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

You should read the following discussion and analysis together with the “Consolidated Financial Statements and Supplementary Data” in Part II, Item 8 of this Annual Report. The following discussion contains forward-looking statements, which statements are subject to considerable risks and uncertainties. For additional information, see “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Annual Report.

A discussion of changes in our results of operations during the year ended December 31, 2024 compared with the year ended December 31, 2023 has been omitted from this Annual Report on Form 10-K but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 26, 2025, which discussion is incorporated herein by reference and which is available free of charge on the SEC’s website at www.sec.gov.

Overview

We are a global insulin delivery and diabetes technology company focused on the design, development and commercialization of technology solutions that reduce the burden of diabetes management. We serve approximately 500,000 people living with diabetes in more than 25 countries worldwide. We consider our primary addressable market to be people living with type 1 diabetes and in 2025, began expanding our addressable market to include people living with type 2 diabetes who require intensive insulin therapy. Our goal is to address the individual needs of people with insulin-dependent diabetes and their care team, by offering flexibility and choice in intelligent insulin delivery systems, through an accessible portfolio of market-leading pumps, applications, and insights.

Through our portfolio approach, we offer people living with diabetes a choice in their therapy management system based on their individual needs and preferences. In support of this strategy, our portfolio includes both the t:slim X2 and Mobi insulin pumps. The Tandem Mobi insulin pump is the world’s smallest durable automated insulin delivery (AID) system. At approximately half the size of our t:slim X2 pump, Mobi is designed for people who seek even greater discretion and flexibility, and includes features such as expanded pump-control from a mobile application, inductive charging, and an on-pump button that can be used for bolusing and other actions. In 2024, we expanded our portfolio with the commercial availability of Mobi with iOS control in the United States. In May 2025, we received CE Mark approval for the Tandem Mobi insulin delivery system with Control-IQ+ technology. In December 2025, we further expanded the availability of Mobi to Android users in the United States. We are pursuing additional regulatory and pre-commercial activities, such as securing in-country registrations and reimbursement, before launching Mobi internationally.

The vast majority of our customers use their insulin pump with CGM integration. This allows their insulin pump to receive CGM sensor readings, which can then be used in our AID algorithms, including our Control-IQ+ technology. Control-IQ+ is an advanced hybrid-closed loop feature designed to help increase a user’s time in their targeted glycemic range. Multiple studies, including four publications in the New England Journal of Medicine,the most recent appearing in March 2025, demonstrate that both Control-IQ+ technology and its predecessor, Control-IQ technology, are associated with improved, immediate and sustained clinical outcomes for people living with type 1 or type 2 diabetes across diverse demographics.

The t:slim X2 was the first pump in the industry on which remote software updates were made commercially available in the United States and is now also available in the countries we serve worldwide. This feature allows our customers to update their pump software independently. We believe this offering is a competitive advantage, allowing us to bring our customers clinical and lifestyle enhancements within their warranty cycle without having to purchase a new pump. These enhancements generally include new developments in our AID technology, CGM integrations and mobile app features.

For more than a decade we have offered our customers, their caregivers and healthcare providers a data management application to provide a fast, easy and visual way to display diabetes therapy management data from our pumps and integrated CGMs. Since the launch of Tandem Source, we have enhanced and expanded our digital technology solutions, and will continue to scale into additional countries. In addition to displaying diabetes therapy management data, Tandem Source is also designed to serve as a portal for supplies reordering and pump software updates.

Our Strategy & Future Technology

Diabetes management can vary greatly from person to person, creating multiple market segments based on clinical needs and personal preferences. Our goal is to redefine global leadership in insulin delivery with an accessible portfolio of transformational devices, applications and services that reduce the daily burden of living with diabetes.

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In support of this strategy, our portfolio of future technologies includes enhancing the features and capabilities of our t:slim X2 and Mobi insulin pump platforms, including adding a tubeless, extended-wear infusion site option for Mobi users. Our pipeline also includes a next-generation patch pump that incorporates our Sigi Patch Pump technology, and we anticipate marketing it as the next generation Mobi. In addition, our development efforts include extended-wear infusion set technology, dual glucose-ketone sensor integration, and algorithm advancement in pursuit of offering fully closed loop technology.

Pump Reimbursement Cycle

Insulin pumps in the U.S. have generally been reimbursed by third-party insurance carriers, government plans or healthcare systems through a medical benefit, subject to a four-year reimbursement cycle. At the end of the typical four-year reimbursement cycle, customers may become eligible to purchase a new insulin pump, subject to the rules and requirements of their primary insurance payor. In 2025, we began implementing a multi-channel managed care strategy in the United States, which provides the opportunity for reimbursement through a pharmacy benefit as an alternative to a medical benefit. This strategic expansion supports broader access and flexibility in reimbursement pathways for our customers.

Through the medical benefit, pumps are generally reimbursed upfront, separate from the ongoing supply purchases. In 2025, we began contracting for customers to receive their pumps and supplies through a pharmacy benefit with the same upfront reimbursement structure as a medical benefit, but are evolving to an alternative pay-as-you-go reimbursement structure in 2026. This would eliminate the upfront pump reimbursement and distribute it across the ongoing supply purchases. With a lower upfront cost, this model is expected to increase adoption of our products by reducing a barrier for patients when evaluating pump therapy. Overall, we anticipate higher revenue in this model over the four-year life of each customer compared to a medical benefit today. Under this new model, we may initially experience a decrease in sales and gross profit when pumps are shipped, which we expect to be offset by an increase in supply sales and gross profit from both our existing installed base and increased volumes.

Reimbursement models internationally also vary by geography between similar four-year purchase cycles and pump rental models, to which our exposure may grow as we build our direct presence in select markets. These changing policies may reduce the reliance on renewal pump sales in future periods as a key growth driver of the business and underscores the importance of our programs dedicated to customer retention through supply sales.

Trends and Uncertainties Impacting Financial Results

Our financial condition and operating results have historically fluctuated on a quarterly or annual basis. We expect periodic fluctuations will continue based on a number of trends and uncertainties, including the following:

Regulatory Approvals and Actions

•Sales of new products are subject to local government regulations. The requirements and timelines to receive regulatory clearance can vary substantially from country to country and delays may impact our ability to expand our worldwide customer base and bring products to market in a competitive timeframe. These delays, or failure to receive regulatory approval, could adversely impact our sales and results of operations.

•Any adverse event involving products that we distribute could result in future corrective actions, such as recalls or customer notifications, or regulatory agency action, which could include inspection, mandatory recall or other enforcement action. Any action by regulatory bodies against us, and any regulatory challenges we encounter, could have a negative impact on our product sales and harm our reputation.

Markets, Seasonality, Competition, and Product Launches

•We expect our business to be impacted by the introduction of new diabetes devices and treatments by us or our competitors. The success of our products is variable and we believe it correlates to market acceptance, anticipated product launches and commercial availability.

•Seasonality in the United States is associated with annual insurance deductibles and coinsurance requirements of the medical benefit in insurance plans used by our customers and the customers of our distributors. In the United States, we typically experience a higher volume of pump shipments in the second half of the year due to the nature of these reimbursement dynamics. As we expand our access through the pharmacy benefit with no upfront reimbursement for an insulin pump, we anticipate there will be less of a seasonal impact on the business in future periods related to insurance deductibles and coinsurance requirements. Other factors that may impact sales across the year include the timing of winter, summer and other seasonal holidays, particularly in our international markets.

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

•In periods following new product launches, particularly with new hardware platforms, our cost of sales may increase on a per unit basis until the new products achieve manufacturing scale and operating expenses may be elevated by increased sales and marketing spending to support the product launches.

Reimbursement

•In 2025, we began implementing a multi-channel managed care strategy in the United States, which provides the opportunity for reimbursement through a pharmacy benefit. Historically, our products have been offered through a medical benefit where pumps are generally reimbursed upfront, separate from the ongoing supply purchases. This strategic expansion into pharmacy supports broader access and greater affordability for our customers. In the first quarter of 2025, we began establishing access for Tandem Mobi customers to receive their pumps and supplies through a pharmacy benefit with the same upfront reimbursement structure as the medical benefit. In the third quarter of 2025, we expanded pharmacy coverage for existing t:slim X2 customers to receive their supplies through a pharmacy benefit. In 2026, our primary focus will be to continue increasing our sales through the pharmacy benefit with improved scalability of operations, expanded coverage and a change in the reimbursement model. Our contracts will be structured to a “pay as you go” model with reimbursement only for the ongoing supply purchases at a price premium to the DME model, recognizing the overall clinical value of our advanced systems and providing no reimbursement for the durable pump. While transitioning to this model, we may initially experience a decrease in sales and gross profit when pumps are shipped, which we expect to be offset by an increase in supply sales and gross profit from both our existing installed base and increased volumes.

•We generally have had broad insurance coverage for our current products from third-party payors. Our sales and results of operations may be impacted by the failure to secure or retain adequate coverage consistent with current reimbursement levels, changes in reimbursement structures, or availability of affordable options for our customers.

Macroeconomic Factors

•Global economic and market uncertainty, such as recessionary concerns, changes in discretionary spending and increased interest rates have impacted our customers’ purchasing decisions and the buying patterns of our distributors.

•High inflation, fluctuations in foreign currency valuations, uncertainty regarding tariffs and trade relations, and the effects of other macroeconomic factors and concerns have disrupted and may continue to disrupt our relationships with suppliers, third-party manufacturers, healthcare providers, distributors and our existing or potential customers, as well as impact our cost structure as more of our business is exposed to foreign currency fluctuations.

Components of Results of Operations

Sales

We offer products for people with insulin-dependent diabetes, including a portfolio of hardware platforms, single-use insulin cartridges and infusion sets, data management platforms and mobile applications. Our primary customers are the end users of our products, non-exclusive distribution partners whose level of service varies based on geography, the healthcare professionals who prescribe our products and the healthcare systems or payors who provide insurance coverage and access to our products. Our sales may fluctuate from period to period. See also “Trends and Uncertainties Impacting Financial Results — Markets, Seasonality, Competition, and Product Launches” above.

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From September 2022 through February 2024, we offered the Tandem Choice program to eligible t:slim X2 customers to provide a pathway to ownership of Tandem Mobi for a fee once available. Eligible customers who purchased a t:slim X2 insulin pump during the program period had until December 31, 2024 to exercise the option to switch to the Tandem Mobi for a stated fee. The accounting treatment for Tandem Choice was complex (see Note 2, “Summary of Significant Accounting Policies”). The program required the deferral of some portion of sales for shipments of eligible pumps between the third quarter of 2022 and the first quarter of 2024. When a customer elected to participate in Tandem Choice, we recognized the existing sales deferral, incremental fees received and the associated costs of goods sold for the new insulin pump, Tandem Mobi, at the time of fulfillment. Qualifying customers were able to elect participation in Tandem Choice beginning in the second quarter of 2024. The remaining deferral balance was recognized as revenue when the program ended on December 31, 2024.

Cost of Sales

Cost of sales primarily consists of raw materials, labor costs, manufacturing overhead expenses, reserves for expected warranty costs, product training costs, royalties, and freight. Manufacturing overhead expenses include expenses relating to quality assurance, manufacturing engineering, material procurement, inventory control, facilities, equipment, information technology and operations supervision and management. When taking into consideration the differences in reimbursement levels and cost structure, pumps have historically had a higher gross profit and gross margin percentage than our pump-related supplies on a per unit basis. Therefore, the percentage of pump sales relative to total sales has had a significant impact on our overall gross margin percentage. As we transition to a “pay as you go” model through the pharmacy benefit in the U.S., our overall gross profit and gross margin percentage may be negatively impacted when pumps are shipped, but may be partially or fully offset by the anticipated benefit from higher profits for our recurring sale of supplies.

Selling, General and Administrative

Our selling, general and administrative (SG&A) expenses primarily consist of salary, cash-based incentive compensation, fringe benefits and non-cash stock-based compensation for our sales, marketing and administrative functions, which also includes our clinical, customer support, technical services, insurance verification and regulatory affairs personnel. Our sales territories in the United States are generally maintained by sales representatives and field clinical specialists, and supported by managed care liaisons, additional sales management and other customer support personnel. Other significant SG&A expenses typically include those incurred for commercialization activities associated with new product launches, travel, trade shows, outside legal fees, independent auditor fees, outside consultant fees, insurance premiums, facilities costs and information technology costs.

Research and Development

Our research and development (R&D) activities primarily consist of engineering and research programs associated with our hardware, software and digital health products under development, as well as activities associated with our core technologies and processes. R&D expenses are primarily related to employee compensation, including salary, cash-based incentive compensation, fringe benefits and non-cash stock-based compensation. We also incur R&D expenses for supplies, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trials, payments under our licensing, development and commercialization agreements and other indirect costs.

Acquired In-process Research and Development (IPR&D)

Acquired IPR&D reflects costs of external research and development projects acquired directly in a transaction other than a business combination, which do not have an alternative future use.

Litigation and Settlement Expense

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

Other Income and Expense, Net

Other income and expense primarily consist of interest earned on our cash equivalents and short-term investments, income or loss from equity method investments, foreign currency transaction gains and losses and interest expense which includes the amortization of debt issuance costs related to our convertible senior notes.

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Income Tax Expense (Benefit)

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

Results of Operations

Year Ended December 31,

(in thousands, except percentages)

Sales:

Gross margin 54 % 52 %

Operating expenses:

Acquired in-process research and development 75,217 —

Litigation and settlement expense 19,951 —

Other income (expense), net:

Loss from equity method investment (14,194) (2,053)

Loss on extinguishment of debt — (1,268)

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

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Comparison of Years Ended December 31, 2025 and 2024

Sales

For the year ended December 31, 2025, we shipped more than 126,000 pumps worldwide compared to more than 120,000 for the year ended December 31, 2024. Sales were $1.0 billion, which included $307.8 million of international sales.For the year ended December 31, 2024, sales were $940.2 million, which included $267.5 million of international sales. In 2024, we recognized $30.2 million in net pump sales as the result of the conclusion of our Tandem Choice program.

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

Year Ended December 31,

Sales:

Net sales recognized for Tandem Choice program — 30,249

For the year ended December 31, 2025, sales in the United States increased primarily due to increased volumes and improved average selling prices. Pump shipments increased to more than 86,000 pumps for the year ended December 31, 2025 compared to nearly 81,000 for the year ended December 31, 2024. Sales in the United States for the year ended December 31, 2024 included $30.2 million in sales related to Tandem Choice. There was no comparable Tandem Choice adjustment for the same period in 2025.

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

Year Ended December 31,

Sales:

For the year ended December 31, 2025, international sales increased due to increased volumes, improved average selling prices and favorable changes in foreign currency exchange rates. Pump sales increased slightly due to an increase in pump shipments to more than 40,000 for the year ended December 31, 2025 compared to nearly 40,000 for the year ended December 31, 2024.

Cost of Sales and Gross Profit

Our cost of sales for the year ended December 31, 2025was$468.7 million, resulting in gross profit of$546.0 million, compared to cost of sales of$450.6million and gross profit of$489.6million for the year ended December 31,2024. The gross margins for 2025 and 2024 were 54% and 52%, respectively. The increase in gross margin was primarily driven by improved average selling prices and reduced non-manufacturing costs. For the year ended December 31, 2024, gross margin benefited by approximately one percentage point due to the net effect of the Tandem Choice program sales offset by charges to cost of sales of $1.3 million for Tandem Choice fulfillments. There was no comparable Tandem Choice adjustment for the same period in 2025.

Operating Expenses

Our operating expenses for the year ended December 31, 2025 were $733.3 million, compared to $588.7 million for the year ended December 31, 2024.

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Selling, General and Administrative Expenses. SG&A expenses were $445.0 million for the year ended December 31, 2025 compared to $389.8 million for the year ended December 31, 2024. The increase in SG&A expenses was attributable to one-time charges for non-recurring facility impairment costs of $6.7 million and restructuring costs of $4.2 million. After one-time costs, the remaining increase of $44.3 million was largely driven by commercial investments in sales infrastructure, including sales force expansion in the United States, costs to support direct operations in Europe and initiatives to create future efficiencies in operations.

Non-recurring facility impairment costs 6,697 —

Restructuring costs 4,158 —

Research and Development Expenses. R&D expenses were $193.1 million for the year ended December 31, 2025, compared to $198.9 million for the year ended December 31, 2024. The year ended December 31, 2025 included $3.1 million of non-recurring restructuring costs. Excluding these costs, the decrease was primarily due to lower employee expenses, including a $5.3 million reduction in stock-based compensation.

Restructuring costs 3,112 —

Acquired In-Process Research and Development (IPR&D) Expenses. Acquired IPR&D expenses were $75.2 million for the year ended December 31, 2025, which represented costs associated with the revised AMF purchase agreement (see Note 13, “Acquisitions”). We did not incur any IPR&D expenses for the year ended December 31, 2024.

Litigation and Settlement Expense. Litigation and settlement expenses of $20.0 million for the year ended December 31, 2025 were related to the Roche Cross-License Agreement (see Note 4 “Composition of Certain Financial Statement Items”). We did not incur any litigation and settlement expenses for the year ended December 31, 2024.

Other Income (Expense), Net

Total other income (expense), net for the year ended December 31, 2025 was a $13.0 million loss, compared to a net income of $7.3 million in 2024. Other expense, net for 2025 primarily consisted of $14.2 million losses on an equity method investment, $7.9 million of interest expense which included the amortization of debt issuance costs related to our convertible senior notes, and $5.4 million realized loss from foreign currency transactions, offset by $13.9 million of interest income earned on our cash equivalents and short-term investments. Other income, net for 2024 primarily consisted of $22.1 million of interest income earned on our cash equivalents and short-term investments, offset by $7.4 million of interest expense, $2.1 million in losses attributable to equity method investments, $2.0 million loss on impairment of strategic investments, $2.0 million in foreign currency transaction losses, and a $1.3 million loss on extinguishment of debt.

Income Tax Expense (Benefit)

Income tax expense was $4.4 million on a pre-tax loss of $200.3 million for the year ended December 31, 2025, compared to income tax expense of $4.2 million on a pre-tax loss of $91.9 million for the year ended December 31, 2024. Income tax expense for the year ended December 31, 2025 was due to current taxes at the United States federal and state levels, and in jurisdictions outside the United States. Income tax expense for the year ended December 31, 2024 was primarily attributable to federal, state and foreign income tax expense as a result of current taxable income in certain jurisdictions.

Liquidity and Capital Resources

As of December 31, 2025, we had $292.7 million in cash and cash equivalents and short-term investments. We believe that our cash and cash equivalents, short-term investments, and future cash flows from operations will be sufficient to fund our ongoing core business activities for at least the next twelve months.

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

Historically, our principal sources of cash have included cash collected from product sales, private and public offerings of equity securities, exercises of employee stock awards and debt financing. We expect to rely primarily on product sales to fund our material cash requirements in both the short and long term.

The following table shows a summary of our cash flows for the twelve months ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Net cash provided by (used in):

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

Net increase in cash and cash equivalents $ 21,400 $ 10,366

Operating activities. Net cash used in operating activities was $9.7 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $24.2 million for the year ended December 31, 2024. For the year ended December 31, 2025, net loss was $204.7 million, net non-cash adjustments were $218.0 million, and the change in working capital balances was a decrease of $23.0 million. For the year ended December 31, 2024, net loss was $96.0 million, net non-cash adjustments were $132.0 million and the change in working capital balances was a decrease of $11.8 million.

Investingactivities. Net cash provided by investing activities was $72.9 million for the year ended December 31, 2025, which primarily consisted of $257.1 million in proceeds from sales, maturities and redemptions of short-term investments, offset by $85.7 million in purchases of short-term investments, $78.6 million paid for IPR&D, and $19.9 million in purchases of property and equipment. Net cash used in investing activities was $23.5 million for the year ended December 31, 2024, which primarily consisted of $264.3 million of purchases of short-term investments, $46.4 million paid for the acquisition of licensed patents, and $19.2 million in purchases of property and equipment, offset by $306.5 million in proceeds from maturities and redemptions of short-term investments.

Financingactivities. Net cash used in financing activities was $43.4 million for the year ended December 31, 2025, which consisted of $40.8 million used to pay the principal portion of the 2025 Notes and payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period. Net cash provided by financing activities was $8.4 million for the year ended December 31, 2024, which primarily consisted of net proceeds of $306.9 million from the issuance of the 2029 Notes which was partially offset by $246.1 million used in the repurchase of 2025 Notes, $30.0 million used in the repurchase and retirement of common stock and $15.8 million used to purchase Capped Call Options related to the 2029 Notes. In addition, $6.7 million was used in payments for tax withholdings related to the issuance of common stock under our stock plans, net of proceeds received from common stock issuances for the period.

Our liquidity position and capital requirements are subject to fluctuation based on a number of factors. In particular, our cash inflows and outflows are principally impacted by the following:

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

•contractual debt obligations, including periodic interest payments;

•the timing of any additional financings, and the net proceeds raised from such financings;

•the timing and amount of proceeds from the issuance of equity awards pursuant to employee stock plans;

•fluctuations in costs, gross and operating margins; and

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•fluctuations in working capital, including changes in accounts receivable, inventories, accounts payable, employee-related liabilities, and operating lease liabilities.

Both our primary short-term and long-term capital needs are expected to include expenditures related to:

•support of our commercialization efforts related to our current and future products;

•expansion of our commercial resources for our growing installed customer base;

•research and product development efforts, including clinical trial costs;

•acquisitions, including strategic investments, equity method investments and future contingent payments associated with acquisitions;

•leasing or licensing of equipment, technology, intellectual property and other assets;

•additional facilities leases and related tenant improvements;

•investments for the development, improvement and acquisition of manufacturing, testing and packaging equipment to support business growth and increase capacity;

•payments under licensing, development and commercialization agreements; and

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

Indebtedness

Convertible Senior Notes

In March 2024, we completed an offering of $316.3 million aggregate principal amount of 1.50% Convertible Senior Notes due 2029 (the 2029 Notes). The proceeds from the issuance of the 2029 Notes were $306.8 million, net of debt issuance costs and cash used to pay the cost of certain capped call transactions and repurchase and retire common stock (see Note 7, “Debt”). The Company used approximately $246.1 million of the net proceeds to repurchase approximately $246.7 million in aggregate principal amount of its Convertible Senior Notes Due 2025 (the 2025 Notes) concurrently with the pricing of the 2029 Notes. The 2029 Notes are the Company’s senior unsecured obligations. Interest is payable in cash semi-annually in arrears on March 15 and September 15 of each year beginning on September 15, 2024, at a rate of 1.50% per year. The 2029 Notes mature on March 15, 2029 unless repurchased, redeemed, or converted in accordance with their terms prior to the maturity date.

Cash payments due by calendar year for our Convertible Senior Notes as of December 31, 2025, are as follows (in thousands):

Principal amount(1):

(1) The convertible senior notes may be settled in cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election.

We may from time to time seek to retire or purchase our outstanding debt, including the Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.

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Promissory Note Payable

In connection with our acquisition of Capillary Biomedical, Inc. (see Note 13, “Acquisitions”), we assumed a $4.7 million promissory note payable. The promissory note accrues interest at the rate of 5% per year, and becomes due and payable upon the first sale or license of the commercialized product. As of December 31, 2025, $4.9 million was included as a component of other current liabilities on the consolidated balance sheets.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about our financial condition and results of operations that are not readily apparent from other sources. Actual results may differ materially from these estimates.

While our significant accounting policies are more fully described in Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements included in this Annual Report, we believe that the following accounting policies are the most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Warranty Reserve

We generally provide a four-year assurance type warranty on our insulin pumps to end user customers and may replace any pumps that do not function as intended in accordance with the product specifications within the warranty period. Insulin pumps returned to us may be refurbished and redeployed. We establish the warranty reserve liability when control of the pump is transferred to the customer, and we reevaluate our estimate of the warranty obligation at each reporting period. Warranty costs are estimated primarily based on the current expected product replacement cost and expected replacement rates utilizing historical experience. Experience has shown that initial data for any new pump version or pump platform may be insufficient. Therefore, our process relies on long-term historical replacement data from existing platforms until sufficient data is available. As actual experience accumulates, we adjust the warranty reserve estimate accordingly. In addition, the availability of replacement data may differ by country due to local compliance and privacy regulations, which may require us to estimate the warranty liability using available information or data from similar markets. Changes to the actual replacement rates or the expected product replacement cost could cause a material increase or decrease to our estimated warranty reserve and related cost of goods sold. We may make further adjustments to the warranty reserve when appropriate, considering revised expectations of product performance based on enhanced hardware, or new features and capabilities that may become available through Tandem Device Updater.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these consolidated financial statements requires management to make estimates and judgments, which present a significant level of estimation uncertainty and that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes as of the date of the consolidated financial statements. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about our financial condition and results of operations that are not readily apparent from other sources. Actual results may differ from these estimates and have a material impact on our financial condition and results of operations.

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Contractual Obligations & Off-Balance Sheet Arrangements

Contractual Obligations

Operating Lease Obligations

We lease general office space, laboratory, manufacturing and warehouse facilities, and equipment under noncancelable operating leases for use in our operations. For a description of our contractual obligations related to leases as of December 31, 2025, see Note 6 “Leases” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

Purchase Order Commitments

We have agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets. For a description of our contractual obligations related to purchase order commitments as of December 31, 2025, see Note 14 “Commitments and Contingencies” to the consolidated financial statements in Part II, Item 8 of this Annual Report.

Standby Letter of Credit

As of December 31, 2025, we were party to a standby letter of credit arrangement in support of certain operating lease obligations (See Note 14, “Commitments and Contingencies”, to the consolidated financial statements in Part II, Item 8 of this Annual Report).

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Credit and Interest Rate Risks

We invest our excess cash in marketable securities consisting primarily of U.S. Treasury securities, U.S. Government-sponsored enterprise securities, commercial paper and corporate debt securities. Some of the financial instruments in which we invest subject us to market risk, in that a change in prevailing interest rates may cause the principal amount of the instrument to fluctuate. Other financial instruments in which we invest subject us to credit risk, in that the value of the instrument may fluctuate based on the issuer’s ability to pay. Credit rating agencies have, from time to time, issued downgrades or revised outlooks to negative for certain issuers of the debt securities held in our short-term investment portfolio. We review our portfolio of available-for-sale debt securities quarterly to determine if any investment is impaired due to changes in credit risk or other potential valuation concerns. Unrealized losses on available-for-sale debt securities as of December 31, 2025 were primarily due to an increase in market interest rates after certain debt securities were purchased. Based on the credit quality of the available-for-sale debt securities in an unrealized loss position, and our current estimates of future cash flows to be collected from those securities, we believe the unrealized losses were not credit losses (see Note 3, “Short-Term Investments”).

The primary objectives of our investment activities are to maintain liquidity and preserve principal while maximizing the income we receive from our financial instruments without significantly increasing risk. We have established guidelines regarding approved investments and maturities of investments, which are primarily designed to maintain liquidity and preserve principal.

Because of the short-term maturities of our financial instruments, we do not believe that an increase or decrease in market interest rates would have a significant impact on the realized value of our investment portfolio. A hypothetical 100 basis-point (one percentage point) increase or decrease in interest rates compared to actual rates as of December 31, 2025, would have affected the estimated fair value of our investments portfolio by approximately $1.6 million.

In March 2024, we issued $316.3 million principal amount of Convertible Senior Notes, due in 2029, which bear interest at a fixed rate of 1.50% per year. Accordingly, we are not subject to interest rate risk related to the Convertible Senior Notes (see Note 7, “Debt”).

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Foreign Currency Exchange Rate Risk

Our operations are primarily located in the United States. We also have a sales and marketing office in Canada, a distribution center in the Netherlands, and offices in other countries in Europe such as Switzerland and the UK. Beginning in 2026, we have initiated direct sales activities in other select European markets and will continue this transition across additional markets. Our sales to customers in the United States are made in U.S. dollars. Sales from our distribution center in Europe and certain other international markets are made under agreements denominated in local currencies. Approximately 30% of our sales were denominated in foreign currencies for the year ended December 31, 2025. In addition, we purchase certain inventory from a third-party contract manufacturer located in Mexico. We believe our exposure to foreign currency rate fluctuations is primarily related to our operations in Europe and Canada where fluctuations in the rate of exchange between the U.S. dollar and the local currency could adversely affect our financial results, including income and losses as well as assets and liabilities.

As we expand and further develop our operations in international markets, particularly in Europe, we are exposed to additional foreign currency exchange rate risk. In addition, from time to time, we have foreign currency exchange risk related to existing assets and liabilities, certain inventory purchase agreements, other committed transactions and forecasted future cash flows. Beginning in 2025, we started using derivative instruments, including foreign currency exchange forward contracts, to hedge a portion of our foreign currency exposure. We expect to continue evaluating and using hedging strategies where appropriate. However, we may choose not to hedge some exposures for a variety of reasons, including prohibitive economic costs.

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Item 8. Consolidated Financial Statements and Supplementary Data.

Our consolidated financial statements as of December 31, 2025 and 2024 and for each of the three years in the period ended December 31, 2025, and the Report of the Independent Registered 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: 42) 71

Consolidated Balance Sheets as of December 31, 2025 and 2024 73

Notes to Consolidated Financial Statements 77

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Tandem Diabetes Care, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tandem Diabetes Care, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 19, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits 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. We believe that our audits provide a reasonable basis for our opinion.

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 the critical audit matter does not alter in any way our opinion on the consolidated 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.

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Warranty Reserve – Estimation of Expected Replacement Rates

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2009.

San Diego, California

February 19, 2026

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TANDEM DIABETES CARE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

December 31, December 31,

Assets

Current assets:

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of convertible senior notes, net — 40,670

Commitments and contingencies (Note 14) — —

Stockholders’ equity:

Accumulated other comprehensive income (loss) 5,593 (1,947)

Total liabilities and stockholders’ equity $ 881,112 $ 967,658

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

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TANDEM DIABETES CARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

Year Ended December 31,

Operating expenses:

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

Litigation and settlement expense 19,951 — —

Other income (expense), net:

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

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

Other comprehensive income (loss):

Unrealized gain (loss) on short-term investments $ 517 $ (311) $ 3,606

Unrealized loss on cash flow hedges (312) — —

Foreign currency translation gains (losses) 7,335 (3,005) (420)

Net loss per share - basic and diluted $ (3.04) $ (1.47) $ (3.43)

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

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TANDEM DIABETES CARE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

Common Stock

Stock-based compensation expense — — 88,926 — — 88,926

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

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

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

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

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

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

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

Unrealized loss on cash flow hedges — — — (312) — (312)

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

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

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TANDEM DIABETES CARE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year Ended December 31,

Operating Activities

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

Loss on extinguishment of debt — 1,268 —

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

Changes in operating assets and liabilities:

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

Investing Activities

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

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

Financing Activities

Principal payments on convertible senior notes due 2025 (40,760) —

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

Other financing activities — 183 (71)

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

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

Supplemental disclosures of cash flow information

Supplemental schedule of non-cash investing and financing activities

Intangible costs in other long-term liabilities $ 13,300 $ — $ —

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

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TANDEM DIABETES CARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

The Company

Tandem Diabetes Care, a global insulin delivery and diabetes technology company, focused on the design development and commercialization of technology solutions that reduce the burden of diabetes management. Tandem Diabetes Care, Inc. is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc., together with its wholly-owned subsidiaries.

The Company manufactures, sells, and supports insulin pump products that are designed to address the evolving needs and preferences of differentiated segments of the insulin-dependent diabetes market. The Company offers an insulin pump portfolio, which includes both the t:slim X2 and the Tandem Mobi. Both pumps feature Control-IQ+ technology, which is the Company’s most advanced algorithm for managing insulin delivery, using information received from integrated continuous glucose monitoring (CGM) sensors. New software for the insulin pumps may be updated remotely by the individual users as new advancements become available. The insulin pumps are compatible with other complementary digital health offerings, such as the Company’s mobile application and cloud-based diabetes management applications. The Company offers durable insulin pumps that are designed for years of daily use. The Company sells single-use supplies that are used together with the pumps and are replaced every few days. These supplies include cartridges for storing insulin, and infusion sets that contain a cannula and connect the pump to a user’s body to administer insulin.

Basis of Presentation and Principles of Consolidation

The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The statements include the accounts of Tandem Diabetes Care, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The functional currency of the Company’s foreign subsidiaries is their respective local currency. The Company translates the financial statements of its foreign subsidiaries into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenue, costs and expenses. Translation-related adjustments are included in other comprehensive income (loss), and in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Company’s consolidated balance sheets. Foreign exchange gains or losses resulting from balances denominated in a currency other than the functional currency are recognized in interest income and other income, net in the Company’s consolidated statements of operations.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes as of the date of the consolidated financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase and that can be liquidated without prior notice or penalty to be cash equivalents.

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Short-Term Investments

The Company’s short-term investments are classified as available-for-sale securities. Such securities are carried at fair value as determined by prices for identical or similar securities at the balance sheet date. The Company’s short-term investments consist of Level 1 and Level 2 financial instruments in the fair value hierarchy. The net unrealized gains or losses on available-for-sale securities that are not related to credit factors are reported as a component of other comprehensive income (loss) within the consolidated statements of operations and as a component within accumulated other comprehensive income (loss) in stockholders’ equity on the consolidated balance sheets. The Company determines realized gains or losses on the sale of available-for-sale securities using the specific identification method and includes net realized gains and losses as a component of other income or expense within the consolidated statements of operations.

The Company reviews its available-for-sale debt securities for credit losses quarterly, considering a variety of factors, including the significance of the decline in value as compared to the amortized cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, and the market and economy in general. Losses on available-for-sale debt securities as a result of credit factors are recognized by recording an impairment loss as a component of other income or expense within the consolidated statements of operations and a corresponding allowance for credit losses. The Company did not recognize any impairment losses related to its short-term investments during the years ended December 31, 2025, 2024 and 2023.

Accounts Receivable

The Company grants credit to various customers in the ordinary course of business and is paid directly by customers who use its products, distributors and third-party insurance payors. The Company maintains an allowance for its current estimate of expected credit losses. Provisions for expected credit losses are estimated based on historical experience, assessment of specific customer-related risks, review of outstanding invoices, forecasts about the future, and various other assumptions and estimates that are believed to be reasonable under the circumstances, including changes to credit risks as a result of recessionary concerns, changes in discretionary spending, increased interest rates, and other macroeconomic factors. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company maintains deposit accounts in federally insured financial institutions in excess of federally insured limits and has investments in money market funds that are not federally insured. Additionally, the Company has established guidelines regarding investment instruments and their maturities, which are designed to maintain preservation of principal and liquidity.

The following table summarizes the percentages of total sales and accounts receivable, net for customers who accounted for 10% or more of the respective amounts for the periods presented:

Total Sales Accounts Receivable, net

Year Ended December 31, December 31,

Distributor B * * * 10.6 % *

Distributor C * * * * 11.8 %

* Amount related to the respective customer represented less than 10% for the period presented.

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Valuation of Inventories

Inventories are valued at the lower of cost or net realizable value, determined by the first-in, first-out method. Inventory is recorded using standard cost, including material, labor and overhead costs. The Company periodically reviews inventories for potential impairment and adjusts inventory for potentially excess or obsolete goods to state inventories at their net realizable value. Factors influencing these adjustments include quantities on hand and firm purchase commitments, expectations of future use, judgments based on quality control testing data and assessments of the likelihood of scrapping or obsoleting certain inventories based on future demand for its products and market conditions.

Long-Lived Assets

Property and Equipment

Property and equipment, which primarily consist of office furniture and equipment, manufacturing and scientific equipment, computer equipment and software, and leasehold improvements, are stated at cost, less accumulated depreciation. Property and equipment are depreciated over the estimated useful lives of the assets, generally three to seven years, using the straight-line method. Leasehold improvements and related equipment are amortized over the lesser of the estimated useful lives of the assets or the remaining lease term, unless there is a transfer of title or purchase option that is reasonably certain to be exercised. Maintenance and repair costs are expensed as incurred.

Operating Lease Right-of-Use Assets and Liabilities

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized when the Company takes possession of the leased property (Commencement Date) based on the present value of lease payments over the lease term. For lease agreements that contain lease and non-lease components, the Company accounts for both of those components as a single lease component. Rent expense on noncancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning on the Commencement Date. The difference between rent expense and rent paid is accounted for as a component of operating lease right-of-use assets on the Company’s consolidated balance sheets. Landlord improvement allowances and other similar lease incentives are recorded as a reduction of the right-of-use lease assets, and are amortized on a straight-line basis as a reduction to operating lease costs.

Intangible Assets Subject to Amortization

Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recognized over their estimated useful lives using a straight-line or accelerated attribution method, depending on the economic benefit associated with the asset.

Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, operating lease right-of-use assets, and acquired intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined using unobservable (Level 3) inputs, including discounted cash flow models, future estimated sublease income, and third-party independent appraisals, as considered necessary. There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not meet or exceed projected performance, or if the assumptions used in the model change in the future, the Company may be required to recognize additional impairment charges in future periods. The Company recognized the impairment of operating lease right-of-use assets in 2025, and the impairment of operating lease right-of-use assets and related leasehold improvements and furniture and fixtures in 2023 (see Note 6, “Leases”). There were no other impairments of long-lived assets, including acquired intangible assets, during the years ended December 31, 2025, 2024 and 2023.

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Equity Method Investments

In November 2024, the Company invested an additional $46.4 million cash in one of its private company investees, resulting in a change to equity method accounting following that date. The Company held equity method investments of $60.4 million and $74.5 million as of December 31, 2025 and December 31, 2024, respectively. The Company uses the equity method to account for investments in companies if it owns more than 20% of the investee company’s outstanding equity or the investment provides the Company with the ability to exercise significant influence but not control over the operating and financial policies of the investee. The Company assesses whether it has significant influence by considering various factors, including the nature and magnitude of the investment, voting rights held and participation in the governance of the investee, if any. The Company may also consider additional relevant factors, such as the presence of other business relationships.

The Company’s consolidated net loss included its proportionate share of the net loss of its equity method investee, which was $14.2 million and $2.1 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2023, the Company did not hold any equity method investments and therefore did not recognize a share of net income or loss from any equity method investments.

Revenue Recognition

Revenue is generated primarily from sales of insulin pumps, single-use insulin cartridges and infusion sets to individual customers with third-party insurance coverage and through a network of distributors that resell the products to insulin-dependent diabetes customers. The Company recognizes revenue when it transfers control of the promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, net of estimated rebates, prompt payment discounts and a provision for product returns.

Revenue Recognition for Arrangements with Multiple Performance Obligations

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

The transaction price is the net consideration to which the Company expects to be entitled, determined from either the stated value in contractual arrangements or the estimated cash to be collected in non-contracted arrangements. The transaction price also includes an estimate of variable consideration at the time of sale. Variable consideration includes, but is not limited to: rebates, prompt payment discounts, and a provision for product returns. These amounts are recorded as a reduction of accounts receivable when no payment is required from the Company and as a liability when a payment is required.

The Company allocates consideration to the individual performance obligations and recognizes consideration based on when the performance obligation is satisfied, considering whether or not this occurs at a point in time or over time. Generally, insulin pumps, cartridges, infusion sets, and accessories are deemed performance obligations that are satisfied at a point in time when the customer obtains control of the promised good, which typically is upon shipment for our distributor arrangements and upon receipt for direct sales to individual customers. Complementary products, such as the Company’s data management and software update platforms, are considered distinct performance obligations that are satisfied over time, as access and support for these products is provided throughout the typical four-year warranty period of the insulin pumps. Accordingly, revenue related to the complementary products is deferred and recognized over a four-year period. Where there is no standalone value for the complementary product, the Company determines its value by applying the expected cost plus a margin approach and then allocates the residual to the insulin pumps.

Variable Consideration

The amount of variable consideration that is included in the transaction price is included in revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company is subject to certain rebates on pricing programs with managed care organizations, including pharmacy benefit managers and governmental or third-party commercial payors. The terms of these programs may vary depending on the customer and contractual arrangements. The Company estimates provisions for rebates based on contractual arrangements, estimates of products sold subject to rebate, known market events or trends and channel inventory data. Sales rebates are recorded as a reduction of revenue and are included within other current or long-term liabilities on the consolidated balance sheets, depending on the anticipated settlement period of the rebate. Actual rebate payments may differ from estimated amounts recorded in the accompanying consolidated financial statements.

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

Other current liabilities $ 7,601 $ 2,229

Revenue Recognition for Tandem Choice Program

From September 2022 through December 2024, the Company offered a technology access program referred to as Tandem Choice that provided eligible in-warranty t:slim X2 customers in the United States with the flexibility to obtain the Tandem Mobi once commercially available. The program created a material right, for which a portion of each t:slim X2 pump sales transaction price was allocated and deferred. The Company began selling Tandem Mobi insulin pumps in February 2024, at which time eligibility for Tandem Choice ended and no further deferrals were recorded. Eligible customers who purchased a t:slim X2 insulin pump during the program period could exercise the option through December 31, 2024.

The Company recognized the deferred sales when the obligations under the Tandem Choice program were satisfied. If a customer elected to participate in the program, the Company recognized upgrade fees received, and the associated cost of goods sold, at the time of fulfillment. The remaining deferrals were recognized at program expiration on December 31, 2024. For the year ended December 31, 2024, the Company recognized net revenue of $30.2 million as a result of the Tandem Choice program. For the year ended December 31, 2023, the Company deferred revenue of $25.1 million as a result of the Tandem Choice program. There was no comparative adjustment to pump sales in 2025.

Sales Returns

The Company offers a 90-day right of return to customers in the United States and Canada from the date of shipment of its insulin pumps, provided a physician’s confirmation of the medical reason for the return is received. Estimated allowances for sales returns are based on historical returned quantities as compared to pump shipments in those same periods of return, adjusted for known or expected changes in the marketplace when appropriate. The amounts recorded in deferred revenue on the Company’s consolidated balance sheets for allowances for sales returns were not material for the periods presented. Actual product returns have not differed materially from estimated amounts recorded in the accompanying consolidated financial statements.

Derivative Instruments and Hedging Activities

The Company records the fair value of derivative instruments as either current assets or current liabilities on the consolidated balance sheets. Changes in the fair value of derivative instruments are recorded each period in current earnings or other comprehensive income (loss), depending on whether a derivative instrument is designated as part of a hedging transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, the Company formally documents the nature and relationships between the hedging instrument and hedged item.

For derivatives formally designated as hedges, the Company assesses both at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in either the fair value or cash flows of the hedged item.

Gains or losses on cash flow hedges are reclassified from other comprehensive income (loss) to earnings when the hedged transaction occurs and affects consolidated results. Gains or losses on fair value hedges are recognized in earnings immediately and offset against changes in the fair value of the underlying hedged asset, liability or firm commitment. If the Company determines that a forecasted transaction is no longer probable or no longer qualifies for hedge accounting treatment, the Company discontinues hedge accounting and any related unrealized gain or loss on the derivative instrument is recognized in current earnings.

Derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings.

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Warranty Reserve

The Company generally provides a four-year warranty on its insulin pumps to end-user customers and may replace any pumps that do not function as intended in accordance with the product specifications within the warranty period. In addition, the Company offers a six-month warranty on single-use insulin cartridges and infusion sets. Estimated warranty costs are recorded at the time of shipment, and the Company reevaluates the estimate of the warranty reserve obligation at each reporting period. Warranty costs are primarily estimated based on expected replacement rates using historical experience and the expected product replacement cost. Returned insulin pumps may be refurbished and redeployed.

Experience has shown that initial data for any new pump version or pump platform may be insufficient. Therefore, the Company relies on long-term historical replacement data from existing platforms until sufficient data is available. As actual experience accumulates, the Company adjusts its warranty reserve estimate accordingly. In addition, the availability of replacement data may differ by country due to local compliance and privacy regulations, which may require the Company to estimate its warranty liability using available information or data from similar markets. The Company may further adjust the warranty reserve when appropriate, considering revised expectations of product performance based on enhanced hardware, or new features and capabilities that may become available through Tandem Device Updater. Warranty expense is recorded as a component of cost of sales in the consolidated statements of operations.

The following table provides a reconciliation of the changes in product warranty liabilities for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

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

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Stock-Based Compensation

Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis. The Company estimates the fair value of employee purchase rights under the Company’s Employee Stock Purchase Plan (ESPP) using the Black-Scholes option pricing model on the date of grant. The Black-Scholes option pricing model requires the use of assumptions about a number of variables, including stock price volatility, expected term, dividend yield and risk-free interest rate (see Note 8, “Stockholders’ Equity”). The fair value of restricted stock unit (RSU) awards issued under the Company’s stock incentive plans that vest solely based on service, is estimated based on the fair market value of the underlying stock on the date of grant. The fair value of RSU awards that vest based upon predefined Company performance metrics and the awardee’s continuing service through the measurement date is generally estimated based on the fair market value of the underlying stock on the date of grant and the probability that the specified performance criteria will be met. These awards vest upon the Company’s actual performance relative to predefined performance metrics and subject to the awardee’s continuous service through the respective measurement dates as defined in the award agreements. For certain performance-based RSUs with market-based criteria, the Company used a Monte Carlo methodology to estimate the fair value at the date of grant. At each reporting period, the Company reassesses the probability of the achievement of such performance metrics. Any expense change resulting from an adjustment in the estimated shares to be released is recorded in the period of adjustment. With respect to RSU awards with a market condition, the Company recognizes compensation expense ratably over the requisite service period under an award based on the fair market value of the award at the time of grant, regardless of whether the market condition is satisfied. Previously recognized compensation cost would be reversed only if the employee terminated employment before completing the requisite service period.

Shipping and Handling Expenses

Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s consolidated statements of operations. Amounts billed to a customer for shipping and handling are reported as revenues.

Research and Development Costs

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

Acquired In-Process Research and Development Expenses

Acquired in-process research and development (IPR&D) expenses reflect the costs of externally developed IPR&D projects acquired directly in a transaction other than a business combination that do not have an alternative future use, including the initial costs of rights to IPR&D projects. The acquired IPR&D is expensed on acquisition date. Future costs to develop these IPR&D projects are recorded in research and development expenses on the consolidated statements of operations as incurred.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets or liabilities are recognized based on the temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse. Tax law and rate changes are reflected in income in the period such changes are enacted. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. The Company will continue to assess the need for a valuation allowance on its deferred tax assets by evaluating both positive and negative evidence that may exist. Any adjustment to the net deferred tax asset valuation allowance would be recorded in the consolidated statements of operations for the period that the adjustment is determined to be required.

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The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts 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. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within income tax expense.

Comprehensive Loss

All components of comprehensive loss, including net loss, are reported in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities, unrealized gains and losses on hedging activities, and foreign currency translation adjustments.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for common share equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding, including all potentially dilutive common share equivalents. Dilutive common share equivalents are comprised of stock options and unvested RSUs outstanding under the Company’s stock incentive plans, potential awards to be granted pursuant to the ESPP, and common stock warrants, each calculated using the treasury stock method, and shares issuable upon conversion of the convertible senior notes calculated using the if-converted method.

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

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

Year Ended December 31,

Options to purchase common stock 94 124 135

Awards granted under the ESPP 73 58 14

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. The Company adopted ASU 2023‐09 in the current fiscal year on a prospective basis. The standard only impacts disclosures and did not affect the recognition or measurement of income taxes. Adoption had no impact on the Company’s consolidated results of operations, financial position, or cash flows.

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Accounting Pronouncements Issued and Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03 Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), and in January 2025, the FASB issued Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (ASU 2025-01). ASU 2024-03 requires entities to disclose information about purchases of inventory, employee compensation, and intangible asset amortization in each income statement line item that contains those expenses. ASU 2024-03, as clarified by ASU 2025-01, is effective for the annual reporting period beginning after December 15, 2026 and interim reporting periods within the annual reporting period beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU 2024-03, as clarified by ASU 2025-01, to determine the impact it may have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06 Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which modernizes the accounting guidance for internal-use software, including website development costs. The amendments eliminate the consideration of software development stages and introduce a new capitalization threshold based on the entity’s commitment to fund the project and the probability of completion. ASU 2025-06 will be effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual periods. Early adoption is permitted. The Company is currently evaluating ASU 2025-06 to determine the impact it may have on its consolidated financial statements.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (ASU 2025-09). This update is intended to better align hedge accounting with entities’ risk management strategies and simplify application. Key provisions include allowing grouping of forecasted transactions with similar risk exposure, introducing a model for hedging variable-rate debt instruments that permit rate selection, permitting component hedging for certain nonfinancial forecasted transactions, clarifying treatment of certain compound derivatives, and restoring operability for specific dual hedge strategies. ASU 2025-09 is effective for fiscal years beginning after December 15, 2026, including interim periods, with early adoption permitted. The Company is currently evaluating ASU 2025-09 to determine the impact it may have on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements (ASU 2025-11), which clarifies and improves the guidance for interim financial reporting. The amendments introduce a disclosure principle requiring entities to disclose events since the end of the previous annual reporting period that materially affect the entity, consolidate a comprehensive list of interim disclosure requirements within ASC 270, and provide guidance on the form and content of condensed interim financial statements. ASU 2025-11 will be effective for interim reporting periods in fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU 2025-11 to determine the impact it may have on its consolidated financial statements.

3. Short-Term Investments

The Company invests in marketable securities primarily consisting of debt instruments of the United States Government, United States Government-sponsored enterprises, and financial institutions and corporations with strong credit ratings. The following represents a summary of the estimated fair value of short-term investments as of December 31, 2025 and December 31, 2024 (in thousands):

Available-for-sale securities:

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Available-for-sale securities:

The contractual maturities of available-for-sale debt securities as of December 31, 2025, were as follows (in thousands):

Years to Maturity

As of December 31, 2025 Within One Year One to Two Years Estimated Fair Value

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

The Company reviews its portfolio of available-for-sale debt securities quarterly to determine if any investment is impaired due to changes in credit risk or other potential valuation concerns.

4. Composition of Certain Financial Statement Items

Accounts Receivable

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

December 31, December 31,

Less: allowance for credit losses (8,393) (7,251)

Allowance for Credit Losses

The following table provides a reconciliation of the changes in the allowance for estimated accounts receivable credit losses for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

Write-offs and adjustments, net of recoveries (8,336) (7,626) (4,969)

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Inventories

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

December 31, December 31,

Property and Equipment

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

As of December 31,

Computer equipment and software 5,167 9,811

Manufacturing and scientific equipment 99,273 82,248

Less: accumulated depreciation and amortization (73,047) (62,828)

Total property and equipment, net $ 83,580 $ 78,150

Depreciation and amortization expense related to property and equipment was $15.1 million, $14.7 million, and $13.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Intangible Assets Subject to Amortization

On May 21, 2025, the Company and various Roche entities (collectively “Roche”) entered into a Settlement, Mutual Release and Cross-License Agreement (the “Roche Cross-License Agreement”). The Roche Cross-License Agreement resolved all actual or potential patent disputes as of the agreement date.

Under the terms of the Roche Cross-License Agreement, the Company agreed to pay Roche $36.0 million over a four-year period, with an initial cash payment of $8.0 million and four equal annual installments of $7.0 million thereafter. The installment payments include approximately $4.4 million of imputed interest. As a result, the Company recorded a $31.6 million liability, representing the present value of the total settlement obligation. Upon payment of the initial installment, which occurred in the second quarter of 2025, both parties granted each other non-exclusive, non-royalty-bearing, non-transferrable, and irrevocable licenses to their respective insulin delivery system-related patents and applications for a period of 10 years.

The Company allocated the present value of the settlement consideration between the value of the licensed patents and the release of past and potential future claims. Based on a relative fair value approach, $13.3 million was capitalized as an intangible asset for the value of the license, which will be amortized over seven years, reflecting the estimated useful life of the acquired patents. The remaining consideration was expensed as settlement and litigation expense with related legal fees in the second quarter of 2025.

The fair value of the licensed patents was estimated using a discounted cash flow model, which incorporated assumptions including projected revenues associated with the licensed technology, a technology migration rate, an estimated royalty rate, and a discount rate. The fair value of the past damages claimed was estimated based on applicable historical revenues and an estimated royalty rate.

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Intangible assets subject to amortization consist of the licensed patent rights obtained through the Roche settlement, technology-based intangibles acquired with Sugarmate, and patents purchased or licensed that are related to the Company’s commercialized products. Intangible assets as of December 31, 2025 and 2024, which were included in other long-term assets on the consolidated balance sheets, were as follows (in thousands):

December 31,

Weighted average remaining amortization period (in months) 77 6

Amortization expense related to intangible assets subject to amortization was $2.5 million for the year ended December 31, 2025 and recorded in selling, general and administrative expense and cost of sales in the consolidated statements of operations. Amortization expense related to intangible assets subject to amortization was $1.9 million for each of the years ended December 31, 2024 and 2023, respectively and is recorded in selling, general and administrative expense in the consolidated statements of operations. The estimated aggregate future amortization expense is $2.6 million in 2026, $2.7 million in 2027, $2.3 million in 2028, $2.0 million in 2029, $1.3 million in 2030, and the remaining $0.7 million thereafter. Amortization expense for intangible assets obtained through the Roche settlement will be recorded in cost of sales in the consolidated statements of operations.

5. Fair Value Measurements

The Company performs fair value measurements in accordance with U.S. GAAP. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of inputs:

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

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

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

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments are carried at fair value.

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

Fair Value Measurements as ofDecember 31, 2025

Total Level 1 Level 2 Level 3

Assets

Available-for-sale securities:

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

United States Treasury securities 34,338 34,338 — —

Liabilities

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

Total liabilities $ 312 $ — $ 312 $ —

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Fair Value Measurements as ofDecember 31, 2024

Total Level 1 Level 2 Level 3

Assets

United States Government-sponsored enterprises 133,280 — 133,280 —

(1)Generally, cash equivalents include money market funds and investments with a maturity of three months or less from the date of purchase.

The Company’s Level 1 financial instruments, which are in active markets, are valued using unadjusted quoted market prices for identical instruments.

The Company’s Level 2 financial instruments are valued using market prices on less active markets with observable valuation inputs such as interest rates and yield curves. The Company obtains the fair value of Level 2 financial instruments from quoted market prices, calculated prices or quotes from third-party pricing services. The Company validates these prices through independent valuation testing and review of portfolio valuations provided by the Company’s investment managers. The Company’s foreign currency forward contracts are designated as cash flow hedges (see Note 9 “Derivatives”) and are commitments to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange rate.

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

Fair Value of Convertible Senior Notes

The Company’s Convertible Senior Notes are carried at amortized cost on the consolidated balance sheets (see Note 7, “Debt”). The Company estimated the fair value of its convertible senior notes based on Level 2 quoted market prices as follows (in thousands):

Fair Value Measurements as of

Convertible Senior Notes due 2025 $ — $ 39,130

Total fair value of outstanding convertible senior notes $ 324,979 $ 446,882

6. Leases

The Company’s leases consist of operating leases for facility space to support general office, research and development, manufacturing and warehouse facilities, and equipment. These non-cancellable operating leases have initial lease terms from two years to thirteen years.

Headquarters Lease

In September 2021, the Company entered into a lease agreement for 181,949 square feet of general administrative, laboratory, and research and development office space (the Premises) located on High Bluff Drive in San Diego, California (Headquarters Lease). The Headquarters Lease term expires in April 2035.

In December 2023, the Company entered into an agreement to sublease the Phase II portion of the leased premises under the Headquarters Lease, from January 2025 through March 2029, for which accounting commenced in January 2025.

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The Company recognizes the sublease income on a straight-line basis over the term of the sublease which is classified in the Company’s consolidated statements of operations and comprehensive lossas a reduction of rent expense in selling, general and administrative expense (SG&A). The difference between sublease income recognized and cash received from the subtenant accrues as a deferred rent receivable.

Operating Lease Impairment Charges

As part of our evaluation of the sublease agreement related to the Headquarters Lease, the Company compared the estimated undiscounted sublease income to the net book value of the underlying right of use asset. Because the expected sublease income was less than the net book value of the sublease assets, the Company recorded a $3.6 million impairment charge in operating expenses in 2025 by reducing the net book value of the subleased assets to their estimated fair value, which is determined by discounting the estimated sublease income using the estimated incremental borrowing rate of the subtenant.

Additionally, in 2025, the Company transferred certain development activities from its Lausanne, Switzerland location to the United States. In connection with this relocation, the Company evaluated the impact on related fixed assets and operating lease arrangements. The Company also reviewed its assumptions for estimated future sublease income for its Vista Sorrento lease. As a result, the Company recorded a $3.1 million impairment charge in operating expenses in 2025, comprised of operating lease impairment charges and write-offs of fixed assets consisting primarily of leasehold improvements.

In 2023, the Company consolidated facilities by moving the administrative functions and other operations from the leased space on Vista Sorrento Parkway in San Diego, California (Vista Sorrento Lease) to the Company’s new headquarters, located on High Bluff Drive in San Diego, California. In connection with permanently ceasing use of the Vista Sorrento Lease, the Company recorded a $14.1 million impairment charge as the carrying amount of the assets related to the Vista Sorrento Lease exceeded its fair value based on the Company’s estimate of future discounted cash flows related to the leased facility. The $14.1 million charge was comprised of an $11.2 million impairment of operating lease right-of-use assets and a $2.9 million write-off of fixed assets, and was recorded as a component of selling, general and administrative expenses in the consolidated statements of operations.

Supplemental Lease Disclosure Information

The Company’s lease costs recorded in the consolidated statements of operations were as follows (in thousands):

Year Ended December 31,

Sublease income $ (2,263) $ — $ —

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

Years Ending December 31,

Total undiscounted lease payments 173,416

Less: amount representing interest (38,977)

Present value of operating lease liabilities 134,439

Less: current portion of operating lease liabilities (19,472)

Operating lease liabilities - long-term $ 114,967

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The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows:

Weighted-average remaining lease term (in years) 8.6 9.2

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

7. Debt

Convertible Senior Notes Due 2029

On March 8, 2024, the Company completed an offering of $316.3 million aggregate principal amount of 1.50% Convertible Senior Notes due 2029 (the 2029 Notes). The proceeds from the issuance of the 2029 Notes were $306.8 million, net of debt issuance costs.

The Company used approximately $246.1 million of the net proceeds to repurchase approximately $246.7 million in aggregate principal amount of its Convertible Senior Notes Due 2025 (the 2025 Notes) concurrently with the pricing of the 2029 Notes in privately negotiated transactions. The Company also paid $1.3 million of accrued interest due at time of the note repurchase. As a result of the repurchase, the Company recognized a $1.3 million loss on extinguishment of debt in the consolidated statements of operations for the year ended December 31, 2024. The loss on extinguishment of debt included the unamortized debt issuance costs related to the portion of the 2025 Notes repurchased.

The Company also used $30.0 million of the net proceeds to repurchase shares of the Company’s common stock from certain purchasers of the 2029 Notes at a purchase price equal to the last reported sale price per share of the Company’s common stock on March 5, 2024, which was $27.105 per share. In addition, the Company used $15.8 million of the net proceeds to pay the cost of the capped call transactions (2029 Capped Call Transactions) discussed below.

The 2029 Notes are the Company’s senior unsecured obligations. Interest is payable in cash semi-annually in arrears on March 15 and September 15 of each year beginning on September 15, 2024, at a rate of 1.50% per year. The 2029 Notes mature on March 15, 2029 unless repurchased, redeemed, or converted in accordance with their terms before the maturity date.

The initial conversion rate for the 2029 Notes is 28.9361 shares of common stock per $1,000 principal amount of the 2029 Notes, which is equivalent to an initial conversion price of approximately $34.56 per share of the Company’s common stock (2029 Notes Conversion Price). The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2029 Notes.

The Company may not redeem the 2029 Notes before March 22, 2027. The Company has the option to redeem for cash all or any portion of the 2029 Notes on or after March 22, 2027 if the last reported sale price of the Company’s common stock has been at least 130% of the 2029 Notes Conversion Price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period, at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest. No sinking fund is provided for the 2029 Notes.

Holders of the 2029 Notes may convert all or a portion of their 2029 Notes at their option before December 15, 2028, in multiples of $1,000 principal amounts, only under the following circumstances:

•during any calendar quarter commencing after the quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the 2029 Notes Conversion Price on each applicable trading day;

•during the five business day period after any ten consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate of the 2029 Notes on such trading day;

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•if the Company calls such 2029 Notes for redemption, at any time before the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption; or

•on the occurrence of specified corporate events.

On or after December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2029 Notes, in integral multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the 2029 Notes.

Convertible Senior Notes Due 2025

In May 2020, the Company completed an offering of $287.5 million aggregate principal amount of 1.50% Convertible Senior Notes due 2025 (the 2025 Notes). The proceeds from the issuance of the Notes were $244.6 million, net of debt issuance costs and cash used to pay the cost of certain related capped call transactions. In March 2024, the Company repurchased for cash $246.7 million aggregate principal amount of the 2025 Notes, concurrently with the pricing of the 2029 Notes in privately negotiated transactions. The 2025 Notes matured in the second quarter of 2025, and the Company settled the balance of $40.8 million using existing cash balances.

The net carrying amount of the Company’s convertible senior notes on the consolidated balance sheets consisted of the following (in thousands):

Principal amount:

Unamortized debt issuance costs (6,214) (8,074)

Less: current portion — (40,670)

As of December 31, 2025, the if-converted value of the 2029 Notes did not exceed the principal amount. As of December 31, 2024, the if-converted value of the 2029 Notes exceeded the principal amount by $13.4 million.

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

Year Ended December 31,

Effective interest rate:

Convertible Senior Notes Due 2029 2.1 % 2.1 % *

(1) The effective interest rate presented represents the rate applicable for the period outstanding. The 2025 Notes matured in May 2025, and the outstanding principal balance was settled using cash balances.

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

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

Year Ended December 31,

(1) Contractual interest expense for the year ended December 31, 2023 included $3.3 million of additional interest. In October 2023, the Company was notified that additional interest beyond the 1.50% per annum had been accruing on the 2025 Notes since May 2021, under the terms of the indenture. This additional interest accrued at a rate of 0.50% per annum on the outstanding principal amount of the Notes to approximately $3.3 million. The additional accrued interest was fully paid during the fourth quarter of 2023.

2029 Capped Call Transactions

In connection with the issuance of the 2029 Notes, the Company entered into Capped Call Transactions in March 2024 with certain counterparties at a net cost of $15.8 million (2029 Capped Call Transactions). The 2029 Capped Call Transactions are expected generally to reduce potential dilution to the Common Stock upon any conversion of the 2029 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap based on a cap price initially equal to $42.01 per share, and is subject to certain adjustments under the terms of the 2029 Capped Call Transactions.

Promissory Note Payable

In connection with the acquisition of Capillary Biomedical, Inc. in 2022, the Company assumed a $4.7 million promissory note payable. The promissory note accrues interest at the rate of 5.0% per year, and becomes due and payable upon the first sale or license of the commercialized product. As of December 31, 2025 and 2024, the loan balance, including accrued interest, was $4.9 million and $4.8 million, respectively, and was included as a component of other current liabilities on the consolidated balance sheets.

8. Stockholders’ Equity

Shares Reserved for Future Issuance

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

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

Shares underlying outstanding warrants 194

Shares underlying outstanding stock options 2,789

Shares underlying unvested restricted stock units 3,657

Shares authorized for issuance pursuant to awards granted under the ESPP 1,934

Shares authorized for future equity award grants 539

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Common Stock Warrants

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

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

Stock Options

The maximum term of stock options granted under the Company’s active plans is ten years. Stock options have an exercise price equal to the closing price of the Company's common stock on the applicable award date. The Company did not grant any stock options in the periods presented.

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

Restricted Stock Units

Restricted stock units (RSUs) have a grant value equal to the closing price of the Company’s common stock on the award date. RSUs granted before March 2022 generally vest over a four-year period based on continuous service as to 25% of the underlying shares on the first anniversary of the award, with the balance of the RSUs vesting quarterly over the following three years. RSUs granted after March 2022 generally vest over a three-year period based on continuous service to the Company as to 33% of the underlying shares on the first anniversary of the award, with the balance of the RSUs vesting quarterly over the following two years. In addition, the Company granted 297,456, 151,660 and 110,074 performance-based RSUs during the years ended December 31, 2025, 2024 and 2023, respectively, of which 297,456, 151,660, and 92,308 units remained outstanding as of December 31, 2025.

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

The aggregate fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $41.4 million, $58.5 million, and $21.2 million, respectively, which represents the market value of the Company’s common stock on the date the RSUs vested. The number of RSUs vested includes shares of common stock the Company withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. RSUs that are expected to vest are net of estimated future forfeitures.

Employee Stock Purchase Plan

The ESPP enables eligible employees to purchase shares of the Company’s common stock using their after-tax payroll deductions, subject to certain conditions. Eligible employees may contribute, through payroll deductions, up to 15% of their earnings for the purchase of common stock under the ESPP. The purchase price of common stock under the ESPP is the lesser of: (a) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85% of the fair market value of a share of the Company’s common stock on the date of purchase.

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

Stock-Based Compensation

The following table summarizes the allocation of stock-based compensation expense included in the consolidated statements of operations for all stock-based compensation arrangements (in thousands):

Year Ended December 31,

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

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

The Company records stock-based compensation expense associated with the ESPP using the Black-Scholes option pricing model. The assumptions used in the Black-Scholes option pricing model for the ESPP were as follows:

ESPP

Year Ended December 31,

Weighted average grant date fair value (per share) $ 9.84 $ 17.01 $ 10.35

Risk-free interest rate 3.9 % 4.7 % 4.9 %

Dividend yield 0.0 % 0.0 % 0.0 %

Expected term (in years) 1.3 1.3 1.3

Risk-free Interest Rate. The risk-free interest rate assumption was based on the United States Treasury’s rates for United States Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Expected Dividend Yield. The dividend yield is zero because the Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.

Expected Volatility. The expected volatility was estimated basedon a weighted-average of the Company’s actual historical volatility of its common stock measured over the expected term.

Expected Term. The Company utilized the simplified method for estimating the expected term of stock option grants. Under this approach, the weighted-average expected term is presumed to be the average of the vesting term and the contractual term of the option.

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

9. Derivatives

Due to the global nature of the Company’s operations, a portion of its revenue and operating expense are denominated in currencies other than the U.S. dollar, exposing the Company to foreign currency exchange rate fluctuations. To mitigate the impact of these fluctuations, the Company uses foreign currency forward contracts to hedge a portion of its forecasted international revenue and operating expense. The Company’s foreign currency forward contracts are denominated primarily in Euros, Canadian dollars and Swiss francs (CHF).

As of December 31, 2025, the Company’s outstanding foreign currency forward contracts settle within nine months. These contracts are designated as cash flow hedges. Unrealized gains or losses on these contracts are recorded in accumulated other comprehensive income (loss) (AOCI). Realized gains and losses of such contracts are recognized in revenue and operating expenses in the same period during which the hedged transactions affect the consolidated results of operations. The cash flow effects of our derivative contracts in the consolidated statements of cash flows are included in net cash provided by operating activities. All derivative instruments are used solely for risk management purposes and are not for speculative trading purposes. For the periods presented, the Company did not have any non-designated hedges.

The notional value of foreign currency forward contracts outstanding related to forecasted transactions was $68.2 million as of December 31, 2025. The Company did not have any forward contracts outstanding as of December 31, 2024. The Company recorded an unrealized loss on foreign currency forward contracts of $0.3 million for the year ended December 31, 2025.

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

Net Gains (Losses) Reclassified from AOCI into Operating Income

Designated cash flow hedges:

Operating expense $ (60)

The Company did not enter into any foreign currency forward contracts that qualified for hedge accounting in 2024 and 2023, and therefore there were no derivative assets or liabilities, nor adjustments to revenue or operating expense as a result of cash flow hedges during the years ended December 31, 2024 and 2023.

10. Employee Benefits

Defined Contribution Plans

The Company has defined contribution plans for certain of its employees. The Company’s largest defined contribution plan is the 401(k) plan for employees in the United States who are at least 18 years of age. Eligible employees may participate in the plan beginning on the first day of the calendar month following their date of hire. Unless they affirmatively elect otherwise, eligible employees are automatically enrolled in the plan following 30 days from their date of hire. Under the terms of the plan, eligible employees may make voluntary contributions as a percent of compensation and the Company may elect to match a discretionary percentage of employee contributions. The total cost recognized by the Company for the 401(k) plan was $4.9 million, $4.6 million and $4.2 million, respectively, for the years ended December 31, 2025, 2024 and 2023. The Company’s contributions for its defined contribution plans for employees internationally were not material for each of the years ended December 31, 2025, 2024 and 2023.

11. Income Taxes

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

Year Ended December 31,

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

Year Ended December 31,

Current:

Deferred:

Federal — — —

State — — —

Foreign — — —

Total deferred income tax benefit — — —

97

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

$ %

Income tax benefit at federal statutory rate (1) $ (42,057) 21.00 %

State income tax, net of federal benefit(2) (1,038) 0.52 %

Foreign tax effects

Switzerland

Foreign rate differential (3,041) 1.52 %

Changes in valuation allowance (7,037) 3.51 %

Other foreign jurisdictions (1,722) 0.86 %

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

Effect of cross-border tax laws

Subpart F income inclusion 348 (0.17) %

Tax credits

Research and development credits (10,370) 5.18 %

Changes in valuation allowance 54,580 (27.25) %

Nontaxable or nondeductible items

Non-deductible stock-based compensation 3,952 (1.97) %

Other non-deductible and non-taxable (103) 0.05 %

Other

Stock-based compensation - (windfall) shortfall 11,542 (5.76) %

Net impact on liquidation of foreign subsidiary (17,262) 8.62 %

Changes in unrecognized tax benefits 17,297 (8.64) %

Year Ended December 31,

Income tax benefit at federal statutory rate (1) $ (19,293) $ (46,253)

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

Convertible debt repurchase transaction 1,658 —

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

Section 382 limitation — (5)

Recognition of acquired deferred tax assets — (5,048)

Acquired IPR&D expenses — 14,938

Cross-border tax impacts (1,422) (307)

Foreign rate differential 2,075 7

(1)For the years ended December 31, 2025, 2024 and 2023, the U.S. federal statutory tax rate was 21%.

98

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

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

Year Ended December 31,

State

Other states 775