What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-06 · 114 added, 176 removed, 142 unchanged (67% of the section changed)

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

You should read the following discussion and analysis together with our financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (Quarterly Report).

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

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

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

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

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New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Forward-looking statements speak only as of the date they were made and, except to the extent required by law or the rules of the Nasdaq Global Market, we undertake no obligation to update or review any forward-looking statement because of new information, future events or other factors.

Forward-looking statements speak only as of the date they were made and we undertake no obligation to update or review any forward-looking statement because of new information, future events or other factors.

We qualify all of our forward-looking statements by these cautionary statements.

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

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

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

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

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

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

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

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

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

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

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

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

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

This allows their insulin pump to receive CGM sensor readings, which can then be used in our AID algorithms, including our Control-IQ+ technology.

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

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

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

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

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

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

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

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

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

Tandem Diabetes Care is a global leader in insulin delivery and diabetes technology, specializing in the design, development, and commercialization of advanced solutions that reduce the burden of diabetes management.

We serve nearly 500,000 people living with diabetes in more than 25 countries worldwide.

Our strategy is to offer flexibility and choice in intelligent insulin delivery systems through an accessible portfolio of market-leading pumps, applications and insights.

In support of this strategy, our Tandem pump platforms include t:slim X2 and Tandem Mobi (Mobi), both of which feature Control-IQ+ advanced hybrid closed-loop technology.

We develop our automated insulin delivery (AID) systems and related technology solutions using a consumer-focused approach.

This has resulted in a differentiated device portfolio that provides users with the distinct features and functionality they seek and in a manner that makes the features usable and intuitive.

We launched our flagship t:slim pump platform in August 2012, and its next generation, the t:slim X2, in October 2016.

The t:slim X2 insulin pump is an all-in-one system that features a slim, sleek, user-friendly color touchscreen and holds up to 300 units of insulin.

In 2024, we expanded our portfolio with the commercial availability of Mobi in the United States, starting with iOS control, followed by Android control in March 2026.

Mobi is designed for people who seek even greater discretion and flexibility, and includes features such as expanded pump-control from a mobile application, inductive charging, and an on-pump button that can be used for bolusing and other actions.

Our insulin pumps offer the option to detach in addition to Bluetooth connectivity and are typically used as part of an AID system.

When used as an AID system, our insulin pumps are integrated with a CGM and powered by our Control-IQ+ technology.

Results from four independent pivotal studies using Control-IQ technology have been published in the New England Journal of Medicine since 2019.

Control-IQ+ launched in 2025 and is our third and newest AID algorithm, which is available globally and indicated for people ages 2+ (type 1).

In the United States, it is also indicated for use in pregnancy complicated by type 1 diabetes as well as people 18+ living with type 2 diabetes.

This hybrid closed loop algorithm increases a user's time in targeted glycemic range (70-180 mg/dL) by predicting and helping to prevent the frequency and/or duration of hyperglycemic and/or hypoglycemic events.

It is the only predictive algorithm featuring AutoBolus corrective bolusing.

Control-IQ+ also offers an easy set-up feature and settings for sleep and exercise activities that adjust the algorithm parameters to better match the different physiological needs during these activities.

In addition, in the first quarter of 2026 we offered users the choice of integrating with multiple CGM sensors, such as such as the Dexcom G6 and G7, and the Abbott FreeStyle Libre 2 Plus and FreeStyle Libre 3 Plus.

As part of our ecosystem of diabetes solutions, we also offer a web-based data management platform, Tandem Source, that provides users, their caregivers and their healthcare providers with a fast, easy and visual way to display diabetes therapy management data from our pumps and integrated CGMs.

Tandem Source also provides us with data that we can analyze to reveal patterns, trends, outcomes and associations that can be used for product development and in the analysis of clinical outcomes data.

Our Strategy & Future Technology

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

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

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

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

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

Pump Reimbursement Cycle

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

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

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

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

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

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

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

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

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

Our strategy is to redefine global leadership in insulin delivery solutions through commercial excellence, patient-first reimbursement choices, and a differentiated device portfolio.

We strive to offer all people with insulin-dependent diabetes flexibility and choice in their intelligent insulin delivery systems, through our portfolio of market-leading pumps, applications, and insights that improve outcomes and reduce the daily burden of living with diabetes.

In support of this strategy, we continue to drive innovation in our Tandem pump platforms.

This includes a novel, extended-wear infusion site option for Mobi that will transform the pump into a tubeless patch device.

In addition, our pipeline also includes a next-generation Mobi patch pump that leverages the technology acquired with the Sigi Patch Pump to deliver further miniaturization.

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

Third-Party Reimbursement

In the United States, we are pursuing a multi-channel coverage and reimbursement strategy, enhancing coverage and reimbursement through both the durable medical equipment (“DME”) and pharmacy channels.

We believe this strategy will improve access and optimize the potential for better medical outcomes for people living with diabetes, while reducing the overall economic burden of diabetes care.

This also provides our customers with flexibility in how they use their insurance benefits to simplify onboarding and provide them with the most advantageous reimbursement terms.

Through the medical benefit, pumps were historically reimbursed upfront, separate from the ongoing supply purchases.

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

This would eliminate the upfront pump reimbursement.

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

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

Internationally, insurance reimbursement processes vary by geography.

In markets where we have direct operations, we are responsible for all reimbursement, tender application and fulfillment activities.

Otherwise, that responsibility lies with our distributors.

Trends and Uncertainties Impacting Financial Results

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

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

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

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

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

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

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

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

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

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

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

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

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

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Reimbursement

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

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

Historically, our products have been offered through a medical benefit.

Pumps are generally reimbursed upfront, separate from the ongoing supply purchases.

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

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

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

Our pharmacy contracts are structured as pay-as-you-go with reimbursement only for the ongoing supply purchases at a price premium to the DME model.

Under this model, in the first quarter of 2026, we began experiencing a decrease in sales and gross profit when pumps are shipped.

As pharmacy utilization scales, we expect the decrease in sales from pump shipments to be offset by an increase in supply sales and gross profit from both our existing installed base and increased volumes.

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

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

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

Macroeconomic Factors

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

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

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

Our sales may fluctuate from period to period.

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

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

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

The accounting treatment for Tandem Choice was complex (see Note 2, “Summary of Significant Accounting Policies”).

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

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

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

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

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

Cost of Sales

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

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

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

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

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

Under the a pay-as-you-go model through the pharmacy benefit in the U.S., our overall gross profit and gross margin percentage may be negatively impacted when pumps are shipped during the initial stages of this new model, but may be partially or fully offset by the anticipated benefit from higher profits for our recurring sale of supplies.

Selling, General and Administrative

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

Litigation and Settlement Expense

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

Research and Development

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Income Tax Expense (Benefit)

Due to the valuation allowance on domestic and foreign deferred tax assets, the Company's domestic and foreign tax provisions consist of cash tax expense incurred in each of the jurisdictions in which the Company operates.

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

Results of Operations

Three Months Ended

September 30, Nine Months Ended September 30,

(in thousands, except percentages) 2026 2025

United States $ 160,843 $ 150,632

Outside the United States 73,622 72,321 227,881 199,433

International

86,378 83,790

Total sales 247,221 234,422

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Selling, general and administrative 108,187 113,853

Litigation and settlement expense

Research and development 46,035 50,215

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Interest income and other income, net

2,509 5,344 6,070 13,482

Interest expense (2,204) (1,862)

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(3,865) (3,542)

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

Total other income (expense), net (2,443) (1,211)

Loss before income taxes (19,877) (122,089)

Income tax expense (benefit)

(3,978) 637 (833) 4,894

Income tax expense

Net loss $ (20,393) $ (130,556)

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

For the three months ended September 30, 2025, we shipped approximately 30,000 pumps worldwide.

Sales were $249.3 million, which included $73.6 million of sales outside the United States.

Sales were $244.0 million for the three months ended September 30, 2024, which included $72.3 million of sales outside the United States.

Comparison of the Three Months Ended March 31, 2026 and 2025

For the three months ended March 31, 2026, we shipped more than 29,000 pumps worldwide.

Sales were $247.2 million, which included $86.4 million of international sales.

Sales were $234.4 million for the three months ended March 31, 2025, which included $83.8 million of international sales.

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

Three Months Ended

September 30,

Pump $ 77,941 $ 72,141

Supplies and other 82,902 78,491

Net revenue recognized for Tandem Choice program — 1,039

Total Sales in the United States $ 160,843 $ 150,632

For the third quarter of 2025, sales in the United States increased primarily due to improved average selling prices across all products, partially offset by a slight decrease in pump shipments.

Pump shipments were more than 20,000 in the third quarter of 2025 compared to nearly 21,000 pumps for the third quarter of 2024.

Sales in the third quarter of 2024 included $1.0 million in incremental sales from Tandem Choice fulfillments, for which there was no comparable adjustment in 2025.

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

For the first quarter 2026, sales in the United States increased primarily due to an increase in pump shipments and improved average selling prices for supply sales.

Pump shipments were more than 19,000 pumps in the first quarter 2026 compared to more than 17,000 pumps for the first quarter 2025.

Sales within the pharmacy channel accounted for 6% of sales in the United States for the first quarter 2026.

Sales within the pharmacy channel were not material for the first quarter 2025.

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

Three Months Ended

September 30,

Pump $ 32,485 $ 29,950

Supplies and other 53,893 53,840

Total Sales Outside the United States $ 73,622 $ 72,321

For the third quarter of 2025, total sales outside the United States increased primarily due to favorable changes in foreign exchange rates and higher supply volumes, partially offset by lower pump volumes.

Pump shipments decreased to more than 9,000 pumps for the third quarter of 2025 compared to nearly 11,000 pumps for the third quarter of 2024.

The decrease in pump shipments was attributable to distributor destocking in anticipation of the initiation of direct sales activities in select countries, expected to begin in the first quarter of 2026.

Cost of Sales and Gross Profit

Our cost of sales for the three months ended September 30, 2025 was $115.0 million, resulting in gross profit of $134.3 million, compared to cost of sales of $119.3 million and gross profit of $124.7 million for the same period in 2024.

The gross margins for the three-month periods ended September 30, 2025 and 2024 were 54% and 51%, respectively.

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

Operating Expenses

Our operating expenses for the three months ended September 30, 2025 were $157.2 million, compared to $150.7 million for the three months ended September 30, 2024.

Selling, General and Administrative Expenses.

SG&A expenses were $108.4 million for the three months ended September 30, 2025, compared to $99.6 million for the same period in 2024.

Expenses increased $9.1 million from commercial investments in the sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe and initiatives to create future efficiencies in operations, as well as $2.0 million in restructuring costs.

The increase was partially offset by a $2.3 million decrease in stock-based compensation expense.

Research and Development Expenses .

R&D expenses were $48.7 million for the three months ended September 30, 2025, compared to $51.1 million for the same period in 2024.

The decrease in R&D expenses was primarily due to a $2.4 million decrease in stock-based compensation expense and $0.5 million decrease in other employee benefits and expenses, partially offset by $0.8 million in restructuring costs.

Other Income (Expense), Net

Total other income (expense), net for the three months ended September 30, 2025 was a loss of $2.3 million, compared to income of $3.5 million for the same period in 2024.

Other expense, net for the three months ended September 30, 2025 primarily consisted of a $2.7 million loss on equity investment, $2.1 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, and $0.7 million of realized losses on foreign currency transactions.

This was partially offset by $3.2 million of interest income earned on our cash equivalents and short-term investments.

Other income, net for the three months ended September 30, 2024 was income of $3.5 million, primarily consisting of $5.6 million of interest income earned on our cash equivalents and short-term investments, partially offset by $1.9 million of interest expense which included the amortization of debt issuance costs.

Income Tax Expense (Benefit)

We recognized income tax benefit of $4.0 million on a pre-tax loss of $25.1 million for the three months ended September 30, 2025, compared to income tax expense of $0.6 million on a pre-tax loss of $22.6 million for the three months ended September 30, 2024.

Income tax benefit for the three months ended September 30, 2025, was due to a reduction in domestic cash tax expense as a result of the passage of the One Big Beautiful Bill Act (“OBBBA”) in July 2025.

The OBBBA included various provisions with multiple effective dates, including, but not limited to, immediate expensing of domestic research and development expenditures.

The impacts of the OBBBA are reflected in our results for the quarter ended September 30, 2025.

Additionally, certain foreign cash tax expenses were reduced in the current period.

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

Comparison of the Nine Months Ended September 30, 2025 and 2024

For the nine months ended September 30, 2025, we shipped more than 88,000 pumps worldwide.

Sales were $724.4 million, which included $227.9 million of sales outside the United States.

Sales were $657.6 million for the nine months ended September 30, 2024, which included $199.4 million of sales outside the United States.

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

Nine Months Ended

September 30,

Pump $ 242,393 $ 230,187

Supplies and other 254,079 227,888

Net revenue recognized for Tandem Choice program

Total Sales in the United States $ 496,472 $ 458,122

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

Pumps shipments were approximately 59,000 in the nine months ended September 30, 2025.

For the nine months ended September 30, 2024, there was a negligible net impact to our revenues as a result of Tandem Choice.

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

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

Nine Months Ended

September 30,

Pump $ 81,683 $ 79,774

Supplies and other 146,198 119,659

Total Sales Outside the United States $ 227,881 $ 199,433

For the nine months ended September 30, 2025, pump sales increased due to a year-over-year increase in average selling prices and favorable changes in foreign currency exchange rates.

Pump shipments were approximately 30,000 in the nine months ended September 30, 2025.

For the nine months ended September 30, 2025, pump-related supply sales increased due to a year-over-year increase in volumes shipped, improved average selling prices and favorable changes in foreign currency exchange rates.

Total International Sales

$ 86,378 $ 83,790

For the first quarter 2026, total international sales increased primarily due to favorable changes in foreign exchange rates and improved average selling prices, partially offset by lower pump and supply volumes.

International sales for the first quarter 2026 also increased due to a one-time benefit for transitioning to rental customers from distributors in Switzerland.

Pump shipments were more than 10,000 pumps for the first quarter 2026 compared to more than 11,000 pumps for the first quarter 2025.

The decrease in pump shipments was attributable to distributor destocking in anticipation of our initiation of direct sales activities in select countries, which began in the first quarter of 2026.

Sales to distributors accounted for 89% of international sales in the first quarter of 2026 and 96% of international sales in the first quarter of 2025.

Cost of Sales and Gross Profit

Our cost of sales for the nine months ended September 30, 2025 was $345.8 million , resulting in gross profit of $378.6 million, compared to cost of sales of $325.4 million and gross profit of $332.1 million for the same period in 2024.

The gross margins for the nine months ended September 30, 2025 and 2024 were 52% and 51%, respectively.

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

Our cost of sales for the three months ended March 31, 2026 was $110.4 million, resulting in gross profit of $136.8 million, compared to cost of sales of $116.0 million and gross profit of $118.4 million for the same period in 2025.

The gross margins for the three-month periods ended March 31, 2026 and 2025 were 55% and 51%, respectively.

This increase in gross margin was primarily driven by improved average selling prices,as well as favorable impact from product mix, foreign currency and lower material costs.

Operating Expenses

Our operating expenses for the nine months ended September 30, 2025 were $574.1 million, compared to $430.7 million for the nine months ended September 30, 2024.

The $143.4 million increase was primarily driven by a $75.2 million charge to IPR&D in connection with the revised AMF purchase agreement (see Note 13, “Acquisitions”), a $20.0 million litigation and settlement expense, costs related to our international and domestic sales force expansions, and certain operating lease impairment and restructuring charges recognized during 2025.

Our operating expenses for the three months ended March 31, 2026 were $154.2 million, compared to $239.3 million for the three months ended March 31, 2025.

The decrease was primarily driven by a reduction of one-time charges incurred in the first quarter 2025 including $75.2 million in IPR&D charges (see Note 13, “Acquisitions”) and $11.2 million in operating lease impairment charges and restructuring charges related to relocation of certain research and development activities.

Additionally, operating expenses decreased due to a reduction of stock-based compensation expense.

Selling, General and Administrative Expenses.

SG&A expenses, including one-time charges for non-recurring facility impairment costs of $6.7 million and restructuring costs of $4.2 million, were $331.9 million for the nine months ended September 30, 2025, compared to $284.0 million for the same period in 2024.

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

Nine Months Ended September 30, 2025

SG&A expenses were $108.2 million for the three months ended March 31, 2026, compared to $113.9 million for the same period in 2025.

The decrease in SG&A expenses was primarily driven by a reduction of one-time charges incurred in the first quarter 2025, including $6.7 million of non-recurring facility impairment costs and $2.2 million of restructuring costs.

These decreases were partially offset by a $9.5 million increase from commercial investments in our sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe, and initiatives to create future efficiencies.

Additionally, stock-based compensation expense decreased by $6.3 million.

Three Months Ended

Selling, general and administrative

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$ 108,187 $ 113,853

Litigation and Settlement Expense.

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

We did not incur any litigation and settlement expenses for the nine months ended September 30, 2024.

Research and Development Expenses .

R&D expenses were $147.0 million for the nine months ended September 30, 2025, compared to $146.7 million for the same period in 2024.

The current period includes $3.1 million of non-recurring restructuring costs.

Excluding these costs, the decrease was primarily due to lower stock-based compensation expense of $1.9 million.

Nine Months Ended September 30, 2025

R&D expenses were $46.0 million for the three months ended March 31, 2026, compared to $50.2 million for the same period in 2025.

The decrease in R&D expenses was primarily driven by a reduction of one-time charges of $2.3 million for non-recurring restructuring costs incurred in the first quarter 2025.

Additionally, stock-based compensation expense decreased by $3.2 million.

The decrease in R&D expenses was partially offset by an increase in clinical trial expense.

Three Months Ended

Research and development

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

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

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

We did not incur any IPR&D expenses for the three months ended March 31, 2026.

Acquired IPR&D expenses were $75.2 million for the three months ended March 31, 2025, which represented costs associated with the revised AMF purchase agreement (see Note 13, “Acquisitions”).

Other Income (Expense), Net

Total other income (expense), net for the nine months ended September 30, 2025 was a $9.4 million loss, compared to a net income of $6.7 million for the same period in 2024.

Other expense, net for the nine months ended September 30, 2025 primarily consisted of $9.6 million loss on equity investment, $5.8 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, and $5.0 million realized loss from foreign currency transactions, offset by $11.1 million of interest income earned on our cash equivalents and short-term investments.

Other income, net for the nine months ended September 30, 2024 primarily consisted of $16.7 million of interest income earned on our cash equivalents and short-term investments, partially offset by $5.6 million of interest expense which included the amortization of debt issuance costs.

Total other income (expense), net for the three months ended March 31, 2026 was a loss of $2.4 million, compared to $1.2 million for the same period in 2025.

Other income (expense), net for the three months ended March 31, 2026 primarily consisted of a $3.9 million loss on equity investment, $2.2 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes.

This was partially offset by $3.6 million of interest income earned on our cash equivalents and short-term investments.

Other expense, net for the three months ended March 31, 2025 primarily consisted of $3.5 million loss on equity investment and $1.9 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, offset by $4.2 million of interest income earned on our cash equivalents and short-term investments.

Income Tax Expense (Benefit)

We recognized income tax benefit of $0.8 million on a pre-tax loss of $205.0 million for the nine months ended September 30, 2025, compared to income tax expense of $4.9 million on a pre-tax loss of $91.9 million for the nine months ended September 30, 2024.

Income tax benefit for the nine months ended September 30, 2025 was due to a reduction in domestic cash tax expense as a result of the passage of the OBBBA legislation in July 2025.

The OBBBA included various provisions with multiple effective dates, including, but not limited to, immediate expensing of domestic research and development expenditures.

The impacts of the OBBBA are reflected in our results for the nine months ended September 30, 2025.

Additionally, certain foreign cash tax expenses were reduced in the current period.

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

We recognized income tax expense of $0.5 million on a pre-tax loss of $19.9 million for the three months ended March 31, 2026, compared to income tax expense of $8.5 million on a pre-tax loss of $122.1 million for the three months ended March 31, 2025.

Income tax expense for the three months ended March 31, 2026, was primarily attributable to state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

Liquidity and Capital Resources

At September 30, 2025, we had $319.1 million in cash and cash equivalents and short-term investments.

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

As of March 31, 2026, we had $570.3 million in cash and cash equivalents and short-term investments.

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

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

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

Nine Months Ended September 30,

The following table shows a summary of our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Net cash provided by (used in):

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Operating Activities .

Net cash used in operating activities was $19.5 million for the nine months ended September 30, 2025, compared to $13.5 million cash provided in the same period in 2024.

For the nine months ended September 30, 2025, net loss was $204.1 million, net non-cash adjustments were $184.1 million, and the change in working capital balances was an increase of $0.5 million.

For the nine months ended September 30, 2024, net loss was $96.8 million, net non-cash adjustments were $98.8 million and the change in working capital balances was an increase of $11.5 million.

Net cash provided by operating activities was $11.1 million for the three months ended March 31, 2026, compared to $18.3 million of cash used in the same period in 2025.

For the three months ended March 31, 2026, net loss was $20.4 million, net non-cash adjustments were $27.8 million, and the change in working capital balances was an increase of $3.7 million.

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

Investing Activities .

Net cash provided by investing activities was $87.9 million for the nine months ended September 30, 2025, which primarily consisted of $200.6 million in proceeds from maturities and redemptions of short-term investments, offset by $56.0 million in purchases of short-term investments, $43.5 million paid for IPR&D, and $13.3 million in purchases of property and equipment.

Net cash used in investing activities was $28.5 million for the nine months ended September 30, 2024, which primarily consisted of $251.4 million of purchases of short-term investments, and $16.2 million in purchases of property and equipment, offset by $239.0 million in proceeds from maturities and redemptions of short-term investments.

Net cash used in investing activities was $195.4 million for the three months ended March 31, 2026, which primarily consisted of $216.1 million in purchases of short-term investments, and $6.3 million in purchases of property and equipment, partially offset by $27.0 million in proceeds from maturities and redemptions of short-term investment.

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

Financing Activities.

Net cash used in financing activities was $46.0 million for the nine months ended September 30, 2025, which consisted of $40.8 million used to pay the principal portion of the 2025 Notes and payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period.

Net cash provided by financing activities was $6.1 million for the nine months ended September 30, 2024, which primarily consisted of net proceeds of $306.9 million from the issuance of the 2029 Notes which was partially offset by $246.1 million used in the repurchase of 2025 Notes, $30.0 million used in the repurchase and retirement of common stock and $15.8 million used to purchase Capped Call Options related to the 2029 Notes.

Net cash provided by financing activities was $274.2 million for the three months ended March 31, 2026, which consisted of net proceeds of $291.2 million from the issuance of the 2032 Notes, partially offset by $15.3 million used to pay the cost of the capped call transactions related to the 2032 Notes.

In addition, $1.7 million was used in payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period.

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

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

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

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

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

• contractual debt obligations, including periodic interest payments;

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• integration costs related to acquisitions of businesses, products and technologies.

Critical Accounting Policies

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S.

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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-Q

Item 2. Management’s Discussion and Analysis