction of inventory levels at our distributors, significantly impacting sales patterns in the second half of 2022 and first half of 2023.

Reimbursement

• Our insulin pump products are generally considered durable medical equipment (DME) and have 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 2025, we began implementing a multi-channel managed care strategy in the United States, which provides the opportunity for reimbursement through a pharmacy benefit.

Historically, our products have been offered through a medical benefit where pumps are generally reimbursed upfront, separate from the ongoing supply purchases.

This strategic expansion into pharmacy supports broader access and greater affordability for our customers.

In the first quarter of 2025, we began establishing access for Tandem Mobi customers to receive their pumps and supplies through a pharmacy benefit with the same upfront reimbursement structure as the medical benefit.

In the third quarter of 2025, we expanded pharmacy coverage for existing t:slim X2 customers to receive their supplies through a pharmacy benefit.

In 2026, our primary focus will be to continue increasing our sales through the pharmacy benefit with improved scalability of operations, expanded coverage and a change in the reimbursement model.

Our contracts will be structured to a “pay as you go” model with reimbursement only for the ongoing supply purchases at a price premium to the DME model, recognizing the overall clinical value of our advanced systems and providing no reimbursement for the durable pump.

While transitioning to this model, we may initially experience a decrease in sales and gross profit when pumps are shipped, which we expect to be offset by an increase in supply sales and gross profit from both our existing installed base and increased volumes.

• 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 sales 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 the effects of other macroeconomic factors and concerns has disrupted and may continue to disrupt our relationships with suppliers, third-party manufacturers, healthcare providers, distributors and our existing or potential customers.

• 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, as well as impact our cost structure as more of our business is exposed to foreign currency fluctuations.

Components of Results of Operations

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Our primary customers are the end users of our products, non-exclusive distribution partners whose level of service varies based on geography, the healthcare professionals who prescribe our products and the healthcare systems or payors who provide insurance coverage and access to our products.

Our sales may fluctuate from period to period, particularly due to seasonality in the United States associated with the timing of insurance deductible resets, which generally reflect in a significant decline in pump shipments from any fourth quarter to the following first quarter.

Therefore, the lowest percentage of sales is typically reported in the first quarter of each calendar year and the highest percentage is typically reported in the fourth quarter.

Our sales may fluctuate from period to period.

See also “Trends and Uncertainties Impacting Financial Results — Markets, Seasonality, Competition, and Product Launches” above.

From September 2022 through February 2024, we offered the Tandem Choice program to eligible t:slim X2 customers to provide a pathway to ownership of our newest hardware platform, Tandem Mobi, for a fee once available.

From September 2022 through February 2024, we offered the Tandem Choice program to eligible t:slim X2 customers to provide a pathway to ownership of Tandem Mobi for a fee once available.

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.

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The program required the deferral of some portion of sales for shipments of eligible pumps between the third quarter of 2022 and the first quarter of 2024.

No election was made by the customer at the time of the initial sale, nor did the right offered to the customer impact the economics associated with how or when the initial pump sale was reimbursed.

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.

Cost of Sales

Cost of sales includes raw materials, labor costs, manufacturing overhead expenses, product training costs, royalties, freight, reserves for expected warranty costs, costs of supporting our digital health platforms, scrap and charges for excess and obsolete inventories.

Cost of sales primarily consists of raw materials, labor costs, manufacturing overhead expenses, reserves for expected warranty costs, product training costs, royalties, and freight.

Manufacturing overhead expenses include expenses relating to quality assurance, manufacturing engineering, material procurement, inventory control, facilities, equipment, information technology and operations supervision and management.

When taking into consideration the differences in reimbursement levels and cost structure, pumps have, and are expected to continue to have, a higher gross profit and gross margin percentage than our pump-related supplies on a per unit basis.

Therefore, the percentage of pump sales relative to total sales could have a significant impact on our overall gross margin percentage.

When taking into consideration the differences in reimbursement levels and cost structure, pumps have historically had a higher gross profit and gross margin percentage than our pump-related supplies on a per unit basis.

Therefore, the percentage of pump sales relative to total sales has had a significant impact on our overall gross margin percentage.

As we transition to a “pay as you go” model through the pharmacy benefit in the U.S., our overall gross profit and gross margin percentage may be negatively impacted when pumps are shipped, but may be partially or fully offset by the anticipated benefit from higher profits for our recurring sale of supplies.

Selling, General and Administrative

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Acquired In-process Research and Development (IPR&D)

Acquired IPR&D reflects costs of external research and development projects acquired directly in a transaction other than a business combination, that do not have an alternative future use.

Other Income and Expense

Other income and expense primarily consists of interest earned on our cash equivalents and short-term investments, income or loss from equity method investments, foreign currency transaction gains and losses and interest expense which includes the amortization of debt issuance costs related to our convertible senior notes.

Acquired IPR&D reflects costs of external research and development projects acquired directly in a transaction other than a business combination, which do not have an alternative future use.

Litigation and Settlement Expense

Litigation and settlement expense reflects costs of litigation and settlement in connection with the Roche Cross-License Agreement, entered into during 2025.

Other Income and Expense, Net

Other income and expense primarily consist of interest earned on our cash equivalents and short-term investments, income or loss from equity method investments, foreign currency transaction gains and losses and interest expense which includes the amortization of debt issuance costs related to our convertible senior notes.

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.

Due to the full valuation allowance against our domestic and foreign deferred tax assets, our consolidated tax provision or benefit in any period is a result of current taxable income or losses generated in the jurisdictions in which we operate as well as reserves established for current period tax uncertainties.

Results of Operations

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United States $ 706,936 $ 672,685

Outside the United States 267,518 192,840

International

307,800 267,518

Total sales 1,014,736 940,203

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Acquired in-process research and development 75,217 —

Litigation and settlement expense

Total operating expenses 733,271 588,701

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Loss from equity method investment

(14,194) (2,053)

Loss on extinguishment of debt — (1,268)

Change in fair value of common stock warrants — —

Total other income (expense), net (13,015) 7,257

Income (loss) before income taxes (91,870) (220,254)

Loss before income taxes

(200,272) (91,870)

Income tax expense

$ (204,710) $ (96,025)

Pump Reimbursement Cycle

Insulin pumps in the markets we serve worldwide are generally subject to a four-year reimbursement cycle, imposed by the third-party insurance carrier, government plan or healthcare system that serves as the primary payor.

At the end of the typical four-year reimbursement cycle, customers may be eligible to purchase a new insulin pump, subject to the rules and requirements of their primary insurance payor.

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.

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.

This also influences the timing in which renewal eligibility begins for existing customers, which may not initially be consistent with trends in the United States market.

We recently began completing full four-year reimbursement cycles in an increasing number of our markets outside of the United States.

Comparison of Years Ended December 31, 2025 and 2024

For the year ended December 31, 2024, we shipped more than 120,000 pumps worldwide.

Sales were $940.2 million, which included $267.5 million of sales outside the United States.

For the year ended December 31, 2024, we recognized $30.2 million in net revenue from pump sales as the result of the conclusion of our Tandem Choice program which launched in the United States in the third quarter of 2022 and ended in 2024.

For the year ended December 31, 2023, sales were $747.7 million, which included $192.8 million of sales outside the United States, and deferral of $25.1 million of pump sales as a result of Tandem Choice.

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

For the year ended December 31, 2025, we shipped more than 126,000 pumps worldwide compared to more than 120,000 for the year ended December 31, 2024.

Sales were $1.0 billion, which included $307.8 million of international sales.

For the year ended December 31, 2024, sales were $940.2 million, which included $267.5 million of international sales.

In 2024, we recognized $30.2 million in net pump sales as the result of the conclusion of our Tandem Choice program.

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

Year Ended December 31,

2024 2023 % Change

Pump $ 353,879 $ 328,625

Supplies and other 353,057 313,811

Net revenue recognized (deferred) for Tandem Choice program

30,249 (25,107) 220%

Net sales recognized for Tandem Choice program

Total sales in the United States

Pump sales in the United States were $328.6 million for the year ended December 31, 2024 compared to $289.5 million for the year ended December 31, 2023.

Our pump shipments in the United States increased approximately 10% to nearly 81,000 pumps compared to the year ended December 31, 2023.

We also benefited from higher average selling prices across all product lines, driven by price increases and favorable customer mix, as we continue to shift a higher percent of sales from distribution to our direct channel.

Sales to distributors accounted for 61% and 64% of our total sales in the United States for the years ended December 31, 2024 and 2023, respectively.

Sales of pump-related supplies increased primarily due to a year-over-year increase in our installed base of customers in the United States, as well as an increase in average selling prices.

We also recognized $30.2 million in net revenue from pump sales due to the conclusion of Tandem Choice during the year ended December 31, 2024.

Sales in the United States for the year ended December 31, 2023 were reduced by $25.1 million in sales deferrals related to Tandem Choice.

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

$ 706,936 $ 672,685

For the year ended December 31, 2025, sales in the United States increased primarily due to increased volumes and improved average selling prices.

Pump shipments increased to more than 86,000 pumps for the year ended December 31, 2025 compared to nearly 81,000 for the year ended December 31, 2024.

Sales in the United States for the year ended December 31, 2024 included $30.2 million in sales related to Tandem Choice.

There was no comparable Tandem Choice adjustment for the same period in 2025.

International sales by product were as follows (in thousands):

Year Ended December 31,

2024 2023 % Change

Pump, net of rebates

110,260 105,544

Supplies and other 197,540 161,974

Total Sales Outside the United States $ 267,518 $ 192,840 39%

Pump sales, net of rebates, outside the United States were $105.5 million for the year ended December 31, 2024, compared to $76.3 million in the prior year.

Our pump shipments outside the United States increased by 30% to nearly 40,000 pumps for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Pump sales outside the United States in 2023 included a reduction of $8.5 million for the establishment of the new rebate structure implemented in a single market.

Sales of pump-related supplies increased due to a year-over-year increase in our installed base of customers outside the United States.

In addition, for the year ended December 31, 2024, we recorded a reduction to sales of $1.5 million due to sales rebates outside of the United States.

Total international sales

$ 307,800 $ 267,518

For the year ended December 31, 2025, international sales increased due to increased volumes, improved average selling prices and favorable changes in foreign currency exchange rates.

Pump sales increased slightly due to an increase in pump shipments to more than 40,000 for the year ended December 31, 2025 compared to nearly 40,000 for the year ended December 31, 2024.

Cost of Sales and Gross Profit

Our cost of sales for the year ended December 31, 2025 was $468.7 million, resulting in gross profit of $546.0 million, compared to cost of sales of $450.6 million and gross profit of $489.6 million for the year ended December 31, 2024.

The gross margin for 2024 was 52%, compared to 49% in 2023.

The increase in our gross profit for the year ended December 31, 2024 was primarily the result of the $192.5 million increase in total sales, driven by higher pump shipments, the impact of the conclusion of the Tandem Choice program and the greater impact of the sales rebate structure outside the United States in 2023 compared to 2024.

Additionally, we recognized charges to cost of sales of $1.3 million for Tandem Choice fulfillments in 2024, with no corresponding charge in 2023.

The net effect of the Tandem Choice adjustments increased gross margin by approximately one percentage point in 2024 and decreased gross margin by approximately two percentage points in 2023.

The new rebate structure negatively impacted gross margin by nearly one percentage point in 2023.

Excluding the impact of Tandem Choice and the sales rebate outside the United States, gross margin benefited from pricing improvement across all product lines and lower pump materials cost, offset by higher labor, overhead and non-manufacturing costs on a per-unit basis as we continued to scale the launch of Tandem Mobi.

Gross margin was positively impacted by product mix.

Pump sales, which have the highest gross margin, were 49% of total worldwide sales, excluding the impact of Tandem Choice in 2024, compared to 46% in 2023.

The gross margins for 2025 and 2024 were 54% and 52%, respectively.

The increase in gross margin was primarily driven by improved average selling prices and reduced non-manufacturing costs.

For the year ended December 31, 2024, gross margin benefited by approximately one percentage point due to the net effect of the Tandem Choice program sales offset by charges to cost of sales of $1.3 million for Tandem Choice fulfillments.

There was no comparable Tandem Choice adjustment for the same period in 2025.

Operating Expenses

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Selling, General and Administrative Expenses.

SG&A expenses increased 11% to $389.8 million for the year ended December 31, 2024, from $352.5 million for the same period in 2023.

Employee-related expenses for our SG&A functions comprised the majority of our SG&A expenses, which increased $33.6 million due to continued support services for our growing installed customer base.

Excluding certain non-recurring facilities consolidations costs of $14.1 million from 2023, we experienced a $17.9 million increase in other non-employee discretionary spending, primarily attributable to outside consulting, outside services, and supplies.

SG&A expenses were $445.0 million for the year ended December 31, 2025 compared to $389.8 million for the year ended December 31, 2024.

The increase in SG&A expenses was attributable to one-time charges for non-recurring facility impairment costs of $6.7 million and restructuring costs of $4.2 million.

After one-time costs, the remaining increase of $44.3 million 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.

Year Ended December 31, 2025

Selling, general and administrative

434,134 389,824

Non-recurring facility impairment costs

Restructuring costs

Total SG&A expenses

$ 444,989 $ 389,824

Research and Development Expenses .

R&D expenses increased 17% to $198.9 million for the year ended December 31, 2024, from $169.7 million for the same period in 2023.

The increase in R&D expenses was primarily the result of a $20.3 million increase in salaries and related benefits due to our acquisitions, as well as an increase in personnel to support our product development efforts.

We also experienced an $8.5 million increase in other non-employee discretionary spending, including outside services and consulting, clinical trial expenses, and equipment costs attributable to R&D.

Acquired In-Process Research and Development Expenses.

Acquired IPR&D expenses of $78.8 million for the year ended December 31, 2023, pertained to our 2023 acquisition of AMF Medical (see Note 12, “Acquisitions”).

R&D expenses were $193.1 million for the year ended December 31, 2025, compared to $198.9 million for the year ended December 31, 2024.

The year ended December 31, 2025 included $3.1 million of non-recurring restructuring costs.

Excluding these costs, the decrease was primarily due to lower employee expenses, including a $5.3 million reduction in stock-based compensation.

Year Ended December 31, 2025

Research and development

$ 190,002 $ 198,877

Restructuring costs

Total R&D expenses

$ 193,114 $ 198,877

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

Acquired IPR&D expenses were $75.2 million for the year ended December 31, 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 year ended December 31, 2024.

Litigation and Settlement Expense.

Litigation and settlement expenses of $20.0 million for the year ended December 31, 2025 were related to the Roche Cross-License Agreement (see Note 4 “Composition of Certain Financial Statement Items”).

We did not incur any litigation and settlement expenses for the year ended December 31, 2024.

Other Income (Expense), Net

Total other income, net for the year ended December 31, 2024 was $7.3 million, compared to $13.0 million in 2023.

Other income, net for 2024 primarily consisted of $22.1 million of interest income earned on our cash equivalents and short-term investments, offset by $7.4 million of interest expense, $2.1 million in losses attributable to equity method investments, $2.0 million loss on impairment of strategic investment, $2.0 million in foreign currency transaction losses, and $1.3 million loss on extinguishment of debt.

Other income, net for 2023 consisted primarily of $21.2 million of interest income earned on our cash equivalents and short-term investments, and $1.5 million in foreign currency transaction gains, partially offset by $9.9 million of interest expense which included $3.3 million of additional interest as discussed above and the amortization of debt issuance costs related to our Convertible Senior Notes.

Income Tax Expense

We recognized income tax expense of $4.2 million on a pre-tax loss of $91.9 million for the year ended December 31, 2024, compared to income tax expense of $2.4 million on a pre-tax loss of $220.3 million for the year ended December 31, 2023.

Income tax expense for the years ended December 31, 2024 and 2023 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

Total other income (expense), net for the year ended December 31, 2025 was a $13.0 million loss, compared to a net income of $7.3 million in 2024.

Other expense, net for 2025 primarily consisted of $14.2 million losses on an equity method investment, $7.9 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, and $5.4 million realized loss from foreign currency transactions, offset by $13.9 million of interest income earned on our cash equivalents and short-term investments.

Other income, net for 2024 primarily consisted of $22.1 million of interest income earned on our cash equivalents and short-term investments, offset by $7.4 million of interest expense, $2.1 million in losses attributable to equity method investments, $2.0 million loss on impairment of strategic investments, $2.0 million in foreign currency transaction losses, and a $1.3 million loss on extinguishment of debt.

Income Tax Expense (Benefit)

Income tax expense was $4.4 million on a pre-tax loss of $200.3 million for the year ended December 31, 2025, compared to income tax expense of $4.2 million on a pre-tax loss of $91.9 million for the year ended December 31, 2024.

Income tax expense for the year ended December 31, 2025 was due to current taxes at the United States federal and state levels, and in jurisdictions outside the United States.

Income tax expense for the year ended December 31, 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 December 31, 2024, we had $438.3 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.

Our historical cash outflows have primarily been associated with cash used for operating activities such as research and development activities, sales, marketing and commercialization of our products worldwide, expansion of clinical and customer support organizations, the acquisition of intellectual property, equity investments and acquired assets, capital expenditures and debt service costs.

As of December 31, 2025, we had $292.7 million in cash and cash equivalents and short-term investments.

Our historical cash outflows have primarily been associated with cash used for operating activities such as research and development activities, sales, marketing and commercialization of our products worldwide, expansion of clinical and customer support organizations, the acquisition of intellectual property, equity investments and asset acquisitions, capital expenditures and debt service costs.

Historically, our principal sources of cash have included cash collected from product sales, private and public offerings of equity securities, exercises of employee stock awards and debt financing.

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.

We expect to rely primarily on 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 twelve months ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

2024 2023 2022

Net cash provided by (used in):

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Effect of foreign exchange rate changes on cash 1,612 1,256

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

$ 21,400 $ 10,366

Operating activities .

Net cash provided by operating activities was $24.2 million for the year ended December 31, 2024, compared to net cash used in operating activities of $31.8 million for the year ended December 31, 2023.

The increase in net cash provided by operating activities for 2024 compared to 2023 was primarily a result of the $128.8 million decrease in net loss, offset by a decrease of $76.5 million net non-cash adjustments.

Net non-cash adjustments in 2023 were primarily related to acquired in-process research and development expenses, operating lease termination and impairment charges and stock-based compensation expense.

In addition, there was a net decrease of $3.7 million in changes of working capital balances.

Changes of working capital balances primarily consisted of decreases in deferred revenue, current liabilities and inventories, offset by increases to accounts receivable.

Net cash used in operating activities was $9.7 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $24.2 million for the year ended December 31, 2024.

For the year ended December 31, 2025, net loss was $204.7 million, net non-cash adjustments were $218.0 million, and the change in working capital balances was a decrease of $23.0 million.

For the year ended December 31, 2024, net loss was $96.0 million, net non-cash adjustments were $132.0 million and the change in working capital balances was a decrease of $11.8 million.

Investing activities .

Net cash used in investing activities was $23.5 million for the year ended December 31, 2024, which primarily consisted of $46.4 million cash paid for investments in equity method investees, $19.2 million in purchases of property and equipment, offset by $42.2 million provided by short-term investments activity as proceeds from maturities and redemptions exceeded purchases.

Net cash used in investing activities was $85.7 million for the year ended December 31, 2023, which primarily consisted of $69.5 million cash paid for the acquisition of AMF Medical, including transaction costs (see Note 12, “Acquisitions”), $26.8 million in purchases of property and equipment, and $24.8 million cash paid for purchases of intangible assets and strategic investments, offset by $35.4 million provided by short-term investments activity.

Net cash provided by investing activities was $72.9 million for the year ended December 31, 2025, which primarily consisted of $257.1 million in proceeds from sales, maturities and redemptions of short-term investments, offset by $85.7 million in purchases of short-term investments, $78.6 million paid for IPR&D, and $19.9 million in purchases of property and equipment.

Net cash used in investing activities was $23.5 million for the year ended December 31, 2024, which primarily consisted of $264.3 million of purchases of short-term investments, $46.4 million paid for the acquisition of licensed patents, and $19.2 million in purchases of property and equipment, offset by $306.5 million in proceeds from maturities and redemptions of short-term investments.

Financing activities .

Net cash used in financing activities was $43.4 million for the year ended December 31, 2025, which consisted of $40.8 million used to pay the principal portion 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 $8.4 million for the year ended December 31, 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, $6.7 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.

Net cash provided by financing activities was $4.1 million for the year ended December 31, 2023, which primarily consisted of proceeds from the issuance of common stock under our stock plans, net of payments for related tax withholdings.

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

In particular, our cash inflows and outflows are principally impacted by the following:

• our ability to generate sales, the timing of those sales, the mix of products sold and the collection of receivables from period to period;

• our ability to generate sales, the timing of those sales, the quantity of pumps sold through the pharmacy channel under the “pay as you go” reimbursement model, the mix of products sold and the collection of receivables from period to period;

• contractual debt obligations, including periodic interest payments;

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• the timing and amount of proceeds from the issuance of equity awards pursuant to employee stock plans;

• fluctuations in gross and operating margins;

• fluctuations in costs, gross and operating margins;

• fluctuations in working capital, including changes in accounts receivable, inventories, accounts payable, employee-related liabilities, and operating lease liabilities.

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In March 2024, we 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 and cash used to pay the cost of certain capped call transactions (see Note 7, “Debt”).

The proceeds from the issuance of the 2029 Notes were $306.8 million, net of debt issuance costs and cash used to pay the cost of certain capped call transactions and repurchase and retire common stock (see Note 7, “Debt”).

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.

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The 2029 Notes mature on March 15, 2029 unless repurchased, redeemed, or converted in accordance with their terms prior to the maturity date.

In May 2020, we entered into a purchase agreement with certain counterparties for the sale of an aggregate of $287.5 million principal amount of 1.50% Convertible Senior Notes due 2025.

The proceeds from the issuance of the Notes were $244.6 million, net of debt issuance costs and cash used to pay the cost of the Capped Call Transactions (see Note 7, “Debt”).

Cash payments due by calendar year for our Convertible Senior Notes at December 31, 2024, are as follows (in thousands):

Cash payments due by calendar year for our Convertible Senior Notes as of December 31, 2025, are as follows (in thousands):

2026 2027 2028 2029 2030

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316,250 — — — 316,250 —

Convertible Senior Notes Due 2029

316,250 — — — — 316,250

Total principal amount

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The promissory note accrues interest at the rate of 5% per year, and becomes due and payable upon the first sale or license of the commercialized product.

At December 31, 2024, $4.8 million was included as a component of other long-term liabilities on the consolidated balance sheet.

As of December 31, 2025, $4.9 million was included as a component of other current liabilities on the consolidated balance sheets.

Critical Accounting Estimates

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We lease general office space, laboratory, manufacturing and warehouse facilities, and equipment under noncancelable operating leases for use in our operations.

For a description of our contractual obligations related to leases at December 31, 2024, see Note 6 “Leases” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

For a description of our contractual obligations related to leases as of December 31, 2025, see Note 6 “Leases” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

Purchase Order Commitments

We have agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets.

For a description of our contractual obligations related to purchase order commitments at December 31, 2024, see Note 13 “Commitments and Contingencies” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

Acquisition-related Contingent Consideration

In connection with our acquisition of AMF Medical SA completed in January of 2023, the total consideration included cash paid at the closing of the transaction and additional contingent earnout payments (see Note 12, “Acquisitions” to the consolidated financial statements in Part II, Item 8 of this Annual Report for additional information).

For a description of our contractual obligations related to purchase order commitments as of December 31, 2025, see Note 14 “Commitments and Contingencies” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

Standby Letter of Credit

1 unchanged sentence

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

What changed 10-K

Item 7. Management’s Discussion and Analysis