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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes included in this annual report. The following discussion may contain forward-looking statements that reflect our plans, estimates, and beliefs, which are subject to risks, uncertainties, and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed under the headings “Risk Factors” and “Forward-Looking Statements.”

Overview

Our mission is to improve the lives of people with diabetes. We are primarily engaged in the development, manufacture, and sale of our proprietary Omnipod product platform, a continuous insulin delivery system for people with insulin-dependent diabetes. The Omnipod platform includes: the most recent generation Omnipod 5, and its predecessors Omnipod DASH and Classic Omnipod, all of which eliminate the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing. Omnipod 5, which builds on our Omnipod DASH mobile platform, is a tubeless automated insulin delivery system that integrates with a CGM to manage blood sugar and is fully controlled by a compatible personal smartphone or Omnipod 5 Controller. The CGM is sold separately by third parties. Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like PDM with color touch screen user interface. We have been phasing-out Classic Omnipod as we launch Omnipod 5.

Our financial objective is to sustain profitable growth. To achieve this, we launched Omnipod 5 in the United States in 2022 and in the United Kingdom and Germany in June and August 2023, respectively. In June 2024, we launched our full market releases of Omnipod 5 in the Netherlands and France, and most recently, in January 2025, we announced that Omnipod 5 is now available in Italy, Denmark, Finland, Norway, and Sweden. Additionally, we are working on further building our international teams and advancing our regulatory, reimbursement, and market development efforts so we can bring Omnipod 5 to additional international markets.

In August 2024, we received FDA clearance for an expanded indication of Omnipod 5 for people with type 2 diabetes. Due to the positive results of our Omnipod 5 type 2 pivotal trial and the learnings from our Omnipod GO commercial pilot, we made a strategic decision to drive growth in the type 2 diabetes market with Omnipod 5 and, accordingly, decided not to move forward with the commercialization of Omnipod GO.

During 2024, we completed participant enrollment in our RADIANT study in France, the United Kingdom, and Belgium, which is our Omnipod 5 with Libre 2 randomized controlled trial. Similar to the randomized control trial that we completed in the United States and France for Omnipod 5 with DexCom’s G6 CGM, the objective is to provide data to support our pricing and market access initiatives as we roll out Omnipod 5 with multiple sensors across our international markets. We also continue to expand market access and awareness of Omnipod products through our direct to consumer advertising programs and through growing our presence in the U.S. pharmacy channel, where access to Omnipod 5 and Omnipod DASH is simpler and affordable, as no up-front investment is required.

We also continue to focus on our product development efforts, including AID offerings, such as choice of smartphone integration and CGM, and enhancing the customer experience through digital product and data capabilities. Omnipod 5 integration with Dexcom’s G6 CGM is available in every country where Omnipod 5 is available. In June 2024, we began our full market release of Omnipod 5 with Dexcom’s G7 CGM in the United States. Similarly, in June 2024 we launched our full market release of Omnipod 5 with Libre 2 Plus for individuals aged two years and older with type 1 diabetes in both the United Kingdom and Netherlands, where we offer sensor of choice (integration with either Abbott’s Libre 2 Plus or Dexcom’s G6 CGM). We also now offer sensor of choice in the United States, Italy, Denmark, Finland, Norway, and Sweden. Additionally, in October 2024, our Omnipod 5 app for iPhone compatible with Dexcom’s G6 CGM became fully available in the United States.

Finally, we continue to take steps to strengthen our global manufacturing capabilities. In 2024, we began producing product at our newly constructed manufacturing plant in Malaysia. This plant provides us with increased capacity to satisfy our growing demand, supports our international expansion strategy, and is expected to drive higher gross margins over time.

Results of Operations

The discussion of our results of operations for 2022 has been omitted from this Form 10-K but can be found in Item 7. Management’s Discussion and Analysis and Results of Operations in our Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on February 22, 2024.

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Factors Affecting Operating Results

Our Pods are intended to be used continuously for up to three days, after which it may be replaced with a new disposable Pod. We recently achieved a milestone of 500,000 estimated active global customers using Omnipod products, including 365,000 global customers using Omnipod 5. The unique patented design of the Omnipod allows us to provide Pod therapy at a relatively low or no up-front investment in regions where reimbursement allows for it and our pay-as-you-go pricing model reduces the risk to third-party payors. As we grow our customer base, we expect to generate an increasing portion of our revenues through recurring sales of our disposable Pods, which provide recurring revenue.

Following our strategic decision to not move forward with the commercialization of Omnipod GO discussed above, we recorded a charge of $13.5 million related to certain inventory components that we no longer expect to utilize, which is included in our consolidated statement of income for 2024.

In 2022, we issued two voluntary Medical Device Correction (“MDC”) notices, one for our Omnipod DASH PDM related to its battery and the other for our Omnipod 5 Controller related to its charging port and cable. During 2022, we initially recorded a net charge of $57.9 million related to these MDCs and, in 2023, we recorded $11.5 million of income associated with a change in our estimated liability for the MDCs, primarily due to lower distribution costs.

Comparison of the Years Ended December 31, 2024 and December 31, 2023

Revenue

Years Ended December 31,

(in millions) 2024 2023 % Change Currency Impact Constant Currency(1)

(1) Constant currency revenue growth is a non-GAAP financial measure which should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. See “Management’s Use of Non-GAAP Measures.”

Total revenue increased $374.5 million, or 22.1%, to $2,071.6 million in 2024, compared with $1,697.1 million in 2023. Constant currency revenue growth of 21.9% was primarily driven by higher volume largely attributable to our growing customer base and, to a lesser extent, higher price.

U.S.

Revenue from the sale of Omnipod products in the U.S. increased $258.3 million, or 20.6%, in 2024 to $1,509.3 million, compared with $1,251.0 million in 2023. This increase primarily resulted from higher volume through the pharmacy channel driven by growing our customer base, partially offset by a decrease in estimated inventory days-on-hand at distributors and lower conversions to Omnipod 5. Inventory days-on-hand declined to more normal levels following an acceleration of orders by U.S. pharmacy wholesales in advance of the implementation of our new ERP system on January 1, 2024. We experienced a benefit from conversions to Omnipod 5 in the prior year following the launch of the product in the latter half of 2022 since users generally fill both their Omnipod 5 starter kit and their first month of refills simultaneously. Conversions to Omnipod 5 declined since the vast majority of U.S. conversions to Omnipod 5 occurred in 2023. To a lesser extent, the revenue increase was driven by a higher average selling price resulting from our annual wholesale acquisition cost increase implemented during the second quarter of 2024 and growth in the pharmacy channel.

Revenue from the sale of Omnipod products in the U.S. includes $587.8 million of related party revenue in 2024, compared with $473.7 million in 2023. The $114.1 million increase primarily resulted from growth through the pharmacy channel. Additional information regarding our related party transactions is provided in Note 5 to our consolidated financial statements.

In 2025, we expect strong U.S. revenue growth primarily driven by the benefits of our recurring revenue model and continued volume growth of Omnipod 5. Our recent type 2 indication for Omnipod 5, the launch of Omnipod 5 integrations with both Dexcom’s G7 CGM and Libre 2 Plus, and the launch our Omnipod 5 app for iPhone, are expected to contribute to an increase in our customer base.

International

Revenue from the sale of Omnipod products in our international markets increased $113.3 million, or 27.6%, in 2024 to $523.4 million, compared with $410.1 million in 2023. Excluding the 0.7% favorable impact of currency exchange, the remaining 26.9% increase in revenue was primarily due to higher volumes from the launches of Omnipod 5 in the United Kingdom and Germany in the prior year, driven by our growing customer base and the favorable impact of conversions to

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Omnipod 5. A higher average selling price for Omnipod 5 compared with Omnipod DASH and Classic Omnipod also contributed to the revenue increase, although to a lesser extent.

In 2025, we expect higher International Omnipod revenue due to continued volume growth driven by new customers and conversions to Omnipod 5 primarily due to the launch of Omnipod 5 in France and the Netherlands, growth from the earlier launches in Germany and the United Kingdom, and the continued roll out of Omnipod 5 in additional markets.

Drug Delivery

Substantially all of our Drug Delivery revenue consists of sales of pods to Amgen for use in the Neulasta® Onpro® kit, a delivery system for Amgen’s Neulasta to help reduce the risk of infection after intense chemotherapy. Drug Delivery revenue increased $2.9 million, or 8.1%, to $38.9 million in 2024, compared with $36.0 million in 2023. This increase primarily resulted from an increase in orders from our partner, partially offset by a reimbursement from our partner to cover a portion of our increased production costs in the prior year, which did not repeat in the current year.

Costs and Expenses

Years Ended December 31,

(in millions) Amount Percent of Revenue Amount Percent of Revenue

Selling, general and administrative expenses $ 917.2 44.3 % $ 734.9 43.3 %

Cost of Revenue

Cost of revenue for 2024 increased $88.7 million, or 16.5%, to $625.9 million, compared with $537.2 million in 2023. Gross margin was 69.8% in 2024, compared with 68.3% in 2023. The 1.5 point increase in gross margin was primarily driven by pricing benefits in both the U.S. pharmacy channel and in our international markets, improved manufacturing efficiencies, and procurement savings. These increases were partially offset by a $13.5 million charge related to certain components utilized in Omnipod GO, which we decided not to commercialize, an $11.5 million accrual reversal during the prior year associated with the voluntary MDC notices we issued in 2022, which did not recur in the current year, and higher costs due to inflation.

We expect gross margin to further increase to approximately 70.5% in 2025 primarily due to improved manufacturing efficiencies.

Research and Development

Research and development expenses increased $14.6 million, or 7.1%, to $219.6 million for 2024, compared with $205.0 million for 2023. Research and development expenses as a percent of revenue decreased to 10.6% in 2024, compared with 12.1% in 2023 primarily due to an increase in sustaining costs following the launch of Omnipod 5 in the United States, which are included in selling, general and administrative expenses. We expect research and development spending in 2025 to increase compared with 2024 as we continue to invest in advancing our innovation and clinical pipeline.

Selling, General and Administrative

Selling, general and administrative expenses increased $182.3 million, or 24.8%, to $917.2 million in 2024, compared with $734.9 million in 2023. This increase was primarily attributable to year-over-year headcount additions to support our growth, international expansion and sustain Omnipod 5, and as a result of our new organizational structure. To a lesser extent, the increase was due to higher legal fees to defend our intellectual property and support our business growth; an increase in advertising expense; higher costs associated with the continued commercial rollout of Omnipod 5 in international markets; and increases in travel and expenses resulting from headcount additions.

We expect selling, general and administrative expenses to increase in 2025 compared with 2024 due to investments in our operating structure, primarily headcount additions, particularly in the areas of customer support, sales and information technology support, to facilitate continued growth globally. We also plan to make additional investments to support the Omnipod platform and to continue support the phased launch of Omnipod 5 in our existing international markets and prepare for expansion into new countries.

Non-Operating Items

Interest Expense and Income

Interest expense increased $6.5 million to $42.7 million in 2024, compared with $36.2 million in 2023 primarily due to fees paid to amend our Term Loan. Interest income increased $10.9 million to $39.5 million in 2024, compared with $28.6 million in 2023 primarily driven by increased average cash balances and higher interest rates.

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Other (Expense) Income, net

Other expense, net of $5.5 million for 2024 consists primarily of $3.8 million of loss related to fair value adjustments associated with a strategic debt investment.Other income, net of $2.2 million for 2023 consists primarily of$2.6 million of gains related to fair value adjustments associated with our strategic debt and equity investments.

Income Tax Expense

Income tax benefit was $118.1 million on pre-tax income of $300.2 million for 2024, compared with income tax expense of $8.3 million on pre-tax income of $214.6 million for 2023. Our effective tax rate was a benefit of 39.3% for 2024, compared with a provision of 3.9% for 2023. The decrease in our effective tax rate was primarily due to a $182.5 million non-cash tax benefit from the release of the majority of our valuation allowance against deferred tax assets discussed in Note 22 to our consolidated financial statements and a $8.3 million tax benefit from a research and development tax credit recovery project for the years 2017 through 2022. These tax benefits were partially offset by a $8.2 million decrease in tax benefits from employee stock-based compensation.

In 2021, the Organization for Economic Co-operation and Development (“OECD”) and G20 international forum released the Model Global Anti-Base Erosion (GloBE) rules (“Model Rules”) under Pillar Two. These Model Rules set forth the common approach for a Global Minimum Tax at 15% for multinational enterprises with revenue greater than €750 million and is expected to be applicable to Insulet. Pillar Two has been adopted by the Council of the European Union for implementation by European Union member states by December 31, 2023, with effect for tax years beginning 2024. Similar directives under Pillar Two are already adopted or expected to be adopted by taxing authorities in other countries where Insulet has business operations, with widespread implementation of the Global Minimum Tax in 2024 and 2025. There was no impact on the consolidated financial statements for 2024. While we do not expect the Pillar Two Model Rules and related legislation to have a material impact on our consolidated financial statements for 2025, we continue to evaluate their potential impact on future years.

Adjusted EBITDA

The table below presents reconciliations of Adjusted EBITDA, a non-GAAP financial measure, to net income, the most directly comparable financial measure prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”):

Years Ended December 31,

Interest expense, net 3.2 7.6

Depreciation and amortization 80.8 72.8

Stock-based compensation expense 69.3 48.3

Voluntary medical device corrections(1) — (11.5)

Unrealized loss (gain) on investments(2) 3.8 (2.6)

(1) Represents net (income) expense resulting from estimated costs associated with the voluntary MDC notices issued in the fourth quarter of 2022 and adjustments to those costs, which is included in cost of revenue. Refer to Note 13 to our consolidated financial statements for additional information.

(2) Represents non-operating gain or loss related to fair value adjustments of strategic debt and other investments.

Non-GAAP Financial Measures

Management uses the non-GAAP financial measures described below.

Constant currency revenue growth represents the change in revenue between current and prior year periods using the exchange rate in effect during the applicable prior year period. We present constant currency revenue growth because we believe it provides meaningful information regarding our results on a consistent and comparable basis. Management uses this non-GAAP financial measure, in addition to financial measures in accordance with GAAP, to evaluate our operating results. It is also one of the performance metrics that determines management incentive compensation.

Adjusted EBITDA represents net income plus net interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense and other significant transactions or events, such as legal settlements, medical device corrections, gains (losses) on investments, and loss on extinguishment of debt, which affect the period-to-period comparability of our performances, as applicable. We present Adjusted EBITDA because management uses it as a supplemental measure in assessing our performance, and we believe that it is helpful to investors and other interested parties as a measure of our

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comparative performance from period to period. Adjusted EBITDA is a commonly used measure in determining business value and we use it internally to report results.

Free cash flow, a non-GAAP measure, represents the cash that we have available to pursue opportunities that we believe enhance shareholder value and is calculated as net cash provided by operating activities less capital expenditures. Management uses this non-GAAP measure, in addition to U.S. GAAP financial measures, to evaluate our operating results.

These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. In addition, the above definitions may differ from similarly titled measures used by others. Non-GAAP financial measures exclude the effect of items that increase or decrease our reported results of operations; accordingly, we strongly encourage investors to review our consolidated financial statements in their entirety.

Liquidity and Capital Resources

We believe that our current liquidity as further described below will be sufficient to meet our projected operating, investing and debt service requirements for at least the next twelve months.

Capitalization

The following table contains several key measures to gauge our financial condition and liquidity at the end of each year:

As of December 31,

Cash and cash equivalents $ 953.4 $ 704.2

Current portion of long-term debt $ 83.8 $ 49.4

Debt-to-total capital ratio 53 % 66 %

Net debt-to-total capital ratio 16 % 33 %

Convertible Debt

To finance our operations and global expansion, we have periodically issued convertible senior notes, which are convertible into our common stock. As of December 31, 2024, the following Convertible Senior Notes were outstanding:

(1) Per $1,000 face value of notes.

In connection with the issuance of the Convertible Senior Notes, we purchased capped call options (“Capped Calls”) on our common stock. By entering into the Capped Calls, we expect to reduce the potential dilution to our common stock (or, in the event the conversion is settled in cash, to provide a source of cash to settle a portion of our cash payment obligation) if at the time of conversion our stock price exceeds the conversion price under the Convertible Senior Notes. The Capped Calls have an initial strike price of $335.90 per share and cover 3.5 million shares of our common stock.

Credit Agreement

We have a $300 million senior secured revolving credit facility (the “Revolving Credit Facility”), which expires in 2028. At December 31, 2024, no amount was outstanding under the Revolving Credit Facility. The Revolving Credit Facility contains a covenant to maintain a specified leverage ratio when there are amounts of at least 35% of the aggregate Revolving Credit Facility outstanding. It also contains other customary covenants, none of which we consider restrictive to our operations. Additionally, we have a Term Loan B (“Term Loan”), which matures in 2031, which contains covenants restricting or limiting our ability to incur additional indebtedness, make asset dispositions, create or permit liens, sell, transfer or exchange assets, guarantee certain indebtedness, and make acquisitions and other investments.

Additional information regarding our debt is provided in Notes 15 to the consolidated financial statements.

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Summary of Cash Flows

Years Ended December 31,

Cash provided by (used in):

Financing activities (28.1) (13.6)

Effect of exchange rate changes on cash and cash equivalents (6.8) 1.8

Net increase in cash, cash equivalents, and restricted cash $ 249.2 $ 14.5

Operating Activities

Net cash provided by operating activities of $430.3 million in 2024 was primarily attributable to net income, as adjusted for deferred income taxes, depreciation and amortization, stock-based compensation expense, and a $17.0 million working capital outflow. The working capital outflow was driven by a $32.4 million increase in inventories, a $21.9 million increase in prepaid expenses and other assets, and a $10.4 million increase in accounts receivable, partially offset by a $45.5 million increase in accrued expenses and other liabilities. The increase in inventories was primarily due to a planned inventory build to satisfy our growing demand and, to a lesser extent, to mitigate supply chain risk. The increase in prepaid expenses and other assets was primarily driven by an increase in prepaid software fees, cloud computing upgrade and implementation costs, prepaid income taxes, and capitalized commissions. The increase in accounts receivable was primarily due to an increase in sales driven by our growing customer base. Finally, the increase in accrued expenses and other liabilities was primarily driven by an increase in compensation costs due to headcount additions and an increase in professional consulting fees primarily driven by higher legal costs and direct-to-consumer spending.

Investing Activities

Net cash used in investing activities was $146.2 million in 2024, compared with $119.4 million in 2023.

Capital Spending—Capital expenditures were $124.9 million and $75.6 million in 2024 and 2023, respectively. The $49.3 million increase primarily related to the purchase of machinery, equipment and tooling to increase our manufacturing capacity for our new Malaysia manufacturing facility and continuous improvements at our other owned manufacturing facility. We expect capital expenditures for 2025 to increase compared with 2024 as we continue to expand and optimize our manufacturing and supply chain operations as well as support our global expansion. We expect to fund our capital expenditures using existing cash.

Investments in Developed Software—Investments in developed software were $9.1 million and $8.5 million in 2024 and 2023, respectively, and primarily related to investments in projects to support our cloud-based capabilities.

Investments—In 2024 and 2023, we made strategic investments in private companies in the amount of $12.2 million and $7.2 million, respectively.

Acquisitions—In 2023, we paid Bigfoot Biomedical, Inc. $25.1 million, including transaction costs, to acquire patent assets related to pump-based AID technologies. We also paid a purchase price holdback of $3.0 million associated with our 2022 acquisition of substantially all the assets related to the manufacture and production of shape-memory alloy wire assemblies used in the production of our product from Dynalloy, Inc.

Financing Activities

Net cash used in financing activities was $28.1 million in 2024, compared with $13.6 million in 2023.

Debt Issuance and Repayments—In 2024, we refinanced our Term Loan, which resulted in net cash proceeds of $130.0 million, net of issuance costs, and the simultaneous repayment of $132.2 million of the Term Loan. Refer to Note 15 for more information regarding this refinancing. Additionally, we made $26.4 million and $27.0 million of aggregate principal payments on our equipment financings, Term Loan, and mortgage in 2024 and 2023, respectively.

Finance Lease Payments—During 2024, we made $22.7 million in finance lease repayments associated with our Malaysia manufacturing facility, including the amount associated with exercising our option to purchase the property.

Proceeds and Repayments from Secured Borrowing—During 2024, we received $45.5 million of cash advances from a third-party to whom we outsource our insurance claim submissions process in a certain country. Additionally, we repaid $34.8 million of cash advances during 2024.

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Proceeds from Exercise of Stock Options—Proceeds from option exercises were $8.2 million and $16.3 million in 2024 and 2023, respectively. The $8.1 million decrease was primarily driven by option exercises by former executives in the prior year.

Proceeds from Shares Issued Under Employee Stock Purchase Plan (“ESPP”)—Proceeds from the issuance of shares under the ESPP were $11.9 million and $10.6 million in 2024 and 2023, respectively.

Payment of Taxes for Restricted Stock Net Settlements—Payments for taxes related to net restricted and performance stock unit settlements were $7.6 million and $13.2 million in 2024 and 2023, respectively. The $5.6 million decrease was primarily driven by a lower fair market value of the restricted and performance stock units (“PSUs”) that vested in 2024 compared to the prior year, partially offset by higher achievement of the PSUs that vested in 2024 (111% achievement), compared to in the prior year (84% achievement).

Free Cash Flow

Free cash flow was $305.4 million in 2024, compared with $70.1 million in 2023. The $235.3 million increase in free cash flow primarily resulted from the $285.8 million increase in gross profit, partially offset by the $49.3 million increase in capital expenditures.

Free cash flow is a non-GAAP measure, which should be considered supplemental to and not a substitute for our reported financial results prepared in accordance with U.S. GAAP. See “Non-GAAP Financial Measures.” A reconciliation between net cash provided by operating activities (the most comparable U.S. GAAP measure) and free cash flow is as follows:

Years Ended December 31,

Net cash provided by operating activities $ 430.3 $ 145.7

Commitments and Contingencies

Contractual Obligations—The following table summarizes our contractual obligations as of December 31, 2024:

(in millions) Short Term Long Term Total

(1)Interest on debt and lease obligations are projected for future periods using the interest rates in effect as of December 31, 2024. Certain of these projected interest payments may differ in the future based on changes in market interest rates. Additional information regarding our leases is provided in Note 14 to the consolidated financial statements.

(2)Excludes the impact of the interest rate swaps discussed in Note 17 to our consolidated financial statements.

(3)Purchase obligations include commitments for the purchase of components for our products, commitments related to establishing additional manufacturing capabilities, and other commitments for purchases of goods or services in the normal course of business. These commitments are derived from purchase orders, supplier contracts and open orders based on projected demand information.

Legal Proceedings—In December 2024, a jury found that EOFlow Co., Ltd. (“EOFlow”) and several other defendants misappropriated certain of our trade secrets and awarded us $452 million in damages. EOFlow subsequently moved for a directed verdict and for a new trial, as well as for a reduction of the jury award, and we moved for a permanent worldwide injunction on the sale of EOFlow’s EOPatch 2 product and any other products that embody our trade secrets. EOFlow and other defendants may seek to appeal the verdict. Further, EOFlow may not be able to satisfy this damage award; accordingly, it has not been recorded in our consolidated statement of income. Refer to Note 18 to our consolidated financial statements for additional information regarding this matter.

Off-Balance Sheet Arrangements

Information regarding our letters of credit is provided in Note 18 to the consolidated financial statements.

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Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on the relevant information available at the end of each period.

Pharmacy Rebates

We exercise significant judgment when we determine variable consideration adjustments. As discussed in Note 2 to our consolidated financial statements, we are subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the United States. Reductions to our revenues for rebates on products sold through our distributors under pharmacy benefits are the most significant component of variable consideration. In addition, pharmacy rebates are most at risk for significant adjustment because of the time delay between the recording of the provision when revenue is recognized and its ultimate settlement, an interval that generally ranges from 30 to 90 days, but can last up to one year. Our estimates for pharmacy rebates are based on historical experience, revenue growth, distribution channel lag, contract amendments and trends. Pharmacy rebates charged against gross sales amounted to $452.7 million, $367.3 million, and $175.2 million in 2024, 2023, and 2022, respectively. When actual pharmacy rebate settlements differ from our estimates, we adjust our estimates, which affects reported revenue in the period that such variances become known.

Income Taxes

We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our income tax provision. The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations and the potential for future adjustments by tax authorities. While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations in determining the adequacy of our provision for income taxes and adjust the income tax provision, income taxes payable, and deferred taxes in the period in which the facts that give rise to a revision become known.

Significant judgement is required in determining whether it is probable that sufficient future taxable income will be available against which a deferred tax asset can be utilized. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including cumulative income in recent fiscal years, our forecast of future taxable income exclusive of certain reversing temporary differences and significant risks and uncertainties related to our business. In determining future taxable income, we are responsible for assumptions utilized including the amount of state, federal and international pre-tax operating income, the reversal of certain temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income in applicable tax jurisdictions, which are based on our commercial experience to date and are consistent with the plans and estimates that we are using to manage our underlying business.

During 2024, we determined that it is more likely than not that we will realize substantially all of our net deferred tax assets after weighing positive and negative evidence to assess recoverability, including cumulative income (loss) position, revenue growth, current profitability, and expectations regarding future forecasted income. Accordingly, in 2024, we recorded a tax benefit of $182.5 million from the release of our valuation allowance. As of December 31, 2024, we have a valuation allowance of $23.9 million on certain U.S. state tax credits and state net operating loss carryforwards because it is more likely than not that those deferred tax assets will not be realized.

Significant judgment is also required to evaluate uncertain tax positions and is based on a number of factors, including changes in facts or circumstances, changes in tax laws, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in a material increase or decrease in our income tax expense in the period in which we make the change, which could have a material impact on our effective rate and results of operations.

Accounting Standards Issued and Not Yet Adopted as of December 31, 2024

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires incremental annual income tax disclosures. The new guidance standardizes categories for the effective tax rate reconciliation and requires disaggregation of income taxes and additional income tax-related disclosures. We are required to comply with these new disclosure requirements beginning with our annual filing for 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expenses Disaggregation Disclosures (Subtopic 220-40). The new guidance requires disaggregated disclosure of expenses included in

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certain expense captions presented in the statements of incomes as well as additional disclosures about selling expenses. We are required to comply with these new disclosure requirements beginning with our annual filing for 2027.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. We are required to comply with the updates beginning with our interim and annual filings for 2026. The adoption of ASU 2024-04 is not expected to impact our consolidated financial statements.

Forward-Looking Statements

This Form 10-K contains forward-looking statements relating to future events or future financial performance that are based on management’s current expectations, estimates, and projections. Words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words or expressions are intended to identify these forward-looking statements. Forward-looking statements are only predictions and involve risks, uncertainties, and assumptions. Certain factors, including but not limited to those identified under “Item 1A. Risk Factors” of this Form 10-K, may cause actual results to differ materially from current expectations, estimates, projections, and forecasts, and from past results. You should not place undue reliance on any forward-looking statements. We expressly disclaim any obligation to update these forward-looking statements other than as required by law.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Our exposure to changes in interest rates is associated with borrowings under our Revolving Credit Facility and our Term Loan, both of which are variable-rate debt. At December 31, 2024, no amounts were outstanding under our Revolving Credit Facility. In May 2021, we entered into two interest rate swap agreements to effectively convert $480.0 million of our term loan borrowings from a variable rate to a fixed rate through April 2025. These interest rate swaps are intended to mitigate the exposure to fluctuations in interest rates and qualify for hedge accounting treatment as cash flow hedges. A 100 basis point increase or decrease in interest rates as of December 31, 2024 would have an insignificant impact on our annual earnings.

Market Price Sensitive Instruments

As of December 31, 2024, we had outstanding debt related to our Convertible Senior Notes recorded on our consolidated balance sheet of $794.9 million, net of unamortized discount and issuance costs totaling $5.1 million. Changes in the fair value of our outstanding debt, which could be impacted by changes in interest rates, are not recorded in these consolidated financial statements as the debt is accounted for at cost less unamortized discount and issuance costs. The fair value of the Convertible Senior Notes, which was $1,018.8 million as of December 31, 2024, is also impacted by changes in our stock price.

In order to reduce potential equity dilution, in connection with the issuance of the Convertible Senior Notes, we purchased Capped Calls. We expect the Capped Calls to reduce the potential dilution to our common stock (or, in the event the conversion is settled in cash, to provide a source of cash to settle a portion of our cash payment obligation) if at the time of conversion our stock price exceeds the conversion price under the Convertible Senior Notes. The Capped Calls have an upper protection price of $335.90 per share and cover 3.5 million shares of common stock.

Foreign Currency Exchange Risk

Foreign currency risk arises from our investments in subsidiaries owned and operated in countries other than the United States. Such risk is also a result of transactions with customers in those countries. Approximately 25% of our revenue was denominated in foreign currencies for the year ended December 31, 2024. As our business in regions outside of the United States continues to increase, we will be increasingly exposed to foreign currency exchange risk related to our foreign operations. The cost of revenue related to revenue generated outside of the United States is primarily denominated in U.S. dollars; however, operating costs related to these revenues are largely denominated in the same respective currencies, thereby partially limiting our transaction risk exposure. Fluctuations in the rate of exchange between the United States dollar and foreign currencies, primarily the Euro, British pound and Malaysian ringgit, could affect our financial results, including our revenues, revenue growth rates, gross margins, operating income, and net income as well as assets and liabilities.

At December 31, 2024, we have intercompany receivables and payables from our foreign subsidiaries that are denominated in their functional currencies, principally the Chinese yuan renminbi. Fluctuations from the beginning to the end of a reporting period result in the revaluation of our foreign currency-denominated intercompany receivables and payables, generating currency translation gains or losses.

Net realized and unrealized gains (losses) from foreign currency transactions are included in other (expense) income, net in the consolidated statements of income and amounted to a loss of $2.3 million for the year ended December 31, 2024.

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Item 8. Financial Statements and Supplementary Data

Our financial statements as of December 31, 2024 and 2023 and for each of the three years in the period ended December 31, 2024, and the Report of the Registered Independent Public Accounting Firm are included in this report as listed in the index.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248) 42

Consolidated Balance Sheets as of December 31, 2024 and 2023 44

Notes to Consolidated Financial Statements 49

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Insulet Corporation

Opinions on the financial statements and internal control over financial reporting

We have audited the accompanying consolidated balance sheets of Insulet Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

Basis for opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Variable consideration – Rebates to pharmacy benefit managers

As described further in Note 2 to the financial statements, the Company provides for certain rebates for sales of its product through intermediaries. The Company estimates variable consideration related to rebates to pharmacy benefit managers in the United States when determining the transaction price at the time of sale. We identified the rebate estimate for pharmacy benefit managers as a critical audit matter.

The principal consideration for our determination that the rebate estimate related to pharmacy benefit managers is a critical audit matter was the high degree of auditor judgment in applying procedures to evaluate the significant estimation made by management. Management's estimate is based on historical experience adjusted for revenue growth, trends, and contract amendments.

Our audit procedures related to the rebate estimate included the following, among others;

•Evaluated the significant assumptions and the completeness and accuracy of the underlying data used in management’s calculation through inspection of source documents and agreement to other audited schedules.

•Performed retrospective analysis comparing actual rebates incurred to the previously estimated amounts.

•Tested the design and operating effectiveness of controls related to management’s estimate.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2016.

Boston, Massachusetts

February 20, 2025

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INSULET CORPORATION

CONSOLIDATED BALANCE SHEETS

As of December 31,

(in millions, except share and per share data) 2024 2023

ASSETS

Current Assets

Cash and cash equivalents $ 953.4 $ 704.2

Accounts receivable trade, net 252.5 240.2

Accounts receivable trade, net — related party 113.0 119.5

Prepaid expenses and other current assets 142.0 116.4

Property, plant and equipment, net 723.1 664.9

Other intangible assets, net 98.5 98.7

Deferred tax assets 141.8 $ 1.8

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accrued expenses and other current liabilities 423.8 373.7

Accrued expenses and other current liabilities — related party 1.0 8.9

Current portion of long-term debt 83.8 49.4

Commitments and contingencies (Note 18)

Stockholders’ Equity

Accumulated earnings (deficit) 40.3 (378.0)

Accumulated other comprehensive (loss) income (13.2) 8.0

Total liabilities and stockholders’ equity $ 3,087.7 $ 2,588.2

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

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INSULET CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31,

(in millions, except share and per share data) 2024 2023 2022

Selling, general and administrative expenses 917.2 734.9 587.8

Interest expense, net of portion capitalized (Note 9) (42.7) (36.2) (36.0)

Other (expense) income, net (5.5) 2.2 (1.1)

Income tax benefit (expense) 118.1 (8.3) (5.2)

Net income per share:

Weighted-average number of common shares outstanding (in thousands):

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

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INSULET CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31,

Other comprehensive (loss) income, net of tax

Foreign currency translation adjustment (7.8) 2.5 (10.3)

Unrealized (loss) gain on cash flow hedges (13.4) (14.2) 32.5

Unrealized loss on securities — (0.3) —

Other comprehensive (loss) income, net of tax (21.2) (12.0) 22.2

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

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INSULET CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(dollars in millions) Shares (in thousands) Amount

Exercise of options to purchase common stock 147 — 6.9 — — 6.9

Issuance of shares for employee stock purchase plan 53 — 9.4 — — 9.4

Stock-based compensation expense — — 40.9 — — 40.9

Net income — — — 4.6 — 4.6

Other comprehensive income — — — — 22.2 22.2

Exercise of options to purchase common stock 249 — 16.3 — — 16.3

Issuance of shares for employee stock purchase plan 55 — 10.6 — — 10.6

Stock-based compensation expense — — 48.3 — — 48.3

Other comprehensive loss — — — — (12.0) (12.0)

Exercise of options to purchase common stock 127 — 8.2 — — 8.2

Issuance of shares for employee stock purchase plan 78 — 11.9 — — 11.9

Stock-based compensation expense — — 69.3 — — 69.3

Other comprehensive loss, net of tax — — — — (21.2) (21.2)

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

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INSULET CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,

Cash flows from operating activities

Stock-based compensation expense 69.3 48.3 40.9

Non-cash interest expense 7.3 6.7 5.8

Provision for credit losses (0.2) 2.3 4.2

Unrealized loss (gain) on investments 3.8 (2.6) —

Changes in operating assets and liabilities:

Accounts receivable — related party 6.5 (54.8) (38.9)

Prepaid expenses and other assets (21.9) (42.1) (36.8)

Accrued expenses and other liabilities 53.4 73.8 133.9

Accrued expenses and other liabilities — related party (7.9) (3.5) 3.7

Cash flows from investing activities

Investments in developed software (9.1) (8.5) (12.9)

Cash paid for investments (12.2) (7.2) (7.8)

Acquisition of other intangible assets — (25.1) (21.5)

Acquisition of a business — (3.0) (26.0)

Net cash used in investing activities (146.2) (119.4) (191.1)

Cash flows from financing activities

Proceeds from issuance of term loan, net of issuance costs 130.0 — —

Repayment of term loan (137.2) (5.0) (5.0)

Repayment of equipment financings (19.0) (19.8) (17.4)

Financing lease payments (22.7) — (15.3)

Repayment of mortgage (2.4) (2.2) (2.1)

Proceeds from secured borrowing (Note 6) 45.5 — —

Repayment of secured borrowing (Note 6) (34.8) — —

Proceeds from exercise of stock options 8.2 16.3 6.9

Other — (0.3) —

Net cash used in financing activities (28.1) (13.6) (40.3)

Effect of exchange rate changes on cash (6.8) 1.8 (4.3)

Cash, cash equivalents, and restricted cash, beginning of year 704.2 689.7 806.4

Cash, cash equivalents, and restricted cash, end of year $ 953.4 $ 704.2 $ 689.7

Supplemental cash flow information (Notes 14 and 24)

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

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INSULET CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of the Business

Insulet Corporation (the “Company”) is primarily engaged in the development, manufacture, and sale of its proprietary continuous insulin delivery system for people with insulin-dependent diabetes. The Company generates most of its revenue from sales of its Omnipod products. The Omnipod platform includes: Omnipod® 5 and its predecessors Omnipod DASH and Classic Omnipod. Each product features a small, lightweight, self-adhesive disposable tubeless Omnipod device (“Pod”) that the user fills with insulin and wears directly on the body for up to three days at a time, which delivers personalized doses of insulin and eliminates the need for multiple daily injections using syringes or insulin pens or the use of pump and tubing. Omnipod 5, which builds on the Omnipod DASH mobile platform, is a tubeless automated insulin delivery system, that integrates with a continuous glucose monitor (“CGM”) to manage blood sugar and is fully controlled by a compatible personal smartphone or Omnipod 5 Controller. The CGM is sold separately by third parties. Omnipod DASH features a secure Bluetooth enabled Pod that is controlled by a smartphone-like Personal Diabetes Manager (“PDM”) with a color touch screen user interface. Following the launch of Omnipod 5, the Company began phasing-out Classic Omnipod.

The Company’s Omnipod products are currently sold in the United States, Europe, Canada, the Middle East, and Australia either indirectly through intermediaries or directly to end-users. Intermediaries include wholesalers who sell the Company’s product to end-users through the pharmacy channel in the United States and independent distributors who resell Omnipod products to end-users. Substantially all of the Company’s Drug Delivery revenue consists of sales of pods to Amgen for use in the Neulasta® Onpro® kit, a delivery system for Amgen’s Neulasta to help reduce the risk of infection after intense chemotherapy.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements reflect the consolidated operations of Insulet Corporation and its subsidiaries. The consolidated financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Foreign Currency Translation

The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using exchange rates as of the balance sheet date, while income and expenses of foreign subsidiaries are translated using the average exchange rates in effect for the related month. The net effect of these translation adjustments is reported in accumulated other comprehensive income (loss) within stockholders’ equity on the consolidated balance sheets. Net realized and unrealized losses from foreign currency transactions are included in other (expense) income, net in the consolidated statements of income and were $2.3 million, $0.4 million and $1.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents may include money market mutual funds, commercial paper, and U.S. government and agency bonds, that are carried at cost.

Certain of the Company’s subsidiaries participate in a multi-currency, notional cash pooling arrangement with a third-party bank provider to manage global liquidity requirements. Under this arrangement, cash deposited by participating subsidiaries may be in positive or negative cash positions to the extent the overall balance in the cash pool is at least zero. The net cash balance of the notional cash pooling arrangement is included within cash and cash equivalents in the consolidated balance sheets and was insignificant at both December 31, 2024 and 2023.

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Investments

The Company has investments in equity securities of privately held companies, in which the Company’s interest is less than 20%, the Company does not exercise significant influence over the investee, and the investment does not have a readily determinable fair value. These investments are carried at cost less impairment, if any. If an observable price change in orderly transactions for the identical or similar investment in the same issuer is identified, the investment is measured at its fair value as of the date that the observable transaction occurred with the adjustments reflected in other (expense) income, net in the Company’s consolidated statements of income. Investments in equity securities are recorded within other assets on the consolidated balance sheets.

The Company also has investments in debt securities of privately held companies, which are either classified as available-for-sale securities or for which the Company has elected the fair value option. The available-for-sale securities are recorded at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity on the consolidated balance sheets. The other investment is a debt security that contains embedded derivatives. Unrealized gains and losses for this investment are recorded as a component of other (expense) income, net in the consolidated statements of income. Investments in debt securities are recorded within other assets on the consolidated balance sheets.

The Company may also invest in marketable securities, including term deposits, commercial paper, U.S. government and agency bonds, and corporate bonds, which are classified as available-for-sale and carried at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity on the consolidated balance sheets. Investments with a stated maturity date of more than one year from the balance sheet date and that are not expected to be used in current operations are classified as long-term investments within other assets on the consolidated balance sheets. The Company reviews investments for other-than-temporary impairment when the fair value of an investment is less than its amortized cost. If an available-for-sale security is other than temporarily impaired, the loss is included in other (expense) income, net in the consolidated statements of income.

Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable consist of amounts due from intermediaries, third-party payors, and customers and are presented at amortized cost. The allowance for credit losses reflects an estimate of losses inherent in the Company’s accounts receivable portfolio determined based on historical experience, specific allowances for known troubled accounts, and other available evidence. Accounts receivable are written off when management determines they are uncollectible.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

Direct Customer Receivables—The Company measures expected credit losses on direct customer receivables using an aging methodology. The risk of loss for direct customer receivables is higher than other portfolios. The Company relies on third-party payors to accept and timely process claims and on direct consumers to have the ability to pay. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.

Distributor Receivables—The Company measures expected credit losses on distributor receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers payment history and the financial condition of the distributors.

National Healthcare System Receivables—The Company measures expected credit losses on national healthcare system receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.

Inventories

Inventories are stated at the lower of cost or net realizable value, with cost determined under the first-in, first-out method. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow-moving based on changes in customer demand, technology developments, or other economic factors in order to state inventories at net realizable value. Factors influencing these adjustments include inventories on hand compared to estimated future usage and sales.

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Contract Acquisition Costs

The Company incurs commission costs to obtain a contract related to new customer starts. These costs are capitalized as contract assets in other assets on the consolidated balance sheet, net of the short-term portion included in prepaid expenses and other current assets. Costs to obtain a contract are amortized to selling, general and administrative expense on a straight-line basis over the expected period of benefit, which considers future product upgrades. These costs are periodically reviewed for impairment.

Derivative Instruments

The Company is exposed to certain risks relating to its business operations. Risks that relate to interest rate exposure are managed by using interest rate swaps. The Company recognizes derivative instruments as either assets or liabilities at fair value on the consolidated balance sheet. Changes in a derivative financial instrument’s fair value are recognized in earnings unless specific hedge criteria are met, in which case changes in fair value are recognized as adjustments to other comprehensive income. The Company has designated its interest rate swap contracts as cash flow hedges. Additional information on the Company’s derivative instruments is included in Note 17 and fair values are included in Note 16.

Fair Value Measurements

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.

Judgement is involved in estimating inputs, such as discount rates, used in Level 3 fair value measurements. Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized.

Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other current liabilities, are carried at cost, which approximates their fair value because of their short-term maturity.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation. Major improvements are capitalized, while routine repairs and maintenance are expensed as incurred. Depreciation for property, plant and equipment, other than land and construction in progress, is based upon the following estimated useful lives using the straight-line method:

Building and building improvements 20 to 39 years

Leasehold improvements Lesser of lease term or useful life of asset

Machinery and equipment 2 to 15 years

Furniture and fixtures 3 to 5 years

The Company assesses the recoverability of assets whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. The Company recognizes an impairment loss if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows. The impairment loss is measured as the difference between the carrying amount and the fair value of the asset.

Business Combinations

The Company recognizes the assets and liabilities assumed in business combinations based on their estimated fair values at the date of acquisition. The Company allocates the purchase price in excess of net tangible assets acquired to identifiable intangible assets. The Company assesses the fair value of assets, including intangible assets, using a variety of methods and each asset is measured at fair value from the perspective of a market participant. Assets recorded from the perspective of a market participant that are determined to not have economic use for the Company are expensed immediately. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Transaction costs and restructuring costs associated with a business combination are expensed as incurred.

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Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to assets and liabilities assumed in a business combination. The Company performs an assessment of its goodwill for impairment annually on October 1 or whenever events or changes in circumstances indicate there might be impairment. Goodwill is evaluated for impairment at the reporting unit level.

The Company may assess its goodwill for impairment initially using a qualitative approach to determine whether conditions exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. If management concludes, based on its assessment of relevant events, facts, and circumstances that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis will be performed to determine if there is any impairment. Alternatively, the Company may elect to initially perform a quantitative analysis instead of starting with a qualitative analysis. The Company would record an impairment loss to the extent that the carrying value of the reporting unit’s goodwill exceeds its fair value.

Intangible assets acquired in a business combination are recorded at fair value, while intangible assets purchased or software developed for internal-use are recorded at cost and are stated at cost less accumulated amortization. Intangible assets with finite useful lives are amortized based on the pattern in which the economic benefits of the assets are estimated to be consumed over the following estimated useful lives of the assets:

Customer relationships 14 years

Internal-use software 3 to 5 years

Developed technology 13 to 15 years

Patents 8 to 15 years

Amortization expense is included in selling, general and administrative expenses in the consolidated statement of income. The Company reviews intangible assets for impairment by comparing the fair value of the assets, estimated using an income approach, with their carrying value. If the carrying value exceeds the fair value of the intangible asset, the Company recognizes an impairment equal to the difference between the carrying value of the asset and the present value of future cash flows. The Company assesses the remaining useful life and the recoverability of intangible assets whenever events or circumstances indicate that the carrying value of an asset may not be recoverable using undiscounted cash flows.

Cloud Computing Arrangements

Cloud computing arrangements includes services used to support certain internal corporate functions as well as technology platforms that support commercial initiatives. The Company capitalizes costs incurred to implement cloud computing arrangements that are service contracts within other current and non-current assets and amortizes such costs over the expected term of the hosting arrangement using the straight-line method to the same income statement line as the associated cloud operating expenses. The Company assesses the recoverability of capitalized implementation costs in accordance with the policy disclosed under Property, Plant and Equipment.

Leases

The Company determines if an arrangement includes a lease at inception. At lease commencement, the Company recognizes lease liabilities equal to the present value of the future lease payments and lease assets representing the right to use the underlying asset throughout the lease term. The Company uses an incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments, when the implicit rate is not readily determinable. The Company’s incremental borrowing rate reflects a secured rate that considers the term of the lease, the nature of the underlying asset and the economic environment. Lease terms may include options to extend and/or terminate the lease. These options are included in the lease term when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. Right-of-use assets are calculated as the initial measurement of the lease liability plus lease payments made prior to lease commencement and initial direct costs incurred, less lease incentives received. The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheet and does not separate lease and non-lease components.

Loss Contingencies

The Company records a liability on the consolidated balance sheet for loss contingencies when a loss is considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. Legal costs associated with loss contingencies are expensed as incurred.

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Product Warranty

The Company provides afour-year warranty on its Controllers and PDMs Controllers sold in the United States and Europe and a five-year warranty on PDMs sold in Canada and may replace Pods that do not function in accordance with product specifications. The Company estimates its warranty obligation at the time the product is shipped based on historical experience and the estimated cost to service the claims. Costs to service the claims reflect the current product cost, reclaim costs, shipping and handling costs and direct and incremental distribution and customer service support costs. Since the Company continues to introduce new products and versions, the anticipated performance of the product over the warranty period is also considered in estimating warranty reserves. Warranty expense is recorded in cost of revenue in the consolidated statements of income.

Revenue Recognition

The Company generates revenue from the sale of its Controller/PDM and Pods. We generally recognize revenue when control is transferred to our customers in an amount that reflects the net consideration to which we expect to be entitled. In determining how revenue should be recognized, a five-step process is used, which includes identifying performance obligations in the contract, determining whether the performance obligations are separate, allocating the transaction price to each separate performance obligation, estimating the amount of variable consideration to include in the transaction price, and determining the timing of revenue recognition for separate performance obligations.

•Contracts and Performance Obligations. The Company generally considers customer purchase orders, which in most cases are governed by agreements with distributors or third-party payors, to be contracts with a customer. The Company considers the obligation to transfer the Controller/PDM, the initial and subsequent quantity of Pods ordered, and product training, each of which are distinct, to be separate performance obligations.

•Transaction Price. Transaction price for the Controller/PDM and Pods reflects the net consideration to which the Company expects to be entitled. The prices charged depend on the Company’s pricing as established with third-party payors and intermediaries. Variable consideration is estimated at the outset of the contract and includes, but is not limited to reductions for: consideration payable to customers, such as rebates, chargebacks, and administrative fees paid to distributors; product returns provision; prompt payment discounts; and various other promotional or incentive arrangements. If a contract contains more than one performance obligation, the transaction price is allocated to each performance obligation based on relative standalone selling price.

•Rebates. The Company is subject to rebates on pricing programs with managed care organizations, such as pharmacy benefit managers, governmental and third-party commercial payors, primarily in the United States. The Company estimates provisions for rebates primarily based on historical experience, revenue growth, distribution channel lag, and known events or trends.

•Chargebacks. The Company participates in chargeback programs in the United States, under which pricing on products below negotiated list prices is provided to participating entities. Distributors selling to participating entities receive a chargeback equal to the difference between their acquisition cost and the lower negotiated price. The Company estimates provisions for chargebacks primarily based on historical experience on a program basis and current contract prices.

•Administrative fees paid to distributors. The Company pays administrative fees to certain distributors, which is generally based on a fixed percentage multiplied by either gross purchases from Insulet or gross sales of Insulet products sold by the distributor. These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price. The Company accrues for these fees based on gross sales and contractual fee rates negotiated with the customer.

•Product Returns. The Company estimates product returns provision primarily based on historical experience by applying a historical return rate to the amounts of revenue estimated to be subject to returns. Additionally, the Company considers other specific factors such as the estimated shelf life of inventory in the distribution channel and changes to customer terms.

•Discounts. The Company provides customers with prompt payment discounts, which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The Company estimates prompt payment discount accruals based on actual gross sales and contractual discount rates.

•Other Arrangements. Other incentive or promotional arrangements may be offered to customers, including but not limited to copayment assistance for users with commercial insurance. We record a provision for the incentive earned based on the number of estimated claims and our estimate of the cost per claim related to product sales that have been recognized as revenue.

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•Revenue Recognition. The Company records revenue upon transfer of control of the product to the customers, which is generally when the product is shipped or delivered and title passes to the customer. Revenue from product training is recognized in the period it is provided. The Company records deferred revenue if a customer pays consideration, or the Company has the right to invoice, before the Company transfers a good or service to a customer. Deferred revenue primarily represents product training as there is generally a lag between when the customer is billed and when the end-user receives training.

The Company’s Drug Delivery product line includes sales of a modified version of the Pod to pharmaceutical and biotechnology companies who use the Company’s technology as a delivery method for their drugs. For the majority of this product line, revenue is recognized, with an associated unbilled receivable, as the product is produced pursuant to the customer’s firm purchase commitments. The Company has an enforceable right to payment for performance completed to date and the inventory has no alternative use to the Company. The Company recognizes revenue over time using a blend of costs incurred to date relative to total estimated costs at completion and time incurred to date relative to total production time to measure progress toward the satisfaction of its performance obligations. The Company believes that both incurred cost and elapsed time reflect the value generated, which best depicts the transfer of control to the customer. Contract costs include third-party costs as well as an allocation of manufacturing overhead.

Research and Software Development Costs

Internal research and development costs are expensed as incurred. Research and development expenses include salary and benefits, allocated overhead and occupancy costs, clinical trial and related clinical manufacturing costs, contract services, and other costs.

Costs incurred in the research, design, and development of software embedded in products to be sold to customers are charged to expense until technological feasibility of the ultimate product to be sold is established. The Company’s policy is that technological feasibility is achieved when a working model, with the key features and functions of the product, is available for customer testing. Software development costs incurred after the establishment of technological feasibility and until the product is available for general release are capitalized, provided recoverability is reasonably assured. Capitalized software development costs are amortized over their estimated useful life and recorded within cost of revenue.

Shipping and Handling Costs

The Company does not typically charge its customers for shipping and handling costs associated with shipping its product to its customers unless non-standard shipping and handling services are requested. These shipping and handling costs are included in selling, general and administrative expenses and were $16.3 million, $12.4 million, and $12.8 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Advertising Costs

The Company expenses advertising costs as they are incurred. Advertising costs are included in selling, general and administrative expenses and were $84.3 million, $63.1 million, and $41.2 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Stock-Based Compensation Expense

The Company measures stock-based compensation on the grant date based on the fair value of the award and recognizes the compensation expense over the requisite service period, which is generally the vesting period. The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect in the years in which the differences are expected to reverse. The Company reviews its deferred tax assets for recoverability by considering all available positive and negative evidence, including historical profitability, projected future taxable income, and the expected timing of the reversals of existing temporary differences and tax planning strategies. A valuation allowance is provided to reduce the deferred tax assets if, based on the available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The effect of a change in enacted tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Interest and penalties are classified as a component of income tax expense.

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Concentration Risk

Credit Risk—Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents and accounts receivable. The Company maintains most of its cash and investments in money market funds with a limited number of financial institutions that have a high investment grade credit rating. See Notes 4and 6 for customer concentration.

Supply Risk—The Company uses different types of semiconductor chips, which are sourced from external suppliers, in the manufacturing of its products. While the Company has multiple suppliers of semiconductor chips, each type is typically sourced from a single supplier. Supply chain disruptions, supplier shortages, logistic delays, or quality problems could result in manufacturing delays, increased costs, or a possible loss of sales, which could adversely affect operating results.

Recently Adopted Accounting Standards

Segment Reporting—The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures during the fourth quarter of 2024. ASU 2023-07 requires incremental disclosures on reportable segments, primarily significant segment expenses. The required disclosures are included in Note 3.

Convertible Debt—Effective January 1, 2022, the Company adopted ASU 2020-06, Debt – Debt With Conversion and Other Options(Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity using the modified retrospective method for convertible debt instruments outstanding as of the date of adoption. Under ASU 2020-06, a convertible debt instrument is generally reported as a single liability at its amortized cost with no separate accounting for embedded conversion features. Consequently, the effective interest rate of convertible debt instruments is closer to the coupon interest rate under this guidance. The cumulative effect of adopting ASU 2020-06 resulted in a $207.7 million decrease to the opening balance of additional paid-in-capital upon adoption resulting from the derecognition of the embedded conversion feature and debt issuance costs bifurcated to equity, a $60.6 million decrease to the opening balance of accumulated deficit representing the cumulative interest expense recognized related to the amortization of the bifurcated conversion option and debt issuance costs, and a $147.1 million increase in long-term debt resulting from the derecognition of the discount associated with the embedded conversion feature, offset by the remaining debt issuance costs reclassified out of equity. In addition, the Company wrote-off the related deferred tax liabilities with a corresponding adjustment to the valuation allowance, resulting in no net impact to the cumulative adjustment recorded to accumulated deficit. Adoption of this standard had no impact on the Company’s diluted earnings per share as the Company historically calculated earnings per share using the if-converted method.

Reference Rate Reform—ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Reporting and ASU 2021-01, Reference Rate Reform (Topic 848) – Scope allow companies to elect optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform (e.g., discontinuation of the London Interbank Offered Rate (“LIBOR”)) if certain criteria are met. During the fourth quarter of 2022, the Company elected to apply optional expedients for contract modifications to all eligible debt instruments and hedging relationships affected by the transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”). Accordingly, the Company did not have to assess whether the contract modification should be accounted for as a debt extinguishment. Additionally, the Company was not required to de-designate hedging relationships when the contractual terms changed. The adoption of these standards had no impact on our consolidated financial statements.

Note3. Segment and Geographic Data

As described in Note 1,the Company’s product offering primarily consists of the Omnipod platform and drug delivery device based on the Omnipod platform. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company has concluded that its Chief Executive Officer (“CEO”) is the CODM as the CEO is the ultimate decision maker for key operating decisions, determining the allocation of resources and assessing the financial performance of the Company. The Company operates under one reportable segment. While decisions, allocations, and assessments are performed by the CODM using consolidated operating income, net income is also provided to the CODM.

Geographic information about revenue, based on customer location, is as follows:

Years Ended December 31,

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The following table presents selected financial information for the Company’s single operating segment, including significant expenses:

Years Ended December 31,

Interest expense, net (3.2) (7.6) (26.7)

Other (expense) income, net (5.5) 2.2 (1.1)

Income tax benefit (expense) 118.1 (8.3) (5.2)

(1) Consists of raw materials utilized included in cost of revenue.

(2) Consists of manufacturing labor, factory overhead and depreciation of plant and equipment primarily at our Acton manufacturing plant.

(3) Consists of depreciation and amortization included in cost of revenue, except for depreciation of plant and equipment included in factory conversion as described in Note 2.

(4) Consists primarily of warranty expense, cost to manufacture Controllers/PDMs, provision for inventory reserves, cost of data plans and licensing, and costs to train users.

(5) Consists of labor expenses included in research and development expenses and selling, general and administrative expenses, excluding stock-based compensation expense.

(6) Consists primarily of contract labor and professional and consulting fees.

(7) Consists primarily of advertising expense, license fees, stock-based compensation expense and travel and expenses.

Geographic information about long-lived assets, net, excluding goodwill and other intangible assets is as follows:

As of December 31,

Total long-lived assets, net $ 723.1 $ 664.9

Note 4. Revenue and Contract Acquisition Costs

The following table summarizes the Company’s disaggregated revenue:

Years Ended December 31,

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The percentages of total revenue for customers that represent 10% or more of total revenue was as follows:

Years Ended December 31,

Deferred revenue related to unsatisfied performance obligations was included in the following consolidated balance sheet accounts in the amounts shown:

As of December 31,

Accrued expenses and other current liabilities $ 12.0 $ 15.4 $ 16.1

Revenue recognized from amounts included in deferred revenue at the beginning of each respective period was as follows:

As of December 31,

Deferred revenue recognized $ 15.4 $ 16.0 $ 2.1

Contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:

As of December 31,

Prepaid expenses and other current assets $ 20.1 $ 16.6

Total capitalized contract acquisition costs, net $ 60.9 $ 48.6

The Company recognized $18.2 million, $16.3 million, and $14.6 million of amortization of capitalized contract acquisition costs for the years ended December 31, 2024, 2023, and 2022, respectively.

Note 5. Related Party Transactions

The spouse of one of the members of the Company’s Board of Directors is an executive officer of one of the Company’s distributors. The terms of the distribution agreement are consistent with those prevailing at arm’s length. The Company recorded $587.8 million, $473.7 million and $249.9 million of net revenues from the distributor for the years ended December 31, 2024, 2023, and 2022, respectively.

Related party transactions recorded on the consolidated balance sheets were as follows:

As of December 31,

Distribution fees payable(1) $ — $ 6.1

Deferred revenue(1) $ 1.0 $ 2.8

(1) Balances are included in accrued expenses and other current liabilities.

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Note 6. Accounts Receivable

Accounts receivable were comprised of the following:

As of December 31,

The percentages of total net accounts receivable trade for customers that represent 10% or more of total net accounts receivable trade were as follows:

As of December 31,

Distributor A 35% 35%

Distributor B 27% 25%

Distributor C 15% 18%

The following table presents the activity in the allowance for credit losses:

Years Ended December 31,

Credit losses at beginning of year $ 2.5 $ 2.5 $ 2.7

Provision for expected credit losses (0.2) 2.3 4.2

Write-offs charged against allowance (0.9) (2.6) (4.9)

Recoveries of amounts previously reserved — 0.3 0.5

Credit losses at end of year $ 1.4 $ 2.5 $ 2.5

The Company outsources the insurance claim submissions process to a third-party service provider in one country in which it operates. Under this agreement, the Company transfers certain receivables in exchange for cash in advance. If the third-party service provider is unable to collect on the transferred receivables, the third-party service provider has recourse to the Company. This arrangement is accounted for as a secured borrowing with a pledge of collateral as the transfer does not meet the criteria for sale accounting. Receivables pledged as collateral of $12.2 million are included in accounts receivable on the consolidated balance sheet as of December 31, 2024. Liabilities associated with the secured borrowings of $12.2 million are included within accrued expenses and other current liabilities in the consolidated balance sheet as of December 31, 2024. No amounts were outstanding as of December 31, 2023. The classification within current liabilities is based on the expected resolution of the underlying receivables. The proceeds from and repayments of secured borrowings are reflected as cash flows provided by (used in) financing activities in the consolidated statement of cash flows.

Note 7. Inventories

Inventories were comprised of the following:

As of December 31,

Following the strategic decision to not move forward with the commercialization of Omnipod GO, the Company recorded a charge of $13.5 million related to certain inventory components that it no longer expected to utilize, which is included in cost of revenue in the consolidated statement of income for the year ended December 31, 2024.

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Note 8. Cloud Computing Costs

Capitalized costs to implement cloud computing arrangements at cost and accumulated amortization were as follows:

As of December 31,

Short-term portion $ 31.7 $ 26.4

Total capitalized implementation costs 167.0 143.3

Less: accumulated amortization (62.4) (36.6)

Capitalized implementation costs, net $ 104.6 $ 106.7

Amortization expense is recognized on a straight-line basis over the expected term of the hosting arrangements, which range from three to ten years. Amortization expense was $26.8 million, $20.3 million, and $12.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Note 9. Property, Plant and Equipment, Net

Property, plant and equipment at cost and accumulated depreciation were as follows:

As of December 31,

Building and building improvements 226.8 205.3

Furniture and fixtures 20.8 18.1

Leasehold improvements 16.4 16.0

Property, plant and equipment, gross 1,085.5 958.1

Less: accumulated depreciation (362.4) (293.2)

Property, plant and equipment, net $ 723.1 $ 664.9

Capitalized interest expense was $1.5 million, $1.6 million, and $1.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. Depreciation expense related to property and equipment was $71.0 million, $62.6 million, and $56.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. Construction in process primarily consists of equipment and tooling expected to be placed into service during 2025.

Note 10. Business Combination

On January 3, 2022, the Company acquired substantially all of the assets related to the manufacture and production of shape-memory alloy wire assemblies that are used in the production of Pods from Dynalloy, Inc., a maker of dynamic alloys. The aggregate purchase price was $29.0 million, of which $26.0 million was paid in cash upon closing, and the remaining $3.0 million was paid in January 2023. Transaction costs were expensed as incurred and were not material. The following table summarizes the fair value allocation of the assets acquired at the date of acquisition:

(in millions)

Inventories $ 0.5

Property, plant and equipment 0.9

Other assets 0.2

Goodwill (tax deductible) 12.0

Developed technology (15 year useful life) 15.4

Total assets acquired $ 29.0

The primary factor that contributed to an acquisition price in excess of the fair value of assets acquired and the establishment of goodwill was the expected cost savings resulting from the integration of a supplier.

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Note 11. Goodwill and Other Intangible Assets, Net

Goodwill

The change in the carrying amount of goodwill for the period is as follows:

Years Ended December 31,

Goodwill at beginning of the year $ 51.7 $ 51.7

Foreign currency translation (0.2) —

Goodwill at end of the year $ 51.5 $ 51.7

Intangible Assets, Net

The gross carrying amount, accumulated amortization and net book value of intangible assets at the end of each period were as follows:

As of December 31,

Amortization expense for intangible assets was $9.8 million, $10.2 million, and $7.2 million for the years ended December 31, 2024, 2023, and 2022, respectively.

In February 2023, the Company paid Bigfoot Biomedical, Inc. $25.1 million, including transaction costs, to acquire patent assets related to pump-based automated insulin delivery technologies. The acquired patent assets have a useful life of 11 years.

Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheet as of December 31, 2024 is expected to be as follows:

Years Ending December 31, (in millions)

Note 12. Investments

Equity Securities

In 2024, the Company made a strategic investment in equity securities of a privately held entity in the amount of $12.0 million. As of December 31, 2024 and 2023, the total carrying value of the Company’s investments in equity securities without readily determinable fair values was $21.9 million and $9.7 million, respectively. There were no unrealized gains or losses recorded due to changes in the fair value of equity investments during the years ended December 31, 2024 and 2022, and the unrealized gain recorded was insignificant for the year ended December 31, 2023. Refer to “Assets Measured at Fair Value on a Non-Recurring Basis” in Note 16 for disclosures regarding equity securities without readily determinable fair values.

Debt Securities

In 2023, the Company made a strategic investment in debt securities of a privately held entity in the amount of $5.0 million, which is included in other assets on the consolidated balance sheets. The debt securities mature in December 2026, unless converted earlier. The amortized cost basis of the debt securities was $5.0 million at both December 31, 2024 and December 31, 2023. The amount of interest earned on the investment for the years ended December 31, 2024 and 2023 was insignificant. Refer to Note 16 for the fair values.

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Other

In 2023, the Company made a strategic investment in a privately held entity in the amount of $2.0 million. The investment is a debt security with embedded derivatives and is accounted for by applying the fair value option, as this approach best reflects the underlying economics of the transaction. The fair value of the investment is calculated using a combination of the market approach and income approach methodologies and is reported within other assets on the consolidated balance sheet. Refer to Note 16 for the fair values and unrealized losses recorded.

Note 13. Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities were as follows:

As of December 31,

Employee compensation and related costs 142.8 122.0

Professional and consulting services 51.6 34.1

Liability associated with secured borrowings 12.2 —

Accrued expenses and other current liabilities $ 423.8 $ 373.7

Product Warranty Costs

Reconciliations of the changes in the Company’s product warranty liability were as follows:

Years Ended December 31,

Product warranty liability at beginning of year $ 10.3 $ 62.1 $ 6.8

Product warranty liability at end of year $ 13.9 $ 10.3 $ 62.1

In 2022, the Company issued two voluntary medical device correction notices (“MDCs”), one for its Omnipod DASH PDM relating to its battery and the other for its Omnipod 5 Controller relating to its charging port and cable. The Company initially accrued an estimated liability of $68.9 million related to these MDCs, which was subsequently revised by $11.0 million due to significantly fewer customers requesting a replacement Omnipod DASH PDM prior the Company’s updated PDM being available, resulting in a net charge of $57.9 million for the year ended December 31, 2022. During the year ended December 31, 2023, the Company further revised the estimated liability for these MDCs by 11.5 million. This change in estimate primarily resulted from lower shipping costs for replacement DASH PDMs and lower expected distribution costs for Omnipod 5 Controllers. The liability related to the MDCs included in product warranty liability at December 31, 2023 was insignificant and no amount was remaining as of December 31, 2024.

Note 14. Leases

As of December 31, 2024, the Company leased certain automobiles and facilities for offices, laboratories, manufacturing, and warehousing, all of which were classified as operating leases. Certain of the Company’s operating leases include escalating rental payments, some include the option to extend for up to 10 years, and some include options to terminate the leases at certain times within the lease term. In 2023, the Company also leased land and a manufacturing building in Malaysia, which were classified as finance leases until the Company exercised its option to purchase this property for $18.1 million in 2024.

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Lease assets and lease liabilities were included in the following consolidated balance sheet accounts in the amounts shown:

Years Ended December 31,

Operating leases

Operating lease asset:

Operating lease liabilities:

Accrued expenses and other current liabilities $ 2.1 $ 3.5

Total operating lease liabilities $ 42.1 $ 33.0

Finance leases

Finance lease assets:

Property, plant and equipment, net $ — $ 37.8

Finance lease liabilities:

Current portion of long-term debt and finance leases $ — $ 22.9

The Company’s operating and financing lease cost was as follows:

Years Ended December 31,

Operating lease cost $ 7.3 $ 8.8 $ 8.8

Finance lease cost:

Amortization of leased assets 0.7 0.4 —

Interest on lease liabilities 1.0 0.6 —

Total finance lease cost 1.7 1.0 —

Total operating and financing lease cost $ 9.0 $ 9.8 $ 8.8

Supplemental cash flow information related to leases is as follows:

Years Ended December 31,

Right-of-use assets obtained in exchange for lease liabilities

Finance lease $ — $ 22.3 $ —

Cash paid for finance lease included in operating cash flows $ 1.1 $ — $ —

Cash paid for finance lease included in financing cash flows $ 22.7 $ — $ —

Maturities of lease liabilities as of December 31, 2024 are as follows:

Years Ending December 31, (in millions)

Total future minimum lease payments 67.6

Less: imputed interest (25.5)

Present value of future minimum lease payments $ 42.1

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As of December 31, 2024, the weighted average remaining lease term for operating leases was 11.4 and the weighted-average discount rate used to determine the operating lease liability was 8.1%.

Note 15. Debt

The components of debt consisted of the following:

Revolving Credit Facility 2028 — —

Finance lease obligation(1) — 22.9

Less: current portion 83.8 49.4

(1) Refer to Note 14 for information regarding finance lease obligation.

Equipment Financings

The Company has two outstanding loans secured by manufacturing lines located at the Company’s Acton, Massachusetts manufacturing facility. Additionally, in May 2023, the Company entered into an arrangement under which the Company may obtain up to $24.0 million of financing for manufacturing equipment. The Company is involved in the construction of the manufacturing equipment; accordingly, it is included in property, plant and equipment on the consolidated balance sheets. The Company’s obligation reflects payments made to date by the third-party bank to the equipment manufacturer, net of discount and less repayment of principal. The financing obligation will mature 36 months following completion of construction.

Mortgage

The Company has an outstanding loan that is secured by the Company’s Acton, Massachusetts headquarters. The Mortgage contains non-financial customary covenants, none of which are considered restrictive to the Company’s operations.

Convertible Senior Notes