TANDEM DIABETES CARE INC 10-Q

Item 1. Financial Statements. TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) June 30, December 31, 2026 2025 Assets (Unaudited) (Note 1) Current assets: Cash and cash equivalents $ 62,818 $ 90,634 Short-term investments 393,178 202,032 Accounts receivable, net 162,065 165,491 Inventories 135,106 128,769 Prepaid and other current assets 51,472 31,217 Total current assets 804,639 618,143 Property and equipment, net 84,501 83,580 Operating lease right-of-use assets 100,185 96,172 Equity method investment 132,271 60,351 Other long-term assets 32,606 22,866 Total assets $ 1,154,202 $ 881,112 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 64,130 $ 47,067 Accrued expenses 25,539 21,012 Employee-related liabilities 53,261 70,409 Operating lease liabilities 20,265 19,472 Deferred revenue 8,430 9,527 Other current liabilities 81,380 75,237 Total current liabilities 253,005 242,724 Convertible senior notes, net - long-term 602,577 310,036 Operating lease liabilities - long-term 116,411 114,967 Deferred revenue - long-term 7,776 8,474 Other long-term liabilities 44,045 49,741 Total liabilities 1,023,814 725,942 Commitments and contingencies (Note 14) — — Stockholders’ equity: Common stock, $ 0.001 par value; 200,000 shares authorized, 69,540 and 68,291 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 70 68 Additional paid-in capital 1,418,011 1,402,044 Accumulated other comprehensive income 6,403 5,593 Accumulated deficit ( 1,294,096 ) ( 1,252,535 ) Total stockholders’ equity 130,388 155,170 Total liabilities and stockholders’ equity $ 1,154,202 $ 881,112 See accompanying notes to unaudited condensed consolidated financial statements. 1 TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Sales $ 254,560 $ 240,678 $ 501,781 $ 475,100 Cost of sales 109,780 114,823 220,213 230,838 Gross profit 144,780 125,855 281,568 244,262 Operating expenses: Selling, general and administrative 111,642 109,596 219,829 223,449 Research and development 46,930 48,118 92,965 98,333 Acquired in-process research and development expenses — — — 75,217 Litigation and settlement expense — 19,951 — 19,951 Total operating expenses 158,572 177,665 312,794 416,950 Operating loss ( 13,792 ) ( 51,810 ) ( 31,226 ) ( 172,688 ) Other income (expense), net: Interest income and other income, net 1,225 ( 632 ) 4,851 3,561 Interest expense ( 2,450 ) ( 1,905 ) ( 4,654 ) ( 3,767 ) Loss from equity method investment ( 5,641 ) ( 3,375 ) ( 9,506 ) ( 6,917 ) Total other income (expense), net ( 6,866 ) ( 5,912 ) ( 9,309 ) ( 7,123 ) Loss before income taxes ( 20,658 ) ( 57,722 ) ( 40,535 ) ( 179,811 ) Income tax expense (benefit) 510 ( 5,322 ) 1,026 3,145 Net loss $ ( 21,168 ) $ ( 52,400 ) $ ( 41,561 ) $ ( 182,956 ) Other comprehensive income (loss): Unrealized gain (loss) on short-term investments $ ( 692 ) $ ( 98 ) $ ( 1,719 ) $ 325 Unrealized gain (loss) on cash flow hedges 716 ( 612 ) 2,418 ( 612 ) Foreign currency translation gains 1,335 4,380 111 5,979 Comprehensive loss $ ( 19,809 ) $ ( 48,730 ) $ ( 40,751 ) $ ( 177,264 ) Net loss per share - basic and diluted $ ( 0.31 ) $ ( 0.78 ) $ ( 0.60 ) $ ( 2.74 ) Weighted average shares used to compute basic and diluted net loss per share 69,011 67,050 68,706 66,729 See accompanying notes to unaudited condensed consolidated financial statements. 2 TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands) Three Months Ended June 30, 2026 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at March 31, 2026 68,504 $ 69 $ 1,400,218 $ 5,044 $ ( 1,272,928 ) $ 132,403 Exercise of stock options 2 — 29 — — 29 Vesting of restricted stock units, net of shares withheld for taxes 493 — ( 3,769 ) — — ( 3,769 ) Issuance of common stock for Employee Stock Purchase Plan 541 1 5,893 — — 5,894 Stock-based compensation expense — — 15,640 — — 15,640 Unrealized loss on short-term investments — — — ( 692 ) — ( 692 ) Unrealized gain on cash flow hedges — — — 716 — 716 Foreign currency translation gains — — — 1,335 — 1,335 Net loss — — — — ( 21,168 ) ( 21,168 ) Balance at June 30, 2026 69,540 $ 70 $ 1,418,011 $ 6,403 $ ( 1,294,096 ) $ 130,388 Six Months Ended June 30, 2026 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2025 68,291 $ 68 $ 1,402,044 $ 5,593 $ ( 1,252,535 ) $ 155,170 Exercise of stock options 43 — 739 — — 739 Vesting of restricted stock units, net of shares withheld for taxes 665 1 ( 6,176 ) — — ( 6,175 ) Issuance of common stock under Employee Stock Purchase Plan 541 1 5,893 — — 5,894 Stock-based compensation expense — — 30,811 — — 30,811 Purchase of capped call options related to convertible notes due 2029 — — ( 15,300 ) — — ( 15,300 ) Unrealized loss on short-term investments — — — ( 1,719 ) — ( 1,719 ) Unrealized gain on cash flow hedges — — — 2,418 — 2,418 Foreign currency translation gains — — — 111 — 111 Net loss — — — — ( 41,561 ) ( 41,561 ) Balance at June 30, 2026 69,540 $ 70 $ 1,418,011 $ 6,403 $ ( 1,294,096 ) $ 130,388 See accompanying notes to unaudited condensed consolidated financial statements. 3 Three Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at March 31, 2025 66,568 $ 67 $ 1,333,531 $ 75 $ ( 1,178,381 ) $ 155,292 Exercise of stock options 10 — 171 — — 171 Vesting of restricted stock units, net of shares withheld for taxes 502 1 ( 6,320 ) — — ( 6,319 ) Issuance of common stock for Employee Stock Purchase Plan 451 — 7,194 — — 7,194 Stock-based compensation expense — — 25,675 — — 25,675 Unrealized loss on short-term investments — — — ( 98 ) — ( 98 ) Unrealized loss on cash flow hedges — — — ( 612 ) — ( 612 ) Foreign currency translation gains — — — 4,380 — 4,380 Net loss — — — — ( 52,400 ) ( 52,400 ) Balance at June 30, 2025 67,531 $ 68 $ 1,360,251 $ 3,745 $ ( 1,230,781 ) $ 133,283 See accompanying notes to unaudited condensed consolidated financial statements. Six Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 66,264 $ 66 $ 1,312,804 $ ( 1,947 ) $ ( 1,047,825 ) $ 263,098 Exercise of stock options 53 — 871 — — 871 Vesting of restricted stock units, net of shares withheld for taxes 763 1 ( 11,708 ) — — ( 11,707 ) Issuance of common stock under Employee Stock Purchase Plan 451 1 7,194 — — 7,195 Stock-based compensation expense — — 51,090 — — 51,090 Unrealized gain on short-term investments — — — 325 — 325 Unrealized loss on cash flow hedges — — — ( 612 ) — ( 612 ) Foreign currency translation gains — — — 5,979 — 5,979 Net loss — — — — ( 182,956 ) ( 182,956 ) Balance at June 30, 2025 67,531 $ 68 $ 1,360,251 $ 3,745 $ ( 1,230,781 ) $ 133,283 See accompanying notes to unaudited condensed consolidated financial statements. 4 TANDEM DIABETES CARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Six Months Ended June 30, 2026 2025 Operating Activities Net loss $ ( 41,561 ) $ ( 182,956 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization expense 8,974 8,678 Amortization of debt issuance costs 1,384 970 Provision for expected credit losses 5,358 3,577 Operating lease and other impairment charges — 6,697 Amortization of discount or (accretion of premium) on short-term investments ( 1,821 ) ( 1,780 ) Loss from equity method investment 9,506 6,917 Stock-based compensation expense 31,400 51,130 Acquired in-process research and development expenses — 75,217 Other 1,005 424 Changes in operating assets and liabilities: Accounts receivable, net ( 3,082 ) ( 13,516 ) Inventories ( 8,564 ) 12,058 Prepaid and other current assets ( 18,502 ) ( 2,348 ) Other long-term assets ( 11,134 ) 3,524 Accounts payable 23,500 5,739 Employee-related liabilities ( 17,072 ) ( 12,649 ) Deferred revenue ( 3,782 ) ( 2,710 ) Operating leases and other current liabilities 4,095 8,403 Other long-term liabilities ( 3,280 ) 4,851 Net cash used in operating activities ( 23,576 ) ( 27,774 ) Investing Activities Purchases of short-term investments ( 260,512 ) ( 26,496 ) Proceeds from maturities and redemptions of short-term investments 69,473 146,447 Purchases of property and equipment ( 10,318 ) ( 9,171 ) Acquisition of in-process research and development — ( 43,464 ) Purchases of equity investments, strategic investments, and intangible assets ( 81,427 ) — Net cash provided by (used in) investing activities ( 282,784 ) 67,316 Financing Activities Proceeds from issuance of convertible senior notes due 2032, net of $ 8,843 debt issuance costs 291,157 — Principal payments on convertible senior notes due 2025 — ( 40,760 ) Payment for capped call transactions related to convertible senior notes due 2032 ( 15,300 ) — Cash used to settle withholding taxes on vested restricted stock, net of proceeds from issuance of common stock under Company stock plans 458 ( 3,641 ) Net cash provided by (used in) financing activities 276,315 ( 44,401 ) Effect of foreign exchange rate changes on cash 2,229 ( 263 ) Net decrease in cash and cash equivalents ( 27,816 ) ( 5,122 ) Cash and cash equivalents at beginning of period 90,634 69,234 Cash and cash equivalents at end of period $ 62,818 $ 64,112 Supplemental disclosures of cash flow information Income taxes (refunded) paid $ ( 1,758 ) $ 4,892 Supplemental schedule of non-cash investing and financing activities Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 10,224 $ — Purchases of property and equipment included in accounts payable and accrued expenses $ 1,851 $ 1,073 Intangible costs in other long-term liabilities $ 13,300 $ 13,300 See accompanying notes to unaudited condensed consolidated financial statements. 5 TANDEM DIABETES CARE, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Basis of Presentation The Company Tandem Diabetes Care, Inc. is 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. is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc., together with its wholly-owned subsidiaries. The Company’s 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, the Company’s pump platforms include t:slim X2 and Tandem Mobi (Mobi). Both pumps feature Control-IQ+ technology, which is the Company’s most advanced algorithm for managing insulin delivery, using information received from compatible 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’s insulin pumps are durable medical devices designed for multiple years of daily use. In addition, the Company sells disposable supplies used in conjunction with the pumps, which are replaced periodically. 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 The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation. Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s). These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (Annual Report), from which the condensed consolidated balance sheet presented as of December 31, 2025 herein was derived. The condensed consolidated financial statements include the accounts of Tandem Diabetes Care, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The functional currency of each of the Company’s foreign subsidiaries is its respective local currency. The Company translates the financial statements of its foreign subsidiaries into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses. Translation-related adjustments are included in other comprehensive income (loss) in the condensed consolidated statements of operations, and in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Company’s condensed consolidated balance sheets. Foreign exchange gains or losses resulting from balances denominated in a currency other than the functional currency are recognized in interest income and other income, net in the Company’s condensed consolidated statements of operations. 2. Summary of Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2026, as compared to those disclosed in the Annual Report. 6 Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes as of the date of the condensed consolidated financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Accounts Receivable The Company grants credit to various customers in the ordinary course of business and is paid directly by customers who use its products, distributors and third-party insurance payors. The Company maintains an allowance for its current estimate of expected credit losses. Provisions for expected credit losses are estimated based on historical experience, assessment of specific customer-related risks, review of outstanding invoices, forecasts about the future, and various other assumptions and estimates that are believed to be reasonable under the circumstances, including the impact of broader macroeconomic conditions such as changes in credit risk, discretionary spending, and interest rates. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. Operating Lease Right-of-Use Assets and Liabilities Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized when the Company takes possession of the leased property (the Commencement Date) based on the present value of lease payments over the lease term. For lease agreements that contain lease and non-lease components, the Company accounts for both of those components as a single lease component. Rent expense on noncancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning on the Commencement Date. The difference between rent expense and rent paid is accounted for as a component of operating lease right-of-use assets on the Company’s condensed consolidated balance sheets. Landlord improvement allowances and other similar lease incentives are recorded as a reduction of the right-of-use 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 using a straight-line or accelerated attribution method, depending on the economic benefit associated with the asset. In the second quarter 2025, the Company and various Roche entities (collectively, Roche) entered into a Settlement, Mutual Release and Cross-License Agreement (the Settlement Agreement). The Settlement Agreement resolved all actual or potential patent disputes as of the agreement date, including the actions pending before courts of the Unified Patent Court in France and Germany. Under the terms of the Settlement Agreement, the Company agreed to pay Roche $ 36.0 million over a four-year period, with an initial cash payment of $ 8.0 million and four equal annual installments thereafter. Based on a relative fair value approach, $ 13.3 million was capitalized as an intangible asset for the value of the license, which is being amortized over seven years , reflecting the estimated useful life of the acquired patents. The remaining consideration was expensed as settlement and litigation expense with related legal fees during the second quarter 2025. The Company paid its second annual payment of $ 7.0 million during the second quarter 2026. 7 Impairment of Long-Lived Assets 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. Fair value is determined using unobservable (Level 3) inputs (see Note 5 “Fair Value Measurements”), including discounted cash flow models, future estimated sublease income, and third-party independent appraisals, as considered necessary. There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not meet or exceed projected performance, or if the assumptions used in the model change in the future, the Company may be required to recognize additional impairment charges in future periods. The Company recognized the impairment of operating lease right-of-use assets in the first quarter of 2025 (see Note 6, “Leases”). There were no other impairments of long-lived assets, including acquired intangible assets, during the three and six months ended June 30, 2026 and 2025. Equity Method Investment The Company uses the equity method to account for investments in companies if it owns more than 20% of the investee company’s outstanding equity or the investment provides the Company with the ability to exercise significant influence but not control over the operating and financial policies of the investee. The Company assesses whether it has significant influence by considering various factors, including the nature and magnitude of the investment, voting rights held, and participation in the governance of the investee, if any. The Company may also consider additional relevant factors, such as the presence of other business relationships. The Company held an equity method investment in CeQur SA (CeQur), a privately held company, of $ 132.3 million and $ 60.4 million as of June 30, 2026 and December 31, 2025, respectively. On May 22, 2026, the Company made an additional investment in CeQur of CHF 64.0 million ($ 81.4 million USD), remaining at an ownership level of less than 50 %. The Company continues to account for the investment under the equity method. The additional investment was recorded as an increase to the carrying value of the existing equity method investment. In connection with the additional investment, the Company obtained, for an immaterial amount, the option to acquire the remainder of CeQur’s shares no earlier than 2028 at its sole discretion. In the event the option is exercised, the price to be paid will be calculated using a predetermined market-based formula. The Company recorded this call option in other long-term assets on the condensed consolidated balance sheets. The call option does not meet the criteria for derivative accounting. Equity method investments are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment charges were recognized for the equity method investment during the three and six months ended June 30, 2026. The Company’s condensed consolidated net loss included its proportionate share of the net loss of its equity method investee, which was $ 5.6 million and $ 9.5 million for the three and six months ended June 30, 2026, respectively, and $ 3.4 million and $ 6.9 million for the three and six months ended June 30, 2025, respectively. Revenue Recognition Revenue is generated primarily from sales of insulin pumps, single-use insulin cartridges and infusion sets to individual customers with third-party insurance coverage and through a network of distributors that resell the products to insulin-dependent diabetes customers. The Company recognizes revenue when it transfers control of the promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, net of estimated rebates, prompt payment discounts, and a provision for product returns. 8 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 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 recognizes 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 is typically upon shipment or delivery as title transfers. Certain complementary products, such as the Company’s data management and software update platforms, are considered distinct performance obligations that are satisfied over time, as access and support for these products is provided throughout the typical four-year warranty period of the insulin pumps. Accordingly, revenue related to these complementary products is deferred and recognized over the period of the performance obligation according to the agreement. The Company allocates the transaction price to each individual performance obligation based on the standalone selling price. For the pay-as-you-go reimbursement model, the Company allocates a portion of the transaction price associated with the customer’s initial supply order to the pump based on its relative standalone selling price. When standalone selling prices are not directly observable, the Company estimates such amounts using an expected cost plus a margin approach and allocates any residual consideration to the remaining performance obligations, as appropriate. 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. Derivative Instruments and Hedging Activities The Company records the fair value of derivative instruments as either current assets or current liabilities on the condensed consolidated balance sheets. Changes in the fair value of derivative instruments are recorded each period in current earnings or other comprehensive income (loss), depending on whether a derivative instrument is designated as part of a hedging transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, the Company formally documents the nature and relationships between the hedging instrument and hedged item. For derivatives formally designated as hedges, the Company assesses both at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. Gains or losses on cash flow hedges are reclassified from other comprehensive income (loss) to earnings when the hedged transaction occurs and affects consolidated results. 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. 9 Warranty Reserve The Company generally provides a four-year warranty on its insulin pumps to end-user customers and may replace any pumps that do not function as intended in accordance with the product specifications within the warranty period. In addition, the Company offers a six-month warranty on single-use insulin cartridges and infusion sets. Estimated warranty costs are recorded at the time of shipment, and the Company reevaluates the estimate of the warranty reserve obligation at each reporting period. Warranty costs are primarily estimated based on expected replacement rates using historical experience and the expected product replacement cost. Returned insulin pumps may be refurbished and redeployed. Experience has shown that initial data for any new pump version or pump platform may be insufficient. Therefore, the Company relies on long-term historical replacement data from existing platforms until sufficient data is available. As actual experience accumulates, the Company adjusts its warranty reserve estimate accordingly. In addition, the availability of replacement data may differ by country due to local compliance and privacy regulations, which may require the Company to estimate its warranty liability using available information or data from similar markets. The Company may 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, a tool that allows Tandem pump users to update their pump software from a personal computer. Warranty expense is recorded as a component of cost of sales in the consolidated statements of operations. The following table provides a reconciliation of the changes in product warranty liabilities for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Balance at beginning of the period $ 55,112 $ 52,210 $ 55,319 $ 51,408 Provision for warranties issued during the period 9,420 9,656 18,148 18,473 Settlements made during the period ( 9,767 ) ( 9,308 ) ( 18,702 ) ( 17,699 ) Increases in warranty estimates — 1,645 — 2,021 Balance at end of the period $ 54,765 $ 54,203 $ 54,765 $ 54,203 As of June 30, 2026 and December 31, 2025, total product warranty reserves were included in the following consolidated balance sheet accounts (in thousands): June 30, 2026 December 31, 2025 Other current liabilities $ 32,962 $ 33,277 Other long-term liabilities 21,803 22,042 Total warranty reserve $ 54,765 $ 55,319 Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis. The Company estimates the fair value of 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, including stock price volatility, expected term, dividend yield and risk-free interest rate. 10 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 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 grant date and the estimated probability of achieving the applicable performance conditions. The Company reassesses the probability of achieving such performance conditions each reporting period, and any resulting adjustment to compensation expense is recognized in the period of change. For certain performance-based RSUs with market-based criteria, the Company uses a Monte Carlo methodology to estimate the fair value at the date of grant. 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. Net Loss Per Share 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 Company’s convertible senior notes calculated using the if-converted method. For the three and six months ended June 30, 2026 and 2025, 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. 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): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Options to purchase common stock 80 113 89 114 Unvested restricted stock units 3,266 3,117 2,809 2,734 Warrants to purchase common stock 194 194 194 194 Awards granted under the ESPP 36 54 18 53 Convertible senior notes (if-converted) 17,261 9,159 14,662 9,335 20,837 12,637 17,772 12,430 11 Recently Adopted Accounting Pronouncements In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. The Company early adopted ASU 2025-06 effective January 1, 2026 using the prospective method. The adoption of ASU 2025-06 did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements Issued and Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), 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 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. 3. Short-Term Investments The Company invests in marketable securities primarily consisting of debt instruments of the United States Government, United States Government-sponsored enterprises, and financial institutions and corporations with strong credit ratings. The following represents a summary of the estimated fair value of short-term investments as of June 30, 2026 and December 31, 2025 (in thousands): As of June 30, 2026 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Available-for-sale securities: United States Government-sponsored enterprises $ 119,482 $ 166 $ ( 163 ) $ 119,485 United States Treasury securities 128,764 4 ( 468 ) 128,300 Commercial paper 19,492 — ( 14 ) 19,478 Corporate debt securities 126,206 14 ( 305 ) 125,915 Total $ 393,944 $ 184 $ ( 950 ) $ 393,178 12 As of December 31, 2025 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Available-for-sale securities: United States Government-sponsored enterprises $ 101,230 $ 773 $ ( 8 ) $ 101,995 United States Treasury securities 34,267 71 — 34,338 Commercial paper 21,500 17 ( 1 ) 21,516 Corporate debt securities 44,082 102 ( 1 ) 44,183 Total $ 201,079 $ 963 $ ( 10 ) $ 202,032 The contractual maturities of available-for-sale debt securities as of June 30, 2026 were as follows (in thousands): Years to Maturity As of June 30, 2026 Within One Year One to Two Years Two to Three Years Estimated Fair Value United States Government-sponsored enterprises $ 83,477 $ 33,021 $ 2,987 $ 119,485 United States Treasury securities 72,138 43,762 12,400 128,300 Commercial paper 19,478 — — 19,478 Corporate debt securities 50,716 75,199 — 125,915 Total $ 225,809 $ 151,982 $ 15,387 $ 393,178 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. 4. Composition of Certain Financial Statement Items Accounts Receivable Accounts receivable, net consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands): June 30, December 31, 2026 2025 Accounts receivable $ 169,958 $ 173,884 Less: allowance for credit losses ( 7,893 ) ( 8,393 ) Accounts receivable, net $ 162,065 $ 165,491 Allowance for Credit Losses The following table provides a reconciliation of the changes in the allowance for estimated accounts receivable credit losses for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Balance at beginning of the period $ 6,912 $ 7,125 $ 8,393 $ 7,251 Provision for expected credit losses 3,249 2,146 5,358 3,577 Write-offs and adjustments, net of recoveries ( 2,268 ) ( 3,176 ) ( 5,858 ) ( 4,733 ) Balance at end of the period $ 7,893 $ 6,095 $ 7,893 $ 6,095 13 Inventories Inventories consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands): June 30, December 31, 2026 2025 Raw materials $ 37,162 $ 31,770 Work-in-process 28,475 23,805 Finished goods 69,469 73,194 Total inventories $ 135,106 $ 128,769 5. Fair Value Measurements The Company performs fair value measurements in accordance with U.S. GAAP. 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; and 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 June 30, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in thousands): Fair Value Measurements as of June 30, 2026 Total Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 41,222 $ 41,222 $ — $ — Available-for-sale securities: United States Government-sponsored enterprises 119,485 — 119,485 — United States Treasury securities 128,300 128,300 — — Commercial paper 19,478 — 19,478 — Corporate debt securities 125,915 — 125,915 — Foreign exchange forward contracts 2,234 — 2,234 — Total assets $ 436,634 $ 169,522 $ 267,112 $ — Liabilities Foreign exchange forward contracts $ 128 $ — $ 128 $ — Total liabilities $ 128 $ — $ 128 $ — 14 Fair Value Measurements as of December 31, 2025 Total Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 75,642 $ 75,642 $ — $ — Available-for-sale securities: United States Government-sponsored enterprises 101,995 — 101,995 — United States Treasury securities 34,338 34,338 — — Commercial paper 21,516 — 21,516 — Corporate debt securities 44,183 — 44,183 — Total assets $ 277,674 $ 109,980 $ 167,694 $ — Liabilities Foreign exchange forward contracts $ 312 $ — $ 312 $ — Total liabilities $ 312 $ — $ 312 $ — (1) Generally, cash equivalents include money market funds and investments with a maturity of three months or less from the date of purchase. The Company’s Level 1 financial instruments, which are in active markets, are valued using unadjusted quoted market prices for identical instruments. The Company’s Level 2 financial instruments are valued using market prices on less active markets with observable valuation inputs such as interest rates and yield curves. The Company obtains the fair value of Level 2 financial instruments from quoted market prices, calculated prices, or quotes from third-party pricing services. The Company validates these prices through independent valuation testing and review of portfolio valuations provided by the Company’s investment managers. 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 three and six months ended June 30, 2026 and 2025. 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”). As of June 30, 2026 and December 31, 2025, 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 as of June 30, 2026 December 31, 2025 Convertible Senior Notes due 2029 $ 304,391 $ 324,979 Convertible Senior Notes due 2032 237,750 N/A Total fair value of outstanding convertible senior notes $ 542,141 $ 324,979 15 6. Leases The Company’s leases consist of operating leases for facility space to support general office, research and development, manufacturing and warehouse facilities, and equipment. These 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 located on High Bluff Drive in San Diego, California (Headquarters Lease). The Headquarters Lease term expires in April 2035. 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). Operating Lease Impairment Charges In the first quarter of 2025, the Company recorded operating lease impairment charges totaling $ 6.7 million in operating expenses. This included a $ 3.6 million impairment related to a portion of the Headquarters Lease in connection with its sublease agreement. The impairment charge also included $ 3.1 million related to the transfer of certain development activities from Lausanne, Switzerland to the United States and changes in assumptions for estimated future sublease income for the Company’s lease for space on Vista Sorrento Parkway in San Diego, California, which the Company ceased using in 2023. Supplemental Lease Disclosure Information The Company’s lease costs recorded in the consolidated statements of operations were as follows for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating lease cost (excluding sublease income) $ 4,209 $ 4,304 $ 8,461 $ 8,523 Short-term lease cost 25 111 48 118 Loss on lease termination and right-of-use asset impairment charges — — — 6,697 Sublease income ( 583 ) ( 566 ) $ ( 1,165 ) $ ( 1,132 ) Total lease cost $ 3,651 $ 3,849 $ 7,344 $ 14,206 Maturities of operating lease liabilities as of June 30, 2026 were as follows (in thousands): Years Ending December 31, 2026 (remaining) $ 9,197 2027 22,367 2028 18,770 2029 17,606 2030 18,501 Thereafter 91,243 Total undiscounted lease payments 177,684 Less: amount representing interest ( 41,008 ) Present value of operating lease liabilities 136,676 Less: current portion of operating lease liabilities ( 20,265 ) Operating lease liabilities - long-term $ 116,411 16 The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Weighted-average remaining lease term (in years) 8.6 8.6 Weighted-average discount rate used to determine operating lease liabilities 5.8 % 5.8 % 7. Debt Convertible Senior Notes Due 2025 The Company’s 1.50 % Convertible Senior Notes due 2025 (the 2025 Notes) matured in the second quarter of 2025 and the Company settled the balance of $ 40.8 million using existing cash balances. Convertible Senior Notes Due 2029 On March 8, 2024, the Company completed an offering of $ 316.3 million aggregate principal amount of 1.50 % Convertible Senior Notes due 2029 (the 2029 Notes). The proceeds from the issuance of the 2029 Notes were $ 306.8 million, net of debt issuance costs. The Company used a portion of the net proceeds to repurchase a portion of the 2025 Notes, repurchase shares of common stock, and pay the cost of the 2029 Capped Call Transactions discussed below. The 2029 Notes are the Company’s senior unsecured obligations. Interest is payable in cash semi-annually in arrears on March 15 and September 15 of each year beginning on September 15, 2024, at a rate of 1.50 % per year. The 2029 Notes mature on March 15, 2029 unless repurchased, redeemed, or converted in accordance with their terms 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). The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2029 Notes, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur before the maturity date or if the Company delivers a notice of redemption with respect to the 2029 Notes, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2029 Notes in connection with such a corporate event or convert its 2029 Notes called (or deemed called) for redemption in connection with such notice of redemption, as the case may be. The Company may not redeem the 2029 Notes before March 22, 2027. The Company has the option to redeem for cash all or any portion of the 2029 Notes on or after March 22, 2027 if the last reported sale price of the Company’s common stock has been at least 130 % of the 2029 Notes Conversion Price then in effect for at least 20 trading days (whether or not consecutive), during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest. No sinking fund is provided for the 2029 Notes. Holders of the 2029 Notes may convert all or a portion of their 2029 Notes at their option before December 15, 2028, in multiples of $1,000 principal amounts, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the 2029 Notes Conversion Price on each applicable trading day; • during the five business day period after any ten consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate of the 2029 Notes on such trading day; 17 • if the Company calls such 2029 Notes for redemption, at any time before the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or • on the occurrence of specified corporate events. On or after December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2029 Notes, in integral multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the 2029 Notes. Convertible Senior Notes Due 2032 On February 27, 2026, the Company completed an offering of $ 300.0 million aggregate principal amount of 0.00 % Convertible Senior Notes due 2032 (the 2032 Notes, and together with the 2029 Notes, the Notes), including the exercise in full of the initial purchasers’ option to purchase up to an additional $ 35.0 million principal amount of 2032 Notes. The proceeds from the issuance of the 2032 Notes were $ 291.2 million, net of debt issuance costs. The Company used approximately $ 15.3 million of the net proceeds from the offering to pay the cost of the 2032 Capped Call Transactions discussed below. The 2032 Notes mature on March 15, 2032 unless repurchased, redeemed, or converted in accordance with their terms before the maturity date. The 2032 Notes will not bear regular interest. The initial conversion rate for the 2032 Notes is 27.0362 shares of common stock per $1,000 principal amount of the 2032 Notes, which is equivalent to an initial conversion price of approximately $ 36.99 per share of the Company’s common stock (2032 Notes Conversion Price). The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2032 Notes, but will not be adjusted for any accrued and unpaid special interest. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption with respect to the 2032 Notes, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2032 Notes in connection with such a corporate event or convert its 2032 Notes called (or deemed called) for redemption in connection with such notice of redemption, as the case may be. The Company may not redeem the 2032 Notes before March 20, 2029. The Company has the option to redeem for cash all or any portion of the 2032 Notes on or after March 20, 2029 if the last reported sale price of the Company’s common stock has been at least 130 % of the 2032 Notes Conversion Price then in effect for at least 20 trading days (whether or not consecutive), during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100 % of the principal amount of the 2032 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the 2032 Notes. Holders of the 2032 Notes may convert all or a portion of their 2032 Notes at their option before December 15, 2031, in multiples of $1,000 principal amounts, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on June 30, 2026 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the 2032 Notes Conversion Price on each applicable trading day; • during the five business day period after any ten consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of the 2032 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate of the 2032 Notes on each such trading day; • if the Company calls such 2032 Notes for redemption, at any time before the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the 2032 Notes called (or deemed called) for redemption; or 18 • on the occurrence of specified corporate events. On or after December 15, 2031, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2032 Notes, in integral multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the 2032 Notes. The net carrying amount of the Notes on the condensed consolidated balance sheets consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands): June 30, 2026 December 31, 2025 Principal amount: Convertible Senior Notes Due 2029 $ 316,250 $ 316,250 Convertible Senior Notes Due 2032 300,000 N/A Total principal amount 616,250 316,250 Unamortized debt issuance costs ( 13,673 ) ( 6,214 ) Long-term senior convertible notes $ 602,577 $ 310,036 As of June 30, 2026, the if-converted value of the 2029 and 2032 Notes did no t exceed the principal amount. As of December 31, 2025, the if-converted value of the 2029 Notes did not exceed the principal amount. No conversion features for the 2029 and 2032 Notes were triggered during the three and six months ended June 30, 2026. The following table summarizes the effective interest rates for each of our convertible senior notes for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Effective interest rate: Convertible Senior Notes Due 2025 N/A 2.2 % N/A 2.2 % Convertible Senior Notes Due 2029 2.1 % 2.1 % 2.1 % 2.1 % Convertible Senior Notes Due 2032 0.5 % N/A 0.5 % N/A The following table details interest expense related to the Notes recognized for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Contractual interest expense $ 1,186 $ 1,237 $ 2,372 $ 2,576 Amortization of debt issuance costs 809 465 1,384 970 Total interest expense $ 1,995 $ 1,702 $ 3,756 $ 3,546 2029 Capped Call Transactions In connection with the issuance of the 2029 Notes, the Company entered into capped call transactions in March 2024 with certain counterparties at a net cost of $ 15.8 million (2029 Capped Call Transactions). The 2029 Capped Call Transactions are expected generally to reduce potential dilution to the common stock upon any conversion of the 2029 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap based on a cap price initially equal to $ 42.01 per share, and is subject to certain adjustments under the terms of the 2029 Capped Call Transactions. 19 2032 Capped Call Transactions In connection with the issuance of the 2032 Notes, the Company entered into capped call transactions in March 2026 with certain counterparties at a net cost of $ 15.3 million (2032 Capped Call Transactions). The 2032 Capped Call Transactions are expected generally to reduce potential dilution to the common stock upon any conversion of the 2032 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2032 Notes, as the case may be, with such reduction and/or offset subject to a cap based on a cap price initially equal to $ 47.08 per share, and is subject to certain adjustments under the terms of the 2032 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 2032 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 capped call transactions was recorded as a reduction of the Company’s additional paid-in capital in the Company’s condensed consolidated balance sheet and will not be remeasured. 8. Stockholders’ Equity Shares Reserved for Future Issuance The following shares of the Company’s common stock were reserved for future issuance as of June 30, 2026 (in thousands): Shares reserved for issuance upon conversion of convertible senior notes 17,262 Shares underlying outstanding warrants 194 Shares underlying outstanding stock options 2,584 Shares underlying unvested RSUs 4,843 Shares authorized for issuance pursuant to awards granted under the ESPP 1,393 Shares authorized for future equity award grants 1,930 Total 28,206 Common Stock Warrants Warrants to purchase shares of the Company’s common stock outstanding as of June 30, 2026 are equity-classified and were as follows: Issue Date Exercise Price Per Share Warrants Outstanding Expiration Date of Warrants Outstanding March 2017 $ 23.50 193,788 March 2027 Each warrant allows the holder to purchase one share of common stock at the per share exercise price of the warrant. Stock-Based Compensation The following table summarizes the allocation of stock-based compensation expense included in the condensed consolidated statements of operations for all stock-based compensation arrangements for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of sales $ 974 $ 1,751 $ 2,357 $ 3,476 Selling, general and administrative 10,786 16,544 20,862 32,919 Research and development 3,981 7,347 8,181 14,735 Total stock-based compensation expense $ 15,741 $ 25,642 $ 31,400 $ 51,130 The total stock-based compensation expense capitalized as part of the cost of the Company’s inventories was $ 0.6 million and $ 1.2 million as of June 30, 2026 and December 31, 2025, respectively. 20 Restricted Stock Units The total number of RSUs granted and the respective weighted average grant date fair value were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 RSUs granted 2,457,098 1,953,827 2,619,630 2,044,370 Weighted average grant date fair value (per share) $ 17.09 $ 20.77 $ 17.33 $ 21.06 Employee Stock Purchase Plan The Company records stock-based compensation expense associated with the ESPP using the Black-Scholes option pricing model. Valuations are performed on the grant date at the beginning of the purchase period, which generally occurs in May and November of each year. The assumptions used in the Black-Scholes option pricing model for the ESPP were as follows for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Weighted average grant date fair value (per share) $ 6.45 $ 10.86 Risk-free interest rate 3.9 % 4.1 % Dividend yield 0.0 % 0.0 % Expected volatility 75.9 % 74.9 % Expected term (in years) 1.3 1.3 9. Derivatives Due to the global nature of the Company’s operations, a portion of its operating activities 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, operating expense and cost of sales. As of June 30, 2026, the Company’s outstanding foreign currency forward contracts settle within one year. 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 condensed consolidated statements of cash flows are included in net cash provided by operating activities. All derivative instruments are used solely for risk management purposes and are not for speculative trading purposes. For 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 $ 139.1 million as of June 30, 2026. The Company recorded unrealized gains on foreign currency forward contracts of $ 0.7 million and $ 2.4 million, respectively, for the three and six months ended June 30, 2026. The Company recorded unrealized losses of $ 0.6 million for both the three and six months ended June 30, 2025. The following table summarizes the effect of foreign currency forward contracts designated as hedging instruments in our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (in thousands): Net Losses Reclassified from AOCI into Operating Income Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Designated cash flow hedges: Revenue $ 420 $ ( 478 ) $ 359 $ ( 478 ) Operating expense ( 47 ) ( 27 ) ( 59 ) ( 27 ) 21 10. Employee Benefits Defined Contribution Plans The Company has defined contribution plans for certain of its employees. The Company’s largest defined contribution plan is the 401(k) plan for employees in the United States who are at least 18 years of age. Eligible employees may participate in the plan beginning on the first day of the calendar month following their date of hire. Unless they affirmatively elect otherwise, eligible employees are automatically enrolled in the plan following 30 days from their date of hire. Under the terms of the plan, eligible employees may make voluntary contributions as a percent of compensation and the Company may elect to match a discretionary percentage of employee contributions. 11. Income Taxes For the three and six months ended June 30, 2026, the Company recognized income tax expense of $ 0.5 million and $ 1.0 million, respectively, on a pre-tax loss of $ 20.7 million and $ 40.5 million, respectively. The Company calculated the provision for income taxes for the three and six months ended June 30, 2026 by applying an estimate of the annual effective tax rate for the full year to ordinary loss adjusted by the tax impact of discrete items. Income tax expense for the three and six months ended June 30, 2026 was primarily attributable to state and foreign income tax expense as a result of current taxable income in certain jurisdictions. For the three and six months ended June 30, 2025, the Company recognized income tax benefit of $ 5.3 million and tax expense of $ 3.1 million, respectively, on a pre-tax loss of $ 57.7 million and $ 179.8 million, respectively. The Company calculated the provision for income taxes for the three and six months ended June 30, 2025 by applying an estimate of the annual effective tax rate for the full year to ordinary loss adjusted by the tax impact of discrete items. Income tax benefit and expense for the three and six months ended June 30, 2025 was primarily attributable to federal, state and foreign income tax benefit and expense as a result of current taxable income in certain jurisdictions. The Company continues to maintain a full valuation allowance against its net deferred tax assets as of June 30, 2026 based on the current assessment that it is not more likely than not these future benefits will be realized before expiration. 12. Business Segment and Geographic Information Segment Reporting Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (CODM) in making decisions regarding resource allocation and assessing performance. The Company is organized based on its current product portfolio, which consists primarily of insulin pumps, single-use insulin cartridges, and infusion sets for the storage and delivery of insulin. The Company views its operations and manages its business as one reporting segment because key operating decisions and resource allocations are made by the CODM using consolidated financial data. Accordingly, the Company is organized as a single operating segment and therefore a single reportable segment: Insulin Pumps and Supplies. The Company’s CODM is the Chief Executive Officer (CEO), who evaluates segment performance based on segment net income (loss) on a consolidated basis. Segment net income (loss) was consistent with the net loss amounts reported in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025. There were no significant segment expenses that are regularly provided to the CODM other than those reported in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025. 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 June 30, 2026 and December 31, 2025. 22 Disaggregation of Sales Segment revenues were consistent with revenue reported in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025. The Company primarily sells its products through national and regional distributors in the United States on a non-exclusive basis, and primarily through distribution partners internationally. In the United States, Canada and select countries in Europe, 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. During the three and six months ended June 30, 2026 and 2025, 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): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 United States $ 179,292 $ 170,209 $ 340,135 $ 320,841 International 75,268 70,469 161,646 154,259 Total Sales $ 254,560 $ 240,678 $ 501,781 $ 475,100 Sales within the pharmacy channel accounted for 10 % and 3 % of the Company’s United States sales for the three months ended June 30, 2026 and 2025, respectively. Sales within the pharmacy channel accounted for 8 % and 2 % of the Company’s United States sales for the six months ended June 30, 2026 and 2025, respectively. Direct sales to customers accounted for 13 % and 12 % of the Company’s international sales for the three and six months ended June 30, 2026, respectively. Direct sales to customers accounted for 4 % of the Company’s international sales for both the three and six months ended June 30, 2025. During the three and six months ended June 30, 2026 and 2025, sales by product were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Pump $ 114,652 $ 111,871 $ 225,078 $ 213,962 Supplies and other 139,908 128,807 276,703 261,138 Total Sales $ 254,560 $ 240,678 $ 501,781 $ 475,100 13. Acquisitions In January 2025, the Company entered into an amendment agreement with AMF Medical SA that removed contingent liabilities included in the original share purchase agreement entered into in 2022. Under the revised terms, 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 contract were removed. As the transaction was determined to be an asset acquisition, the total consideration of CHF 68.0 million ($ 75.2 million USD) was recognized as acquired in-process research and development (IPR&D) and the Company recorded a $ 3.4 million foreign currency transaction loss within other income (expense), net, in the Company’s condensed consolidated statements of operations and comprehensive loss in 2025. 14. Commitments and Contingencies Legal and Regulatory 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. The Company provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance. In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in its condensed consolidated financial statements. 23 Although the results of legal proceedings and claims cannot be predicted with certainty, as of June 30, 2026 the Company believes it is not currently a party to any legal proceedings, regulatory matters, or other disputes or claims for which a material loss was considered probable or for which the amount or range of loss was reasonably estimable. However, regardless of the merit of the claims raised or the outcome, legal proceedings may have an adverse impact on the Company as a result of defense and settlement costs, diversion of management time and resources, and other factors. Letters of Credit As of June 30, 2026, in connection with one of the Company’s operating leases (see Note 6, “Leases”), the Company had a $ 4.9 million unsecured irrevocable standby letter of credit arrangement with a bank, under which the landlord of the building is the beneficiary. The Company is required to maintain the standby letter of credit throughout the term of the lease, which expires in April 2035. 24