TANDEM DIABETES CARE INC 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis together with our financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (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. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Quarterly Report, other than statements of historical fact, are forward-looking statements. You can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue” or the negative of such terms, or other comparable terminology. 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, cybersecurity threats, macroeconomic pressures or uncertainties 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. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Our forward-looking statements are based on our management’s current assumptions and expectations about future events and trends, which affect or may affect our business, strategy, operations or financial performance. Although we believe that these forward-looking statements are based upon reasonable assumptions, they are subject to numerous known and unknown risks and uncertainties and are made in light of information currently available to us. Our actual financial condition and results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below in the section entitled “Risk Factors” in this Quarterly Report, as well as in the other public filings we make with the Securities and Exchange Commission. You should read this Quarterly Report with the understanding that our actual future financial condition and results may be materially different from and worse than what we expect. Moreover, we operate in an evolving environment. 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 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. Overview 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. 22 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, 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. 23 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 Our financial condition and operating results have historically fluctuated on a quarterly or annual basis. We expect periodic fluctuations will continue based on a number of trends and uncertainties, including the following: Regulatory Approvals and Actions • Sales of new products are subject to local government regulations. 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 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. Any action by regulatory bodies against us, and any regulatory challenges we encounter, could have a negative impact on our product sales and harm our reputation. Markets, Seasonality, Competition, and Product Launches • We expect our business to be impacted by the introduction of new diabetes devices and treatments by us or our competitors. 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 benefit in insurance plans used by our customers and the customers of our distributors. In the United States, we typically experience a higher volume of pump shipments in the second half of the year due to the nature of these reimbursement dynamics. As we expand our access through the pharmacy benefit with no upfront reimbursement for an insulin pump, we anticipate there will be less of a seasonal impact on the business in future periods related to insurance deductibles and coinsurance requirements. Other factors that may impact sales across the year include the timing of winter, summer and other seasonal holidays, particularly in our international markets. • Regulatory approval and/or upcoming launches of other new Tandem or competing products could also adversely impact timing of purchasing decisions. • In periods following new product launches, particularly with new hardware platforms, our cost of sales may increase on a per unit basis until the new products achieve manufacturing scale and operating expenses may be elevated by increased sales and marketing spending to support the product launches. Reimbursement • 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 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. 24 Macroeconomic Factors • Global economic and market uncertainty, such as recessionary concerns, changes in discretionary spending and increased interest rates have impacted our customers’ purchasing decisions and the buying patterns of our distributors. • High inflation, fluctuations in foreign currency valuations, uncertainty regarding tariffs and trade relations, and the effects of other macroeconomic factors and concerns have disrupted and may continue to disrupt our relationships with suppliers, third-party manufacturers, healthcare providers, distributors and our existing or potential customers, as well as impact our cost structure as more of our business is exposed to foreign currency fluctuations. Components of Results of Operations Sales We offer products for people with insulin-dependent diabetes, including a portfolio of hardware platforms, single-use insulin cartridges and infusion sets, data management platforms and mobile applications. 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. See also “Trends and Uncertainties Impacting Financial Results — Markets, Seasonality, Competition, and Product Launches” above. Cost of Sales Cost of sales primarily consists of raw materials, labor costs, manufacturing overhead expenses, reserves for expected warranty costs, product training costs, royalties, and freight. Manufacturing overhead expenses include expenses relating to quality assurance, manufacturing engineering, material procurement, inventory control, facilities, equipment, information technology and operations supervision and management. When taking into consideration the differences in reimbursement levels and cost structure, pumps have 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 Our selling, general and administrative (SG&A) expenses primarily consist of salary, cash-based incentive compensation, fringe benefits and non-cash stock-based compensation for our sales, marketing and administrative functions, which also includes our clinical, customer support, technical services, insurance verification and regulatory affairs personnel. Our sales territories in the United States are generally maintained by sales representatives and field clinical specialists, and supported by managed care liaisons, additional sales management and other customer support personnel. 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. Research and Development Our research and development (R&D) activities primarily consist of engineering and research programs associated with our hardware, software and digital health products under development, as well as activities associated with our core technologies and processes. R&D expenses are primarily related to employee compensation, including salary, cash-based incentive compensation, fringe benefits and non-cash stock-based compensation. We also incur R&D expenses for supplies, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trials, payments under our licensing, development and commercialization agreements and other indirect costs. 25 Acquired In-process Research and Development (IPR&D) Acquired IPR&D reflects costs of external research and development projects acquired directly in a transaction other than a business combination, which do not have an alternative future use. Other Income and Expense, Net Other income and expense primarily consist of interest earned on our cash equivalents and short-term investments, income or loss from equity method investments, foreign currency transaction gains and losses and interest expense which includes the amortization of debt issuance costs related to our convertible senior notes. Income Tax Expense (Benefit) 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 March 31, (in thousands, except percentages) 2026 2025 Sales: United States $ 160,843 $ 150,632 International 86,378 83,790 Total sales 247,221 234,422 Cost of sales 110,433 116,015 Gross profit 136,788 118,407 Gross margin 55 % 51 % Operating expenses: Selling, general and administrative 108,187 113,853 Research and development 46,035 50,215 Acquired in-process research and development expenses — 75,217 Total operating expenses 154,222 239,285 Operating loss (17,434) (120,878) Other income (expense), net: Interest income and other income, net 3,626 4,193 Interest expense (2,204) (1,862) Loss from equity method investments (3,865) (3,542) Total other income (expense), net (2,443) (1,211) Loss before income taxes (19,877) (122,089) Income tax expense 516 8,467 Net loss $ (20,393) $ (130,556) Comparison of the Three Months Ended March 31, 2026 and 2025 Sales 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. 26 Sales by product in the United States were as follows (in thousands): Three Months Ended March 31, 2026 2025 Pump $ 77,941 $ 72,141 Supplies and other 82,902 78,491 Total Sales in the United States $ 160,843 $ 150,632 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 March 31, 2026 2025 Pump $ 32,485 $ 29,950 Supplies and other 53,893 53,840 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 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 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. 27 Selling, General and Administrative Expenses. 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 March 31, 2026 2025 Selling, general and administrative $ 108,187 $ 104,966 Non-recurring facility impairment costs — 6,697 Restructuring costs — 2,190 Total SG&A expenses $ 108,187 $ 113,853 Research and Development Expenses . 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 March 31, 2026 2025 Research and development 46,035 47,935 Restructuring costs — 2,280 Total R&D expenses $ 46,035 $ 50,215 Acquired In-Process Research and Development (IPR&D) Expenses. 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 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 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. 28 Liquidity and Capital Resources As of March 31, 2026, we had $570.3 million in cash and cash equivalents and short-term investments. We believe that our cash and cash equivalents, short-term investments, and future cash flows from operations will be sufficient to fund our ongoing core business activities for at least the next twelve months. Our historical cash outflows have primarily been associated with cash used for operating activities such as research and development activities, sales, marketing and commercialization of our products worldwide, expansion of clinical and customer support organizations, the acquisition of intellectual property, equity investments and asset acquisitions, capital expenditures and debt service costs. Historically, our principal sources of cash have included cash collected from product sales, private and public offerings of equity securities, exercises of employee stock awards and debt financing. We expect to rely 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 three months ended March 31, 2026 and 2025 (in thousands): Three Months Ended March 31, 2026 2025 Net cash provided by (used in): Operating activities $ 11,054 $ (18,278) Investing activities (195,448) 9,186 Financing activities 274,161 (4,688) Effect of foreign exchange rate changes on cash (1,076) (1,880) Net increase (decrease) in cash and cash equivalents $ 88,691 $ (15,660) Operating Activities . 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 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 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 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; 29 • the timing of any additional financings, and the net proceeds raised from such financings; • the timing and amount of proceeds from the issuance of equity awards pursuant to employee stock plans; • fluctuations in costs, gross and operating margins; and • fluctuations in working capital, including changes in accounts receivable, inventories, accounts payable, employee-related liabilities, and operating lease liabilities. Both our primary short-term and long-term capital needs are expected to include expenditures related to: • support of our commercialization efforts related to our current and future products; • expansion of our commercial resources for our growing installed customer base; • research and product development efforts, including clinical trial costs; • acquisitions, including strategic investments, equity method investments and future contingent payments associated with acquisitions; • leasing or licensing of equipment, technology, intellectual property and other assets; • additional facilities leases and related tenant improvements; • investments for the development, improvement and acquisition of manufacturing, testing and packaging equipment to support business growth and increase capacity; • payments under licensing, development and commercialization agreements; and • integration costs related to acquisitions of businesses, products and technologies. 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. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements and accompanying notes as of the date of the financial statements. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about our financial condition and results of operations that are not readily apparent from other sources. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. There have been no material changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies Involving Management Estimates and Assumptions,” included in our Annual Report on Form 10-K for the year ended December 31, 2025. 30