What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-02-19 compared with 2025-02-26 · 390 added, 380 removed, 790 unchanged (49% of the section changed)

8 unchanged sentences

We review our 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 December 31, 2024 were primarily due to an increase in market interest rates after certain debt securities were purchased.

Unrealized losses on available-for-sale debt securities as of December 31, 2025 were primarily due to an increase in market interest rates after certain debt securities were purchased.

Based on the credit quality of the available-for-sale debt securities in an unrealized loss position, and our current estimates of future cash flows to be collected from those securities, we believe the unrealized losses were not credit losses (see Note 3, “Short-Term Investments”).

2 unchanged sentences

Because of the short-term maturities of our financial instruments, we do not believe that an increase or decrease in market interest rates would have a significant impact on the realized value of our investment portfolio.

A hypothetical 100 basis-point (one percentage point) increase or decrease in interest rates compared to actual rates at December 31, 2024, would have affected the estimated fair value of our investments portfolio by approximately $3.4 million.

A hypothetical 100 basis-point (one percentage point) increase or decrease in interest rates compared to actual rates as of December 31, 2025, would have affected the estimated fair value of our investments portfolio by approximately $1.6 million.

In March 2024, we issued $316.3 million principal amount of Convertible Senior Notes, due in 2029, which bear interest at a fixed rate of 1.50% per year.

In May 2020, we issued $287.5 million principal amount of Convertible Senior Notes, which bear interest at a fixed rate of 1.50% per year, of which $40.8 million principal amount remained outstanding as of December 31, 2024.

Accordingly, we are not subject to interest rate risk related to the Convertible Senior Notes (see Note 7, “Debt”).

1 unchanged sentence

Our operations are primarily located in the United States.

In addition, we have a sales and marketing office in Canada, a distribution center in the Netherlands and, beginning in 2023, a research and development facility in Switzerland associated with the acquisition of AMF Medical.

We also have a sales and marketing office in Canada, a distribution center in the Netherlands, and offices in other countries in Europe such as Switzerland and the UK.

Beginning in 2026, we have initiated direct sales activities in other select European markets and will continue this transition across additional markets.

Our sales to customers in the United States are made in U.S.

Sales from our distribution center in the Netherlands are made to independent distributors under agreements denominated in Euros, and our sales in Canada are denominated in Canadian dollars.

Approximately 28% of our revenue was denominated in foreign currencies for the year ended December 31, 2024.

Sales from our distribution center in Europe and certain other international markets are made under agreements denominated in local currencies.

Approximately 30% of our sales were denominated in foreign currencies for the year ended December 31, 2025.

In addition, we purchase certain inventory from a third-party contract manufacturer located in Mexico.

We believe our exposure to foreign currency rate fluctuations is primarily related to our operations in Europe and Canada, and acquisition related contingent earnout payments (see Note 12, “Acquisitions”), where fluctuations in the rate of exchange between the U.S.

We believe our exposure to foreign currency rate fluctuations is primarily related to our operations in Europe and Canada where fluctuations in the rate of exchange between the U.S.

dollar and the local currency could adversely affect our financial results, including income and losses as well as assets and liabilities.

As we expand and further develop our operations in markets outside the United States, particularly in Europe, we will be exposed to additional foreign currency exchange rate risk.

As we expand and further develop our operations in international markets, particularly in Europe, we are exposed to additional foreign currency exchange rate risk.

In addition, from time to time, we have foreign currency exchange risk related to existing assets and liabilities, certain inventory purchase agreements, other committed transactions and forecasted future cash flows.

In certain circumstances, we may seek to manage such foreign currency exchange risk by using derivative instruments such as foreign currency exchange forward contracts to hedge our risk.

Beginning in 2025, we started using derivative instruments, including foreign currency exchange forward contracts, to hedge a portion of our foreign currency exposure.

We expect to continue evaluating and using hedging strategies where appropriate.

However, we may choose not to hedge some exposures for a variety of reasons, including prohibitive economic costs.

36 unchanged sentences

Auditing management’s expected replacement rates on pumps was complex as it required a significant level of effort due to the amount of data utilized in determining the expected replacement rates.

Management’s estimate considers historical claims experience and the assumption of historical data predictive of future activity and events.

Management’s estimate considers historical claims experience and the assumption of historical data is predictive of future activity and events.

It is possible that the future replacement rates may not be reflective of historical product replacement rates and changes in this assumption could have a material impact on the Company’s estimated reserve.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the warranty reserve process.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the warranty reserve process.

Specifically, we tested controls over management's review and calculation of the expected replacement rates, including controls over the accuracy and completeness of data used.

21 unchanged sentences

Equity method investments

60,351 74,545

Other long-term assets 22,866 5,166

18 unchanged sentences

Common stock, $ 0.001 par value;

200,000 shares authorized, 66,264 and 65,552 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively.

200,000 shares authorized, 68,291 and 66,264 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Additional paid-in capital 1,402,044 1,312,804

17 unchanged sentences

Acquired in-process research and development expenses 75,217 — 78,750

Litigation and settlement expense

Total operating expenses 733,271 588,701 600,920

2 unchanged sentences

Other income (expense), net:

Interest income and other, net 17,993 22,858 6,057

Interest income and other income, net

9,086 17,993 22,858

Interest expense ( 7,907 ) ( 7,415 ) ( 9,882 )

2 unchanged sentences

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

Change in fair value of common stock warrants — — 147

Total other income (expense), net ( 13,015 ) 7,257 12,976

3 unchanged sentences

4,438 4,155 2,357

$ ( 204,710 ) $ ( 96,025 ) $ ( 222,611 )

Other comprehensive income (loss):

1 unchanged sentence

$ 517 $ ( 311 ) $ 3,606

Unrealized loss on cash flow hedges

Foreign currency translation gains (losses)

16 unchanged sentences

Stockholders’

Balance at December 31, 2021 63,833 $ 64 $ 1,068,259 $ ( 616 ) $ ( 634,595 ) $ 433,112

Exercise of stock options 280 1 9,130 — — 9,131

Vesting of restricted stock units, net of shares withheld for taxes 131 — ( 4,374 ) — — ( 4,374 )

Issuance of common stock under Employee Stock Purchase Plan 263 — 12,713 — — 12,713

Exercise of common stock warrants 6 — 83 — — 83

Stock-based compensation expense — — 85,077 — — 85,077

Unrealized loss on short-term investments — — — ( 2,233 ) — ( 2,233 )

Foreign currency translation gains — — — 1,032 — 1,032

Net loss — — — — ( 94,594 ) ( 94,594 )

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

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

Exercise of stock options 73 — 1,295 — — 1,295

3 unchanged sentences

Unrealized gain on short-term investments — — — 3,606 — 3,606

— — — 3,606 — 3,606

Foreign currency translation losses — — — ( 420 ) — ( 420 )

— — — ( 420 ) — ( 420 )

Net loss — — — — ( 222,611 ) ( 222,611 )

Balance at December 31, 2023 65,552 $ 66 $ 1,263,997 $ 1,369 $ ( 951,800 ) $ 313,632

Balance as of December 31, 2023 65,552 $ 66 $ 1,263,997 $ 1,369 $ ( 951,800 ) $ 313,632

Stock repurchases and retirement of shares ( 1,107 ) ( 1 ) ( 29,999 ) — — ( 30,000 )

( 1,107 ) ( 1 ) ( 29,999 ) — — ( 30,000 )

Exercise of stock options 112 — 2,233 — — 2,233

3 unchanged sentences

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

— — ( 15,813 ) — — ( 15,813 )

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

— — 184 — — 184

Unrealized loss on short-term investments — — — ( 311 ) — ( 311 )

— — — ( 311 ) — ( 311 )

Foreign currency translation losses — — — ( 3,005 ) — ( 3,005 )

— — — ( 3,005 ) — ( 3,005 )

Net loss — — — — ( 96,025 ) ( 96,025 )

Balance at December 31, 2024

Balance as of December 31, 2024

66,264 $ 66 $ 1,312,804 $ ( 1,947 ) $ ( 1,047,825 ) $ 263,098

Exercise of stock options 83 — 1,149 — — 1,149

Vesting of restricted stock units, net of shares withheld for taxes 1,194 1 ( 15,611 ) — — ( 15,610 )

Issuance of common stock under Employee Stock Purchase Plan 750 1 11,853 — — 11,854

Stock-based compensation expense — — 91,849 — — 91,849

Unrealized gain on short-term investments — — — 517 — 517

Unrealized loss on cash flow hedges

— — — ( 312 ) — ( 312 )

Foreign currency translation adjustments — — — 7,335 — 7,335

Net loss — — — — ( 204,710 ) ( 204,710 )

Balance as of December 31, 2025 68,291 $ 68 $ 1,402,044 $ 5,593 $ ( 1,252,535 ) $ 155,170

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

5 unchanged sentences

Operating Activities

$ ( 96,025 ) $ ( 222,611 ) $ ( 94,594 )

Net loss $ ( 204,710 ) $ ( 96,025 ) $ ( 222,611 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

2 unchanged sentences

Provision for expected credit losses 9,478 9,979 5,540

Operating lease termination and other impairment charges

2,000 14,099 7,567

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

( 2,321 ) 3,587 4,187

Losses from equity method investee

Operating lease and other impairment charges 6,697 2,000 14,099

Amortization of discount or (accretion of premium) on short-term investments ( 3,828 ) ( 2,321 ) 3,587

Loss from equity method investments 14,194 2,053 —

Stock-based compensation expense 92,381 101,383 88,076

7 unchanged sentences

Other long-term assets ( 6,888 ) 893 ( 3,187 )

Accounts payable and accrued expenses

Accounts payable

2,227 ( 2,392 ) ( 4,864 )

Accrued expenses ( 664 ) 5,550 2,537

5,550 2,537 ( 461 )

Employee-related liabilities 5,995 20,859 5,167

3 unchanged sentences

Net cash provided by (used in) operating activities ( 9,721 ) 24,225 ( 31,810 )

24,225 ( 31,810 ) 50,464

Investing Activities

2 unchanged sentences

Purchases of property and equipment ( 19,948 ) ( 19,231 ) ( 26,804 )

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

— ( 69,496 ) ( 25,720 )

Acquisition of in-process research and development ( 78,588 ) — ( 69,496 )

Purchases of equity investments, strategic investments, and intangible assets

1 unchanged sentence

Net cash provided by (used in) investing activities 72,876 ( 23,482 ) ( 85,740 )

( 23,482 ) ( 85,740 ) 33,168

Financing Activities

2 unchanged sentences

— ( 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 ) —

( 15,813 ) — —

Repurchase and retirement of common stock — ( 30,000 ) —

( 30,000 ) — —

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

( 6,730 ) 4,184 17,469

Cash used to settle withholding taxes on vested restricted stock, net of proceeds from issuance of common stock under Company stock plans ( 2,607 ) ( 6,730 ) 4,184

Other financing activities — 183 ( 71 )

Net cash provided by financing activities

8,367 4,113 16,877

Net cash provided by (used in) financing activities ( 43,367 ) 8,367 4,113

Effect of foreign exchange rate changes on cash 1,612 1,256 ( 212 )

Net increase (decrease) in cash and cash equivalents 21,400 10,366 ( 113,649 )

10,366 ( 113,649 ) 101,336

Cash and cash equivalents at beginning of period 69,234 58,868 172,517

5 unchanged sentences

Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 26,169 $ 4,370 $ —

Purchases of property and equipment included in accounts payable

Purchases of property and equipment included in accounts payable and accrued expenses $ 3,699 $ 511 $ 2,946

Intangible costs in other long-term liabilities

$ 13,300 $ — $ —

3 unchanged sentences

Organization and Basis of Presentation

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, 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.

Tandem Diabetes Care, Inc.

2 unchanged sentences

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

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

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

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

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

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.

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 most 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.

The insulin pumps are compatible with other complementary digital health offerings, such as the Company’s mobile application and cloud-based diabetes management applications.

The Company offers durable insulin pumps that are designed for years of daily use.

The Company sells single-use supplies that are used together with the pumps and are replaced every few days.

These supplies include cartridges for storing insulin, and infusion sets that contain a cannula and connect the pump to a user’s body to administer insulin.

Basis of Presentation and Principles of Consolidation

7 unchanged sentences

Translation-related adjustments are included in other comprehensive income (loss), and in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Company’s 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 consolidated statements of operations.

Foreign exchange gains or losses resulting from balances denominated in a currency other than the functional currency are recognized in interest income and other income, net in the Company’s consolidated statements of operations.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the year ended December 31, 2024, except for adding the accounting policy for equity method investments, which is included herein.

Use of Estimates

8 unchanged sentences

The Company’s short-term investments consist of Level 1 and Level 2 financial instruments in the fair value hierarchy.

The net unrealized gains or losses on available-for-sale securities that are not related to credit factors are reported as a component of other comprehensive income (loss) within the statements of operations and accumulated other comprehensive income (loss) as a separate component of stockholders’ equity on the consolidated balance sheets.

The net unrealized gains or losses on available-for-sale securities that are not related to credit factors are reported as a component of other comprehensive income (loss) within the consolidated statements of operations and as a component within accumulated other comprehensive income (loss) in stockholders’ equity on the consolidated balance sheets.

The Company determines realized gains or losses on the sale of available-for-sale securities using the specific identification method and includes net realized gains and losses as a component of other income or expense within the consolidated statements of operations.

underlying factors contributing to a decline in the prices of securities in a single asset class;

the security’s relative performance versus its peers, sector or asset class;

the market and economy in general;

views of external investment managers;

news or financial information that has been released specific to the investee;

and the outlook for the overall industry in which the investee operates.

The Company reviews its available-for-sale debt securities for credit losses quarterly, considering a variety of factors, including the significance of the decline in value as compared to the amortized cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, and the market and economy in general.

Losses on available-for-sale debt securities as a result of credit factors are recognized by recording an impairment loss as a component of other income or expense within the consolidated statements of operations and a corresponding allowance for credit losses.

The Company has not recognized any impairment losses related to its short-term investments during the years ended December 31, 2024, 2023 and 2022.

The Company did not recognize any impairment losses related to its short-term investments during the years ended December 31, 2025, 2024 and 2023.

Accounts Receivable

5 unchanged sentences

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable.

The Company maintains deposit accounts in federally insured financial institutions in excess of federally insured limits.

The Company also maintains investments in money market funds that are not federally insured.

The Company maintains deposit accounts in federally insured financial institutions in excess of federally insured limits and has investments in money market funds that are not federally insured.

Additionally, the Company has established guidelines regarding investment instruments and their maturities, which are designed to maintain preservation of principal and liquidity.

19 unchanged sentences

Property and Equipment

Property and equipment, which primarily consist of office furniture and equipment, manufacturing equipment, scientific equipment, computer equipment, and leasehold improvements, are stated at cost, less accumulated depreciation.

Property and equipment, which primarily consist of office furniture and equipment, manufacturing and scientific equipment, computer equipment and software, and leasehold improvements, are stated at cost, less accumulated depreciation.

Property and equipment are depreciated over the estimated useful lives of the assets, generally three to seven years , using the straight-line method.

7 unchanged sentences

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 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.

Landlord improvement allowances and other similar lease incentives are recorded as a reduction of the right-of-use lease 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.

Amortization of finite-lived intangible assets is recognized over their estimated useful lives using a straight-line or accelerated attribution method, depending on the economic benefit associated with the asset.

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 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.

Long-lived assets, such as property and equipment, operating lease right-of-use 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.

1 unchanged sentence

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 achieve the projections, or if the assumptions used 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 and related leasehold improvements and furniture and fixtures recognized in 2023 and 2022 (see Note 6, “Leases”), there were no impairments of long-lived assets, including acquired intangible assets, during the years ended December 31, 2024, 2023 and 2022.

Strategic Investments

The Company measures strategic investments at cost minus impairment, if any, adjusted for changes in observable prices.

Strategic investments are reviewed, on an individual basis, for impairment whenever significant events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable.

The Company held strategic equity investments totaling zero and $ 10.1 million in private investee companies at December 31, 2024 and December 31, 2023, respectively.

In November 2024, the Company invested an additional $ 46.4 million cash in one of its private company investees, resulting in a change to equity method accounting, described below.

During the year ended December 31, 2024, the Company also recorded an impairment charge of $ 2.0 million related to one of its strategic investments in a private investee company.

The Company did no t record any impairment charges related to its strategic investments during the years ended December 31, 2023 and 2022.

The strategic investments were included as a component of other long-term assets on the consolidated balance sheet.

From November 2023 to June 2024, the company held a strategic investment balance of $ 22.2 million in the form of subordinated convertible notes of one private investee company.

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

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.

The Company recognized the impairment of operating lease right-of-use assets in 2025, and the impairment of operating lease right-of-use assets and related leasehold improvements and furniture and fixtures in 2023 (see Note 6, “Leases”).

There were no other impairments of long-lived assets, including acquired intangible assets, during the years ended December 31, 2025, 2024 and 2023.

Equity Method Investments

The Company held equity method investments of $ 74.5 million at December 31, 2024.

We use the equity method to account for investments in companies if our investment provides us with the ability to exercise significant influence but not control over the operating and financial policies of the investee.

The Company assesses 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.

In November 2024, the Company invested an additional $ 46.4 million cash in one of its private company investees, resulting in a change to equity method accounting following that date.

The Company held equity method investments of $ 60.4 million and $ 74.5 million as of December 31, 2025 and December 31, 2024, respectively.

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

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

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

In November 2024, the Company invested an additional $ 46.4 million cash in one of its private investee companies that was previously accounted for as a strategic investment at cost.

As a result of the additional investment, the Company owned more than 20 % of the private investee company’s outstanding equity and held significant influence but not control over the private investee company’s activities.

As a result, the investment was accounted for using the equity method following the November 2024 transaction date.

Our consolidated net loss included our Company’s proportionate share of the net loss of our equity method investee, which was a loss of $ 2.1 for the year ended December 31, 2024.

For the years ended December 31, 2023 and 2022, the Company did not hold any equity method investments and therefore did not recognize a share of net income or loss from any equity method investments.

The Company’s consolidated net loss included its proportionate share of the net loss of its equity method investee, which was $ 14.2 million and $ 2.1 million for the years ended December 31, 2025 and 2024, respectively.

For the year ended December 31, 2023, 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 and returns.

Revenue Recognition for Arrangements with Multiple Performance Obligations

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

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

The 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.

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

The transaction price also includes an estimate of variable consideration at the time of sale.

Variable consideration includes, but is not limited to:

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

These amounts are recorded as a reduction of accounts receivable when no payment is required from the Company and as a liability when a payment is required.

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

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.

1 unchanged sentence

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

Revenue Recognition for Tandem Choice Program

In September 2022, the Company launched a 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 newest hardware platform, Tandem Mobi, once commercially available.

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

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

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

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

Consequently, the Company ceased 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.

Substantially all of the remaining deferrals were recognized at program expiration on December 31, 2024.

For the year ended December 31, 2024, the Company recognized net revenue of $ 30.2 million as a result of the Tandem Choice program.

Sales Rebates

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

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

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.

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

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, including pharmacy benefit managers and governmental or third-party commercial payors.

The terms of these programs may vary depending on the customer and contractual arrangements.

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.

Sales rebates are recorded as a reduction of revenue and are included within other current or long-term liabilities on the consolidated balance sheets, depending on the anticipated settlement period of the rebate.

Actual rebate payments may differ from estimated amounts recorded in the accompanying consolidated financial statements.

As of December 31, 2025 and 2024, total estimated sales rebates were included in the following consolidated balance sheet accounts (in thousands):

December 31, 2025 December 31, 2024

Other current liabilities $ 7,601 $ 2,229

$ 2,229 $ 505

Other long-term liabilities 4,835 7,167

1 unchanged sentence

$ 12,436 $ 9,396

Revenue Recognition for Tandem Choice Program

From September 2022 through December 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 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, at which time eligibility for Tandem Choice ended and no further deferrals were recorded.

Eligible customers who purchased a t:slim X2 insulin pump during the program period could exercise the option through December 31, 2024.

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 year ended December 31, 2024, the Company recognized net revenue of $ 30.2 million as a result of the Tandem Choice program.

For the year ended December 31, 2023, the Company deferred revenue of $ 25.1 million as a result of the Tandem Choice program.

There was no comparative adjustment to pump sales in 2025.

Sales Returns

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Actual product returns have not differed materially from estimated amounts recorded in the accompanying consolidated financial statements.

Derivative Instruments and Hedging Activities

The Company records the fair value of derivative instruments as either current assets or current liabilities on the 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.

Gains or losses on fair value hedges are recognized in earnings immediately and offset against changes in the fair value of the underlying hedged asset, liability or firm commitment.

If the Company determines that a forecasted transaction is no longer probable or no longer qualifies for hedge accounting treatment, 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

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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.

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

Returned insulin pumps may be refurbished and redeployed.

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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.

The Company may further adjust 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.

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Settlements made during the period ( 37,357 ) ( 36,632 ) ( 32,617 )

Increases (decreases) in warranty estimates

Increases in warranty estimates

2,762 1,929 ( 2,437 )

Balance at end of the period $ 55,319 $ 51,408 $ 37,173

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

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

December 31, 2025 December 31, 2024

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

The Company estimates the fair value of stock options issued under the Company’s stock incentive plans, and the fair value of 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 Company estimates 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.

The fair value of RSU awards that vest based upon predefined Company 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.

These awards vest upon the Company’s actual performance relative to predefined performance metrics and subject to the awardee’s continuous service through the respective measurement dates as defined in the award agreements.

For certain performance-based RSUs with market-based criteria, the Company used a Monte Carlo methodology to estimate the fair value at the date of grant.

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.

With respect to RSU awards with a market condition, the Company recognizes compensation expense ratably over the requisite service period under an award based on the fair market value of the award at the time of grant, regardless of whether the market condition is satisfied.

Previously recognized compensation cost would be reversed only if the employee terminated employment before completing the requisite service period.

Shipping and Handling Expenses

Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s statements of operations.

Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s consolidated statements of operations.

Amounts billed to a customer for shipping and handling are reported as revenues.

Research and Development Costs

All research and development costs are charged to expense as incurred.

All research and development costs are expensed as incurred.

Such costs include personnel-related costs, including stock-based compensation, supplies, license fees, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trial costs, milestone payments under the Company’s licensing, development and commercialization agreements, and other indirect costs.

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The Company will continue to assess the need for a valuation allowance on its deferred tax assets by evaluating both positive and negative evidence that may exist.

Any adjustment to the net deferred tax asset valuation allowance would be recorded in the consolidated statement of operations for the period that the adjustment is determined to be required.

Any adjustment to the net deferred tax asset valuation allowance would be recorded in the consolidated statements of operations for the period that the adjustment is determined to be required.

The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities.

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All components of comprehensive loss, including net loss, are reported in the consolidated financial statements in the period in which they are recognized.

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities and foreign currency translation adjustments.

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.

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

Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding, including all potentially dilutive common share equivalents.

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 years ended December 31, 2025, 2024 and 2023, there was no difference in the weighted average number of shares used to calculate basic and diluted net loss per share due to the Company’s net loss position in each period.

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

The number of common share equivalents excluded from the computation of diluted earnings per share because either the effect would have been anti-dilutive, or the performance criteria related to the units had not yet been met, are as follows (in thousands):

Year Ended December 31,

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12,173 11,436 4,986

Recently Issued Accounting Pronouncements

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

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

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

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

The Company’s adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements or disclosures.

Recently Adopted 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 Company adopted ASU 2023‑09 in the current fiscal year on a prospective basis.

The standard only impacts disclosures and did not affect the recognition or measurement of income taxes.

Adoption had no impact on the Company’s consolidated results of operations, financial position, or cash flows.

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.

Disaggregation of Income Statement Expenses (ASU 2024-03), and in January 2025, the FASB issued Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (ASU 2025-01).

ASU 2024-03 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, as clarified by ASU 2025-01, is effective for the annual reporting period beginning after December 15, 2026 and interim reporting periods within the annual reporting period beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating ASU 2024-03, as clarified by ASU 2025-01, to determine the impact it may have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06 Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which modernizes the accounting guidance for internal-use software, including website development costs.

The amendments eliminate the consideration of software development stages and introduce a new capitalization threshold based on the entity’s commitment to fund the project and the probability of completion.

ASU 2025-06 will be effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual periods.

Early adoption is permitted.

The Company is currently evaluating ASU 2025-06 to determine the impact it may have on its consolidated financial statements.

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

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

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements (ASU 2025-09).

This update is intended to better align hedge accounting with entities’ risk management strategies and simplify application.

Key provisions include allowing grouping of forecasted transactions with similar risk exposure, introducing a model for hedging variable-rate debt instruments that permit rate selection, permitting component hedging for certain nonfinancial forecasted transactions, clarifying treatment of certain compound derivatives, and restoring operability for specific dual hedge strategies.

ASU 2025-09 is effective for fiscal years beginning after December 15, 2026, including interim periods, with early adoption permitted.

The Company is currently evaluating ASU 2025-09 to determine the impact it may have on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270):

Narrow-Scope Improvements (ASU 2025-11), which clarifies and improves the guidance for interim financial reporting.

The amendments introduce a disclosure principle requiring entities to disclose events since the end of the previous annual reporting period that materially affect the entity, consolidate a comprehensive list of interim disclosure requirements within ASC 270, and provide guidance on the form and content of condensed interim financial statements.

ASU 2025-11 will be effective for interim reporting periods in fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating ASU 2025-11 to determine the impact it may have on its consolidated financial statements.

Short-Term Investments

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

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

At December 31, 2024 Amortized

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

As of December 31, 2025

Cost Gross Unrealized

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Corporate debt securities 44,082 102 ( 1 ) 44,183

Foreign government bonds

3,013 — — 3,013

Total $ 201,079 $ 963 $ ( 10 ) $ 202,032

At December 31, 2023 Amortized

As of December 31, 2024

Cost Gross Unrealized

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

Foreign government bonds

3,013 — — 3,013

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

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Years to Maturity

At December 31, 2024 Within One Year One to Two Years Two to Three Years

Estimated Fair Value

As of December 31, 2025

Within One Year One to Two Years Estimated Fair Value

United States Government-sponsored enterprises $ 40,048 $ 61,947 $ 101,995

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Corporate debt securities 35,319 8,864 44,183

Foreign government bonds

— — 3,013 3,013

Total $ 118,334 $ 83,698 $ 202,032

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 December 31, 2024 were primarily due to an increase in market interest rates after certain debt securities were purchased, and the balance was not material to the Company’s quarterly results.

The Company has classified all marketable securities as short-term investments, regardless of contractual maturity, based on the Company’s ability and intent to use any of these securities to satisfy the Company’s liquidity needs.

The Company reviews its 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.

Composition of Certain Financial Statement Items

Accounts Receivable

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

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

December 31, December 31,

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Balance at end of the period $ 8,393 $ 7,251 $ 4,898

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

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

December 31, December 31,

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Property and Equipment

Property and equipment, net consisted of the following at December 31, 2024 and 2023 (in thousands):

Property and equipment, net consisted of the following as of December 31, 2025 and 2024 (in thousands):

As of December 31,

Leasehold improvements $ 40,126 $ 37,106

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Intangible Assets Subject to Amortization

Intangible assets subject to amortization consist of technology-based intangibles related to the Company’s acquisition of Sugarmate, as well as patents purchased or licensed that are related to the Company’s commercialized products.

Intangible assets at December 31, 2024 and 2023, which were included in other long-term assets on the consolidated balance sheets, were as follows (in thousands):

On May 21, 2025, the Company and various Roche entities (collectively “Roche”) entered into a Settlement, Mutual Release and Cross-License Agreement (the “Roche Cross-License Agreement”).

The Roche Cross-License Agreement resolved all actual or potential patent disputes as of the agreement date.

Under the terms of the Roche Cross-License 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 of $ 7.0 million 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 in the second quarter of 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.

Intangible assets subject to amortization consist of the licensed patent rights obtained through the Roche settlement, technology-based intangibles acquired with Sugarmate, and patents purchased or licensed that are related to the Company’s commercialized products.

Intangible assets as of December 31, 2025 and 2024, which were included in other long-term assets on the consolidated balance sheets, were as follows (in thousands):

Intangible assets, gross amount $ 25,802 $ 12,502

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Weighted average remaining amortization period (in months) 77 6

Amortization expense related to intangible assets subject to amortization amounted to $ 1.9 million, $ 1.9 million and $ 2.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The amortization expense is recorded in selling, general and administrative expense in the consolidated statement of operations.

The estimated aggregate future amortization expense is $ 0.9 million in 2025, all of which will be recorded in selling, general and administrative expense in the consolidated statement of operations.

Amortization expense related to intangible assets subject to amortization was $ 2.5 million for the year ended December 31, 2025 and recorded in selling, general and administrative expense and cost of sales in the consolidated statements of operations.

Amortization expense related to intangible assets subject to amortization was $ 1.9 million for each of the years ended December 31, 2024 and 2023, respectively and is recorded in selling, general and administrative expense in the consolidated statements of operations.

The estimated aggregate future amortization expense is $ 2.6 million in 2026, $ 2.7 million in 2027, $ 2.3 million in 2028, $ 2.0 million in 2029, $ 1.3 million in 2030, and the remaining $ 0.7 million thereafter.

Amortization expense for intangible assets obtained through the Roche settlement will be recorded in cost of sales in the consolidated statements of operations.

Fair Value Measurements

The Company performs fair value measurements in accordance with U.S.

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.

To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of inputs:

Level 1 — observable inputs, such as quoted prices in active markets for identical assets or liabilities;

Level 2 — significant other observable inputs that are observable either directly or indirectly;

Level 3 — significant unobservable inputs for which there are little or no market data, which require the Company to develop its own assumptions.

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

Fair Value Measurements at

Fair Value Measurements as of

December 31, 2025

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$ 75,642 $ 75,642 $ — $ —

Available-for-sale securities:

United States Government-sponsored enterprises 101,995 — 101,995 —

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Corporate debt securities 44,183 — 44,183 —

Foreign government bonds

3,013 — 3,013 —

Total assets $ 277,674 $ 109,980 $ 167,694 $ —

Fair Value Measurements at

Foreign exchange forward contracts $ 312 $ — $ 312 $ —

Total liabilities $ 312 $ — $ 312 $ —

Fair Value Measurements as of

December 31, 2024

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Corporate debt securities 105,836 — 105,836 —

Foreign government bonds

3,013 — 3,013 —

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

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

There were no transfers into or out of Level 3 assets during the three months ended December 31, 2024 and 2023, respectively.

Fair Value of Financial Instruments

Short-term investments are carried at fair value.

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

The Company’s foreign currency forward contracts are designated as cash flow hedges (see Note 9 “Derivatives”) and are commitments to purchase or sell a foreign currency at a future date at a negotiated forward rate.

These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange rate.

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

Fair Value of Convertible Senior Notes

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

Fair Value Measurements as of

December 31, 2025 December 31, 2024

Convertible Senior Notes due 2025

$ 39,130 $ 271,688

Convertible Senior Notes due 2029

324,979 407,752

Total fair value of outstanding convertible senior notes

$ 324,979 $ 446,882

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

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

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.

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 non-cancellable operating leases have initial lease terms from two years to thirteen years .

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, and Phase II consisting of 38,099 rentable square feet.

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.

Future minimum payments for base rent due under Phase II of the Headquarters Lease, net of sublease rent, are estimated to be $ 2.2 million in total for 2025 through 2028, and $ 23.2 million in total for 2029 through 2035.

Operating Lease Impairment Charge

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.

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

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

Operating Lease Impairment Charges

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

Because the expected sublease income was less than the net book value of the sublease assets, the Company recorded a $ 3.6 million impairment charge in operating expenses in 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, in 2025, the Company transferred certain development activities from its Lausanne, Switzerland location to the United States.

In connection with this relocation, the Company evaluated the impact on related fixed assets and operating lease arrangements.

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 2025, comprised of operating lease impairment charges and write-offs of fixed assets consisting primarily of leasehold improvements.

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

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

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

Supplemental Lease Disclosure Information

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2025 2024 2023

Operating lease cost $ 14,276 $ 15,971 $ 18,432

Operating lease cost (excluding sublease income)

$ 17,135 $ 14,276 $ 15,971

Short-term lease cost 162 87 108

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6,697 — 11,224

Sublease income

$ ( 2,263 ) $ — $ —

Total lease cost $ 21,731 $ 14,363 $ 27,303

Maturities of operating lease liabilities at December 31, 2024 were as follows (in thousands):

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

Years Ending December 31,

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Weighted-average discount rate used to determine operating lease liabilities 5.8 % 5.3 %

Cash amounts paid included in the measurement of lease liabilities, representing operating cash flows, were as follows:

Year Ended December 31,

2024 2023 2022

Operating lease payments

17,941 13,864 11,960

Operating lease termination payments

Total cash payments

$ 17,941 $ 13,864 $ 16,729

Leases For Which Accounting Has Not Yet Commenced

As of December 31, 2024, the Phase II commencement date for the Headquarters Lease had not yet occurred.

Accordingly, the consolidated balance sheets at December 31, 2024 and December 31, 2023 did not include operating lease right-of-use assets and operating lease liabilities, and the consolidated statements of operations for the twelve months ended December 31, 2024, and 2023 did not include any lease costs related to Phase II of the Headquarters Lease.

In addition, the above disclosures of the Company’s lease costs, maturities of operating lease liabilities, weighted-average remaining lease term, and weighted-average discount rate do not include any amounts related to Phase II of the Headquarters Lease.

Cash amounts paid included in the measurement of lease liabilities, representing operating cash flows, were $ 20.2 million, $ 17.9 million, and $ 13.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Convertible Senior Notes Due 2029

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

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

As a result of the repurchase, the Company recognized a $ 1.3 million loss on extinguishment of debt in the consolidated statements of operations for the year ended December 31, 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.

The Company also 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.

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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 2029 Notes mature on March 15, 2029 unless repurchased, redeemed, or converted in accordance with their terms before 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).

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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 the capped call transactions (Capped Call Transactions) discussed below.

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 are the Company’s senior unsecured obligations.

Interest is payable in cash semi-annually in arrears beginning on November 1, 2020 at a rate of 1.50 % per year.

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

As of December 31, 2024 the outstanding balance of the 2025 Notes was classified in current liabilities on the Company’s consolidated balance sheet.

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

The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2025 Notes.

The Company has the option to redeem for cash all or any portion of the 2025 Notes on or after May 6, 2023 if the last reported sale price of the Company’s common stock has been at least 130 % of the 2025 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 2025 Notes to be redeemed, plus accrued and unpaid interest.

No sinking fund is provided for the 2025 Notes.

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

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

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

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

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

The 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 consolidated balance sheets consisted of the following (in thousands):

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$ 310,036 $ 308,266

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

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

As of December 31, 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.

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

This additional interest accrued at a rate of 0.50 % per annum on the outstanding principal amount of the Notes to approximately $ 3.3 million.

The additional accrued interest was fully paid during the fourth quarter of 2023.

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

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Convertible Senior Notes Due 2029

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.

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

The following table details interest expense related to the Notes recognized for the years ended December 31, 2024, and 2023 (in thousands):

The following table details interest expense related to the Notes recognized for the years ended months ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

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Total interest expense $ 6,808 $ 7,067 $ 9,368

(1) Contractual interest expense for the year ended December 31, 2023 included $ 3.3 million of additional interest as discussed above.

(1) Contractual interest expense for the year ended December 31, 2023 included $ 3.3 million of additional interest.

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

This additional interest accrued at a rate of 0.50 % per annum on the outstanding principal amount of the Notes to approximately $ 3.3 million.

The additional accrued interest was fully paid during the fourth quarter of 2023.

2029 Capped Call Transactions

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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 $ 42.01 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 are 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 is 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 is initially $ 173.18 per share of the Company’s common stock, and is 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 on March 5, 2024 to terminate a portion of the existing 2025 Capped Call Transactions in a notional amount corresponding to the amount of 2025 Notes repurchased (the Unwind Transactions).

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

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

For accounting purposes, each of the capped call transactions described above are separate transactions, and not part of the terms of the 2029 Notes or the 2025 Notes.

As these transactions met certain criteria under the applicable accounting guidance, each of the capped call transactions were recorded in stockholders’ equity and were not accounted for as derivatives.

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

Promissory Note Payable

In connection with the acquisition of Capillary Biomedical, Inc.

(see Note 12, “Acquisitions”), the Company assumed a $ 4.7 million promissory note payable.

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 December 31, 2024 and 2023, the loan balance of $ 4.8 million and $ 4.7 million, respectively, was included as a component of other long-term liabilities on the consolidated balance sheets.

As of December 31, 2025 and 2024, the loan balance, including accrued interest, was $ 4.9 million and $ 4.8 million, respectively, and was included as a component of other current liabilities on the consolidated balance sheets.

Stockholders’ Equity

Shares Reserved for Future Issuance

The following shares of the Company's common stock were reserved for future issuance at December 31, 2024 (in thousands):

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

Shares reserved for issuance upon conversion of Convertible Senior Notes 9,151

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Common Stock Warrants

Warrants outstanding to purchase shares of the Company's common stock as of December 31, 2024 were as follows:

Warrants outstanding to purchase shares of the Company's common stock as of December 31, 2025 are equity-classified and were as follows:

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

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

Stock Incentive Plans

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

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

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

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

Stock Options

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Stock options have an exercise price equal to the closing price of the Company's common stock on the applicable award date.

Stock options granted before 2022 generally vested over a four-year period as to 25 % of the underlying shares on the first anniversary of the grant date, with the balance of the options vesting monthly over the following three years .

Stock options granted in 2022 and thereafter vest over a three-year period as to 33 % of the underlying shares on the first anniversary of the grant date, with the balance of the options vesting monthly over the following two years .

The Company did not grant any stock options in the periods presented.

The following table summarizes stock option activities under the Company’s stock incentive plans:

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Value (in thousands)

Outstanding at December 31, 2021 4,814,846 $ 57.08 7.07 $ 452,081

Granted 83,008 $ 65.28

Outstanding as of December 31, 2022

4,442,313 $ 57.95 6.12 $ 30,236

Exercised ( 72,536 ) $ 17.86 $ 1,400

Canceled/forfeited/expired ( 473,773 ) $ 90.14 $ 95

Outstanding at December 31, 2022 4,442,313 $ 57.95 6.12 $ 30,236

Granted — $ —

Outstanding as of December 31, 2023

3,896,004 $ 54.79 5.30 $ 11,703

Exercised ( 112,171 ) $ 19.90 $ 2,483

Canceled/forfeited/expired ( 257,277 ) $ 85.51 $ —

Outstanding at December 31, 2023 3,896,004 $ 54.79 5.30 $ 11,703

Granted — $ —

Outstanding as of December 31, 2024

3,526,556 $ 53.65 4.32 $ 16,147

Exercised ( 83,425 ) $ 13.77 $ 940

Canceled/forfeited/expired ( 654,144 ) $ 62.79 $ 31

Outstanding at December 31, 2024 3,526,556 $ 53.65 4.32 $ 16,147

Vested and expected to vest at December 31, 2024 3,525,815 $ 53.65 4.32 $ 16,147

Exercisable at December 31, 2024 3,496,909 $ 53.44 4.30 $ 16,147

Outstanding as of December 31, 2025

2,788,987 $ 52.70 3.41 $ 3,452

Vested and expected to vest as of December 31, 2025

2,788,987 $ 52.70 3.41 $ 3,452

Exercisable as of December 31, 2025

2,788,987 $ 52.70 3.41 $ 3,452

Restricted Stock Units

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RSUs granted before March 2022 generally vest over a four-year period based on continuous service as to 25 % of the underlying shares on the first anniversary of the award, with the balance of the RSUs vesting quarterly over the following three years .

RSUs granted in March 2022 and thereafter generally vest over a three-year period based on continuous service to the Company as to 33 % of the underlying shares on the first anniversary of the award, with the balance of the RSUs vesting quarterly over the following two years .

In addition, the Company granted 151,660 , 110,074 and 53,662 performance-based RSUs during the years ended December 31, 2024, 2023 and 2022, respectively, of which 151,660 , 92,308 and 48,139 units remained outstanding at December 31, 2024.

The Company estimated the fair value of performance-based RSUs at the date of grant using the closing price of the Company’s common stock on the date of grant, and the probability that the specified performance metrics of the performance-based RSU would be met.

For certain performance-based RSUs with market-based criteria, the Company used a Monte Carlo methodology to estimate the fair value at the date of grant.

RSUs granted after March 2022 generally vest over a three-year period based on continuous service to the Company as to 33 % of the underlying shares on the first anniversary of the award, with the balance of the RSUs vesting quarterly over the following two years .

In addition, the Company granted 297,456 , 151,660 and 110,074 performance-based RSUs during the years ended December 31, 2025, 2024 and 2023, respectively, of which 297,456 , 151,660 , and 92,308 units remained outstanding as of December 31, 2025.

The following table summarizes RSU activities, which includes performance-based RSUs, for the Company’s stock incentive plans:

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(in thousands)

Unvested awards outstanding at December 31, 2021

Unvested awards outstanding as of December 31, 2022

1,833,832 $ 72.57 $ 82,431

2 unchanged sentences

Canceled/forfeited ( 282,425 ) $ 59.17

Unvested awards outstanding at December 31, 2022

Unvested awards outstanding as of December 31, 2023

3,176,159 $ 40.61 $ 93,951

2 unchanged sentences

Canceled/forfeited ( 294,533 ) $ 41.05

Unvested awards outstanding at December 31, 2023

Unvested awards outstanding as of December 31, 2024

3,738,770 $ 42.17 $ 134,670

2 unchanged sentences

Canceled/forfeited ( 584,350 ) $ 34.25

Unvested awards outstanding at December 31, 2024

Unvested awards outstanding as of December 31, 2025

3,656,289 $ 28.33 $ 77,900

Awards expected to vest at December 31, 2024

Awards expected to vest as of December 31, 2025

3,501,145 $ 28.36 $ 74,551

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Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan (ESPP) was approved by the Board in October 2013.

The ESPP enables eligible employees to purchase shares of the Company’s common stock using their after-tax payroll deductions, subject to certain conditions.

The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code.

Eligible employees may contribute, through payroll deductions, up to 15 % of their earnings for the purchase of common stock under the ESPP.

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(a) 85 % of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85 % of the fair market value of a share of the Company’s common stock on the date of purchase.

Generally, offerings under the ESPP consist of a two-year offering period with four six-month purchase periods which begin in May and November of each year.

During the years ended December 31, 2025, 2024 and 2023, 749,971 , 770,362 and 499,431 shares of our common stock, respectively, were purchased under the ESPP for proceeds of $ 11.9 million, $ 12.2 million and $ 10.7 million, respectively.

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Total stock-based compensation expense $ 92,381 $ 101,383 $ 88,076

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

At December 31, 2024, the total unamortized stock-based compensation expense of approximately $ 121.0 million will be recognized over the remaining weighted average vesting term of approximately 1.9 years.

The Company estimates the fair value of stock options using the Black-Scholes option pricing model on the grant date.

No stock options were granted in 2024 or 2023.

For the year ended December 31, 2022, the Company’s assumptions used in the Black-Scholes model were as follows:

weighted average grant date fair value of $ 42.16 per share, risk-free interest rate of 2.7 %, dividend yield of 0.0 %, expected volatility of 72.0 %, and expected term of 5.8 years.

The total stock-based compensation expense capitalized as part of the cost of the Company’s inventories was $ 1.2 million and $ 1.8 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, the total unamortized stock-based compensation expense of approximately $ 78.3 million will be recognized over the remaining weighted average vesting term of approximately 1.7 years.

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:

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Under this approach, the weighted-average expected term is presumed to be the average of the vesting term and the contractual term of the option.

The Company estimates the expected term of the ESPP using expected life for each tranche during the two-year offering period.

The Company also estimates forfeitures at the time of grant, and revises those estimates in subsequent periods if actual forfeitures differ from its estimates.

Historical data was used to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

Due to the global nature of the Company’s operations, a portion of its 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, Canadian dollars and Swiss francs (CHF).

As of December 31, 2025, the Company’s outstanding foreign currency forward contracts settle within nine 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 cash flow effects of our derivative contracts in the 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 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 $ 68.2 million as of December 31, 2025.

The Company did no t have any forward contracts outstanding as of December 31, 2024.

The Company recorded an unrealized loss on foreign currency forward contracts of $ 0.3 million for the year ended December 31, 2025.

The following table summarizes the effect of foreign currency forward contracts designated as hedging instruments in our consolidated statements of operations (in thousands):

December 31, 2025

Net Gains (Losses) Reclassified from AOCI into Operating Income

Designated cash flow hedges:

Revenue $ ( 614 )

Operating expense $ ( 60 )

The Company did not enter into any foreign currency forward contracts that qualified for hedge accounting in 2024 and 2023, 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 years ended December 31, 2024 and 2023.

Employee Benefits

Defined Contribution Plans

The Company has defined contribution plans for its employees.

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.

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

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

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

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.

The total cost recognized by the Company for the 401(k) plan was $ 4.9 million, $ 4.6 million and $ 4.2 million, respectively, for the years ended December 31, 2025, 2024 and 2023.

The Company’s contributions for its defined contribution plans for employees outside the United States were not material for each of the years ended December 31, 2024, 2023 and 2022 .

The income (loss) before provision for income taxes for the Company’s operations was as follows (in thousands):

The Company’s contributions for its defined contribution plans for employees internationally were not material for each of the years ended December 31, 2025, 2024 and 2023.

The loss before provision for income taxes for the Company’s operations was as follows (in thousands):

Year Ended December 31,

2 unchanged sentences

Foreign 26,686 ( 13,714 ) ( 84,843 )

Income (loss) before provision for income taxes $ ( 91,870 ) $ ( 220,254 ) $ ( 92,852 )

Loss before provision for income taxes

$ ( 200,272 ) $ ( 91,870 ) $ ( 220,254 )

The components of income tax expense were as follows (in thousands):

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Total current tax expense

4,438 4,155 2,357

Federal — — —

2 unchanged sentences

Income tax expense $ 4,438 $ 4,155 $ 2,357

$ 4,155 $ 2,357 $ 1,742

The expense for income taxes reconciles to the amount computed by applying the federal statutory rate to loss before taxes as follows (in thousands):

Year Ended December 31, 2025

Income tax benefit at federal statutory rate (1)

$ ( 42,057 ) 21.00 %

Income tax expense (benefit) at federal statutory rate (1)

State income tax, net of federal benefit (2)

( 1,038 ) 0.52 %

Foreign tax effects

Foreign rate differential

( 3,041 ) 1.52 %

Changes in valuation allowance

( 7,037 ) 3.51 %

Other tax effects

166 ( 0.08 ) %

Other foreign jurisdictions

( 1,722 ) 0.86 %

Effect of changes in tax laws or rates enacted in the current period

Effect of cross-border tax laws

Subpart F income inclusion

348 ( 0.17 ) %

Research and development credits

( 10,370 ) 5.18 %

Foreign tax credits

( 2,667 ) 1.33 %

Changes in valuation allowance

54,580 ( 27.25 ) %

Nontaxable or nondeductible items

Non-deductible stock-based compensation

3,952 ( 1.97 ) %

Other non-deductible and non-taxable

( 103 ) 0.05 %

Stock-based compensation - (windfall) shortfall

11,542 ( 5.76 ) %

Net impact on liquidation of foreign subsidiary

( 17,262 ) 8.62 %

1,850 ( 0.94 ) %

Changes in unrecognized tax benefits

17,297 ( 8.64 ) %

Income tax expense

$ 4,438 ( 2.22 ) %

Year Ended December 31,

Income tax benefit at federal statutory rate (1)

$ ( 19,293 ) $ ( 46,253 )

State income tax, net of federal benefit ( 1,444 ) ( 1,313 )

Convertible debt leg-out

Warrants revaluation — — ( 31 )

Convertible debt repurchase transaction

Research and development credits ( 7,865 ) ( 6,283 )

3 unchanged sentences

Recognition of acquired deferred tax assets

— ( 5,048 ) —

Acquired IPR&D expenses — 14,938

6 unchanged sentences

$ 4,155 $ 2,357

(1) For the years ended December 31, 2024, 2023 and 2022, the federal statutory tax rate was 21%.

Significant components of the Company’s net deferred income tax assets at December 31, 2024 and 2023 are shown in the table below (in thousands).

(1) For the years ended December 31, 2025, 2024 and 2023, the U.S.

federal statutory tax rate was 21%.

(2) The state of California comprises greater than 50% of our state tax benefit.

The amounts of cash income taxes paid, net of refunds received, by the Company are as follows:

Year Ended December 31,

Other foreign

Total cash paid in income taxes, net of refunds received

Significant components of the Company’s net deferred income tax assets as of December 31, 2025 and 2024 are shown in the table below (in thousands).

The Company assesses all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

1 unchanged sentence

Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth.

On the basis of this analysis, a valuation allowance of $ 210.4 million and $ 190.7 million at December 31, 2024 and 2023, respectively, was recorded to offset the net deferred tax asset as realization of such asset is uncertain.

On the basis of this analysis, a valuation allowance of $ 270.3 million and $ 210.4 million as of December 31, 2025 and 2024, respectively, was recorded to offset the net deferred tax asset as realization of such asset is uncertain.

However, the amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as the Company’s projections for future growth.

6 unchanged sentences

Warranty reserve

13,096 12,222

Intangible assets

Other 13,771 8,610

1 unchanged sentence

Deferred tax liabilities:

( 4,185 ) ( 5,485 )

Operating lease right-of-use assets ( 22,887 ) ( 19,792 )

Fixed assets ( 5,485 ) ( 6,916 )

Other — ( 218 )

3 unchanged sentences

As of December 31, 2025, the Company had accumulated federal and state NOL carryforwards of approximately $ 379.0 million, and $ 349.3 million, respectively.

Of the total federal net operating loss carryforwards, approximately $ 13.2 million were generated after January 1, 2018, and therefore do not expire.

NOL generated after January 1, 2018, is subject to 80% limitation in accordance with the Tax Cuts and Jobs Act of 2017.

The remaining federal net operating loss carryforwards of $ 83.2 million will begin to expire in 2033, and state tax loss carryforwards continue to expire.

The remaining California NOL carryforwards of $ 182.4 million will begin expiring in 2029.

The Company had approximately $ 43.3 million of foreign tax loss carryforwards as of December 31, 2024.

The foreign tax loss carryforwards begin to expire in 2025, unless previously utilized.

The Company also has federal and California research credit carryforwards of approximately $ 30.7 million and $ 29.3 million, respectively, as of December 31, 2024.

The federal research credit carryforwards will begin expiring in 2040, unless previously utilized.

The California research credit will carry forward indefinitely.

Utilization of the Company's net operating loss and research credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions.

The annual limitations may result in the expiration of net operating loss carryforwards before utilization.

The Company has completed analyses through December 31, 2023 to determine whether its net operating losses and credits are likely to be limited by Section 382.

Based on this study, the Company determined that an ownership change, as defined under Section 382, occurred in 2018 and the resulting limitation significantly reduced the Company’s ability to utilize its net operating loss and credit carryovers before they expire.

As a result, in 2019 the Company reduced its deferred tax assets for the net operating loss and research credit carryforwards that were projected to expire unused with a corresponding offset to the valuation allowance recorded against such assets.

Additionally, future ownership changes under Section 382 may also limit the Company's ability to fully utilize any remaining tax benefits.

In 2022, as part of the Capillary Biomedical, Inc.

transaction, the Company acquired deferred tax assets consisting of federal and state net operation loss carryovers, research tax credit carryovers, and other tax attributes of approximately $ 7.8 million.

These deferred tax assets are subject to limitations on future use under Section 382 and some of the attributes may expire unused.

The Company completed an analysis under Section 382.

As a result, the Company recognized deferred tax assets, net of contra reserve, of approximately $ 5.0 million in 2023.

The Company included these deferred tax assets in its components of deferred tax assets in the table above, to the extent that such deferred tax assets are available for future utilization, and the balances are fully offset by valuation allowance as of December 31, 2024 and 2023.

Out of the total federal NOL carryforwards, approximately $ 295.3 million were generated after January 1, 2018, and therefore do not expire.

NOLs generated after January 1, 2018, are subject to 80% limitation in accordance with the Tax Cuts and Jobs Act of 2017.

The remaining federal NOL carryforwards of $ 83.7 million will begin to expire in 2034, and state NOL carryforwards continue to expire.

The California NOL carryforwards of $ 200.5 million will begin expiring in 2029.

The Company had approximately $ 34.3 million of international carryforwards as of December 31, 2025, which begin to expire in 2030.

The Company also has federal and California research and development credit carryforwards of approximately $ 41.0 million and $ 38.4 million, respectively, as of December 31, 2025.

The federal research and development credit carryforwards will begin expiring in 2040, unless previously utilized.

The California research and development credit will carry forward indefinitely.

Use of the Company's NOL and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions.

The annual limitations may result in the expiration of NOL carryforwards before utilization.

The Company has completed an analysis through December 31, 2024 to determine whether its NOLs and credits are likely to be limited by Section 382.

The Company is currently in a loss position for the year ended December 31, 2025 and will continue monitoring future ownership changes under Section 382.

Additionally, ownership changes occurring after December 31, 2025 and future years may also limit the Company’s ability to fully utilize any remaining tax benefits.

The evaluation of uncertainty in a tax position is a two-step process.

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Gross unrecognized tax benefits at the end of the year $ 68,139 $ 27,474 $ 21,527

As of December 31, 2024 and December 31, 2023, the Company had $ 24.9 million and $ 19.2 million of unrecognized tax benefits, respectively, that, if recognized and realized would impact the effective tax rate, subject to the valuation allowance.

As of December 31, 2025 and 2024, the Company had $ 39.8 million and $ 24.9 million of unrecognized tax benefits, respectively, that, if recognized and realized would impact the effective tax rate, subject to the valuation allowance.

The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense.

The Company had no accrual for interest and penalties on the Company’s consolidated balance sheets and has not recognized interest and penalties in the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022.

The Company does not expect any significant increases or decreases, other than the potential reduction as a result of the Section 382 limitation, to its unrecognized tax benefits within the next 12 months.

The Company had no material accrual for interest and penalties on the Company’s consolidated balance sheets and the amount of interest and penalties recognized in the consolidated statements of operations were not material for the years ended December 31, 2025, 2024 and 2023.

The Company is subject to taxation in the United States and various foreign and state jurisdictions.

Before 2018, the losses were all attributable to the United States.

Prior to 2018, the losses were all attributable to the United States.

The Company’s tax years from 2006 (inception) are subject to examination by the United States and state authorities due to the carry forward of unutilized NOLs and research and development credits.

In 2021 the OECD announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%.

Subsequently multiple sets of administrative guidance have been issued.

Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024, including the European Union Member States, with the adoption of additional components in later years or announced their plans to enact legislation in future years.

We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.

Undistributed earnings of the foreign subsidiaries are indefinitely reinvested.

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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 consolidated statement of operations and comprehensive loss for the years ended December 31, 2024, 2023, and 2022.

There were no significant segment expenses that are regularly provided to the CODM other than those reported in the Company’s consolidated statement of operations and comprehensive loss for the years ended December 31, 2024, 2023, and 2022.

Segment net income (loss) was consistent with the net loss amounts reported in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023.

There were no significant segment expenses that are regularly provided to the CODM other than those reported in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023.

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 consolidated balance sheets for December 31, 2024 and 2023, respectively.

Disaggregation of Revenue

Segment revenues were consistent with revenue reported in the Company’s consolidated statement of operations and comprehensive loss for the years ended December 31, 2024, 2023, and 2022.

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.

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

Disaggregation of Sales

Segment revenues were consistent with revenue reported in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, 2024 and 2023.

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

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 years ended December 31, 2024, 2023 and 2022, no individual country outside the United States generated revenue that represented more than 10% of total revenue.

Sales by Geographic Region and Customer Sales Channel

During the years ended December 31, 2025, 2024 and 2023, no individual country internationally 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):

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United States $ 706,936 $ 672,685 $ 554,878

Outside the United States 267,518 192,840 212,452

International

307,800 267,518 192,840

Total Sales $ 1,014,736 $ 940,203 $ 747,718

Revenues by Product

Sales by Product

During the years ended December 31, 2025, 2024 and 2023, sales by product were as follows (in thousands):

4 unchanged sentences

550,597 475,785 406,983

Net revenue recognized (deferred) for Tandem Choice program

Net sales recognized (deferred) for Tandem Choice program

— 30,249 ( 25,107 )

1 unchanged sentence

Sales to distributors accounted for 63 %, 61 %, and 64 % of the Company’s total United States sales for the years ended December 31, 2025, 2024 and 2023, respectively.

Sales to distributors accounted for 96 %, 99 %, and 96 % of the Company’s total sales outside the United States for the years ended December 31, 2024, 2023 and 2022, respectively.

AMF Medical Acquisition

On December 10, 2022, the Company entered into a Share Purchase Agreement (Purchase Agreement) to acquire all of the registered shares of AMF Medical (Original Transaction).

Sales from the pharmacy channel accounted for 4 % of the Company’s total United States sales for the year ended December 31, 2025.

There were no sales from the pharmacy channel for the years ended December 31, 2024 and 2023.

Sales to distributors accounted for the vast majority of the Company’s total international sales for the years ended December 31, 2025, 2024 and 2023, respectively.

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 December 31, 2025.

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

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

The contingent consideration was to be recognized as each contingency was resolved and the respective consideration was paid or became payable.

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

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

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

The Company agreed to pay CHF 40 million in January 2025 and a final payment of CHF 28 million in October 2025.

All other payments outlined in the Original Transaction were removed based on the revised agreement.

The amounts due to be paid were recorded as a short-term accrued liability in the first quarter of 2025.

Capillary Biomedical Acquisition

On July 21, 2022, the Company acquired Capillary Biomedical, Inc.

(Capillary Biomedical), an infusion set developer, for total cash consideration of $ 24.7 million, and the assumption of $ 4.7 million of long-term debt (see Note 7, “Debt”).

Capillary Biomedical’s extended-wear infusion set technology is currently in development and is not yet commercially available.

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

The total aggregate consideration for the Original Transaction included a previous strategic investment of CHF 8.0 million made in 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 $ 31.0 million charge in 2022 representing the value of acquired in-process research and development assets with no alternative future use, and acquisition related expenses, on its consolidated statements of operations in acquired in-process research and development expenses.

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 consolidated statements of operations in acquired in-process research and development expenses (IPR&D).

In January 2025, the Company entered into an amended agreement that removed contingent liabilities included in the Original Transaction.

Under the revised term, the Company agreed to pay CHF 68.0 million, consisting of a CHF 40.0 million ($ 43.5 million USD) payment made in January 2025 and a final payment of CHF 28.0 million ($ 35.1 million USD) made in October 2025.

All other payment obligations under the Original Transaction were removed.

The total consideration of CHF 68.0 million ($ 75.2 million USD) was recognized as acquired IPR&D in the Company’s consolidated statements of operations and comprehensive loss in the first quarter of 2025.

In addition, the Company recognized $ 3.4 million of foreign exchange losses in total other income (expense), net during the fourth quarter of 2025.

Commitments and Contingencies

Legal and Regulatory Matters

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

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

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

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

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

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

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

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

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

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

In December 2023, F.

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

and Tandem Diabetes Care Europe B.V.

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

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

1 970 677 B1 (the ‘677 patent).

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

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

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

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

The action seeks unspecified monetary damages and other relief.

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

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

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

From time to time, the Company is involved in various 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 December 31, 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.

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Cancellation of outstanding purchase orders is generally allowed under the standard terms of our purchase order agreements, but may require payment of costs incurred through the date of cancellation.

At December 31, 2024, obligations under our purchase agreements totaled approximately $ 197.1 million, of which approximately $ 192.7 million is scheduled to be received and become payable within one-year.

As of December 31, 2025, obligations under our purchase agreements totaled approximately $ 365.4 million, of which approximately $ 267.7 million is scheduled to be received and become payable within one-year with the remainder due in the year thereafter.

Fourth Quarter Financial Data (Unaudited)

6 unchanged sentences

Operating expenses $ 159,166 $ 158,036

Operating loss

Operating income (loss)

$ 8,294 $ ( 581 )

9 unchanged sentences

68,014 66,157

(1) The Company recognized revenue of $ 30.2 million and deferred revenue of $ 25.1 million for the quarters ended December 31, 2024 and 2023, respectively, as a result of the Tandem Choice program (see Note 2, “Summary of Significant Accounting Policies”) .

(2) For the quarter ended December 31, 2024, the Company recognized charges to cost of sales of $ 0.6 million for Tandem Choice fulfillments in 2024, with no corresponding charge in 2023.

(1) The Company recognized revenue of $ 30.2 million for the quarter ended December 31, 2024, as a result of the Tandem Choice program (see Note 2, “Summary of Significant Accounting Policies”).

There was no comparative adjustment to sales for the quarter ended December 31, 2025.

(2) For the quarter ended December 31, 2024, the Company recognized charges to cost of sales of $ 0.6 million for Tandem Choice fulfillments in 2024.

There was no comparative adjustment to cost of sales for the quarter ended December 31, 2025.

The numerator and denominator of the basic and diluted net income per share computations are calculated as follows for the three months ended December 31, 2024 (in thousands).

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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 7A. Quantitative and Qualitative Disclosures About Market Risk