OMNICELL, INC.

Previous wording

Forward-looking statements are based on our current expectations and assumptions, and are subject to known and unknown risks and uncertainties, many of which are beyond our control, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied in the forward-looking statements. Such risks and uncertainties include those described throughout this Quarterly Report on Form 10-Q, including in Part I - Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II - Item 1A. “Risk Factors,”as well as in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2025. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements should be considered in light of these risks and uncertainties. You should carefully read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits, as well as other documents we file with, or furnish to, the U.S.

Current wording

Forward-looking statements are based on our current expectations and assumptions, and are subject to known and unknown risks and uncertainties, many of which are beyond our control, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied in the forward-looking statements. Such risks and uncertainties include those described throughout this Quarterly Report on Form 10-Q, including in Part I - Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II - Item 1A. “Risk Factors,”as well as in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2025. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements should be considered in light of these risks and uncertainties. You should carefully read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits, as well as other documents we file with, or furnish to, the U.S. Securities and Exchange Commission (“SEC”) from time to time, with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements in this Quarterly Report on Form 10-Q represent our current estimates and assumptions and speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those expressed or implied in any forward-looking statements, whether as a result of changed circumstances, future events, even if new information becomes available in the future, or otherwise.

Previous wording

Omnicell solutions are helping healthcare facilities worldwide to uncover cost savings, improve labor efficiency, establish new revenue streams, enhance supply chain control, support compliance, and move closer to the industry-defined vision of the Autonomous Pharmacy. We sell our product and consumable solutions together with related service offerings. Revenues generated in the United States represented 91% and 92% of our total revenues for the three months ended June 30, 2025 and 2024, respectively, and 92% and 91% of our total revenues for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Omnicell solutions are helping healthcare facilities worldwide to uncover cost savings, improve labor efficiency, establish new revenue streams, enhance supply chain control, support compliance, and move closer to the industry-defined vision of the Autonomous Pharmacy. We sell our product and consumable solutions together with related service offerings. Revenues generated in the United States represented 90% and 91% of our total revenues for the three months ended September 30, 2025 and 2024, respectively, and 91% of our total revenues for both the nine months ended September 30, 2025 and 2024.

Previous wording

On April 2, 2025, the current U.S. administration imposed significant tariffs on a wide variety of products manufactured in virtually every foreign jurisdiction, which tariffs were subsequently paused for 90 days on April 10, 2025, and such tariffs were then expected to be reinstated on August 7, 2025. In addition, tariffs on all imports from China, which were 145% as of April 10, 2025, were subsequently reduced for 90 days on May 14, 2025, with such tariff rates being 30% as of August 6, 2025. In response, several foreign countries have imposed reciprocal tariffs on goods manufactured in the United States. Furthermore, the current U.S. administration has also announced, as have other foreign governments, that it may implement other tariffs or increase existing tariffs. We are monitoring ongoing developments surrounding the fluid tariff environment. Although we continue to work to mitigate the impact of current or potential tariffs, there can be no assurance that we will be able to offset any increased costs or other adverse impacts. As a result, we may incorrectly anticipate outcomes, forgo or pass up business opportunities, or fail to appropriately adapt or manage our business strategies in response to these changes. As a result of all of these factors, we may experience direct and indirect adverse effects on our business, operating results, cash flow, or financial condition.

Current wording

In recent years, the U.S. government has advocated for greater restrictions on trade generally. For example, in 2025, the U.S. imposed tariffs on a wide variety of products manufactured in multiple foreign jurisdictions, including China, Mexico, and Malaysia. In response to the ongoing changes in tariffs, several foreign countries have imposed reciprocal tariffs on goods manufactured in the United States. These tariff rates have fluctuated and may continue to fluctuate going forward. In an effort to address these actions, we have implemented various mitigation measures, including dual-sourcing of components and nearshoring manufacturing. While these actions have effectively mitigated some of the impact of these costs, there can be no assurance that we will be able to offset future increased costs or other adverse impacts. Although we continue to work to mitigate the impact of current or potential tariffs, we may incorrectly anticipate outcomes, forgo or pass up business opportunities, or fail to appropriately adapt or manage our business strategies in response to these changes. As a result of all of these factors, we may experience direct and indirect adverse effects on our business, operating results, cash flow, or financial condition.

Previous wording

Our full-time employee headcount was approximately 3,650 as of June 30, 2025.

Current wording

Our full-time employee headcount was approximately 3,600 as of September 30, 2025.

Previous wording

In 2023, the United States spent $723 billion on prescription drugs, a 13.6% increase from 2022. This was the largest annual spending increase in 20 years and impacted patients in virtually all settings of care. We believe there are significant challenges facing the practice of pharmacy today including, but not limited to, budget constraints, increased healthcare worker turnover rates, labor shortages, drug shortages, drug diversion, manual and error-prone processes, complex compliance requirements, and limited inventory visibility. Each of these challenges may lead to poor medication management outcomes including, but not limited to, medication errors, adverse drug events, lack of patient adherence, and medication waste. We also recognize that these challenges may impact the timing of contracting for, or implementation of, our products, solutions, or services. However, we believe that over time these significant challenges to the practice of pharmacy will drive demand for increased automation, visibility, insights, and improved medication management outcomes that our solutions are designed to enable. Because of this, we believe that our solutions are well-positioned to address the evolving needs of healthcare institutions and therefore present opportunities for long-term growth.

Current wording

In 2024, the United States spent $806 billion on prescription drugs, a 10.2% increase from 2023. We believe there are significant challenges facing the practice of pharmacy today including, but not limited to, budget constraints, increased healthcare worker turnover rates, labor shortages, drug shortages, drug diversion, manual and error-prone processes, complex compliance requirements, and limited inventory visibility. Each of these challenges may lead to poor medication management outcomes including, but not limited to, medication errors, adverse drug events, lack of patient adherence, and medication waste. We also recognize that these challenges may impact the timing of contracting for, or implementation of, our products, solutions, or services. However, we believe that over time these significant challenges to the practice of pharmacy will drive demand for increased automation, visibility, insights, and improved medication management outcomes that our solutions are designed to enable. Because of this, we believe that our solutions are well-positioned to address the evolving needs of healthcare institutions and therefore present opportunities for long-term growth.

Previous wording

There were no material changes in the matters for which we make critical accounting estimates in the preparation of our Condensed Consolidated Financial Statements during the six months ended June 30, 2025 as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

There have been no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2025 as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Product revenues represented 56% and 57% of total revenues for the three months ended June 30, 2025 and 2024, respectively. Product revenues increased by $6.6 million, primarily due to the increase in revenues from our XT Amplify program, partially offset by lower volumes from our XT Series automated dispensing systems business due to the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle.

Current wording

Product revenues represented 57% and 56% of total revenues for the three months ended September 30, 2025 and 2024, respectively. Product revenues increased by $19.1 million, primarily due to the increase in revenues from our XTExtend offering, partially offset by the decrease in revenues from products related to our Central Pharmacy Dispensing Service offering.

Previous wording

Service revenues represented 44% and 43% of total revenues for the three months ended June 30, 2025 and 2024. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $7.2 million due to an increase of $4.4 million in technical services revenues primarily as a result of growth in our installed customer base and the impact of pricing actions, as well as an increase of $2.7 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering.

Current wording

Service revenues represented 43% and 44% of total revenues for the three months ended September 30, 2025 and 2024. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $9.1 million due to an increase of $7.7 million in technical services revenues primarily as a result of growth in our installed customer base and the impact of pricing actions. The increase is also driven by an increase of $1.4 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering, partially offset by lower revenues from the EnlivenHealth portfolio.

Previous wording

Our international sales represented 9% and 8% of total revenues for the three months ended June 30, 2025 and 2024, respectively, and are expected to be affected by foreign currency exchange rate fluctuations. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates.

Current wording

Our international sales represented 10% and 9% of total revenues for the three months ended September 30, 2025 and 2024, respectively, and are expected to be affected by foreign currency exchange rate fluctuations. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates.

Previous wording

Product revenues represented 55% of total revenues for both the six months ended June 30, 2025 and 2024. Product revenues increased by $18.5 million, primarily due to the increase in revenues from our XT Amplify program, partially offset by lower volumes from our XT Series automated dispensing systems business due to the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle.

Current wording

Product revenues represented 56% of total revenues for both the nine months ended September 30, 2025 and 2024. Product revenues increased by $37.6 million, primarily due to the increase in revenues from our XTExtend offering, partially offset by lower volumes from our XT Series automated dispensing systems business due to the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle, as well as the decrease in revenues from products related to our Central Pharmacy Dispensing Service offering.

Previous wording

Service revenues represented 45% of total revenues for both the six months ended June 30, 2025 and 2024. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $18.8 million due to an increase of $7.3 million in technical services revenues primarily as a result of growth in our installed customer base and the impact of pricing actions, as well as an increase of $11.5 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering.

Current wording

Service revenues represented 44% of total revenues for both the nine months ended September 30, 2025 and 2024. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $27.9 million due to an increase of $15.0 million in technical services revenues primarily as a result of growth in our installed customer base and the impact of pricing actions. The increase is also driven by an increase of $12.9 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering, partially offset by lower revenues from the EnlivenHealth portfolio.

Previous wording

Our international sales represented 8% and 9% of total revenues for the six months ended June 30, 2025 and 2024, respectively, and are expected to be affected by foreign currency exchange rate fluctuations. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates.

Current wording

Our international sales represented 9% of total revenues for both the nine months ended September 30, 2025 and 2024, and are expected to be affected by foreign currency exchange rate fluctuations. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates.

Previous wording

Cost of revenues for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 increased by $5.7 million, primarily driven by a $20.0 million increase in cost of service revenues, partially offset by a $14.3 million decrease in cost of product revenues.

Current wording

Cost of revenues for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 increased by $16.0 million, of which $13.7 million was attributed to the increase in cost of service revenues and $2.3 million was attributed to the increase in cost of product revenues.

Previous wording

The increase in cost of service revenues was primarily driven by the increase in service revenues of $18.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, including the associated increase in employee-related expenses, and an increase in certain non-recurring costs, including software upgrade expenses.

Current wording

The increase in cost of service revenues was primarily driven by the increase in service revenues of $9.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, including the associated increase in employee-related expenses, and an increase in certain non-recurring costs, including software upgrade expenses.

Previous wording

Cost of revenues for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 increased by $0.4 million, primarily driven by a $7.9 million increase in cost of service revenues, partially offset by a $7.5 million decrease in cost of product revenues.

Current wording

Cost of revenues for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 increased by $21.6 million, primarily driven by a $33.7 million increase in cost of service revenues, partially offset by a $12.0 million decrease in cost of product revenues.

Previous wording

The decrease in cost of product revenues for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily driven by the impact of more favorable materials costs as well as favorable impact from customer and product mix during the six months ended June 30, 2025 and a decrease of $2.6 million of restructuring costs, partially offset by an increase in revenues.

Current wording

The decrease in cost of product revenues for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily driven by the impact of more favorable materials costs as well as favorable impact from product and customer mix during the nine months ended September 30, 2025 and a decrease of $3.3 million of restructuring costs, partially offset by an increase in product revenues and the impact of tariffs.

Previous wording

The increase in cost of service revenues was primarily driven by the increase in service revenues of $7.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, including the associated increase in employee-related expenses.

Current wording

The increase in cost of service revenues was primarily driven by the increase in service revenues of $27.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, including the associated increase in employee-related expenses, and an increase in certain non-recurring costs, including software upgrade expenses.

Previous wording

The overall increase in gross margin primarily relates to higher revenues for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, as well as a decrease in cost of product revenues primarily due to the impact of more favorable materials costs as well as favorable impact from customer and product mix during the three months ended June 30, 2025, partially offset by an increase in employee-related expenses. Our gross profit for the three months ended June 30, 2025 was $127.7 million, as compared to $114.4 million for the three months ended June 30, 2024.

Current wording

The overall increase in gross margin primarily relates to higher revenues for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, as well as a decrease in cost of product revenues for the nine months ended September 30, 2025 primarily due to the impact of more favorable materials costs as well as favorable impact from product and customer mix, partially offset by the impact of tariffs and an increase in employee-related and certain non-recurring software upgrade expenses. Our gross profit for the nine months ended September 30, 2025 was $373.1 million, as compared to $329.2 million for the nine months ended September 30, 2024.

Previous wording

Research and Development. Research and development expenses increased by $0.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Research and Development. Research and development expenses increased by $2.8 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Selling, General, and Administrative. Selling, general, and administrative expenses increased by $8.0 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily due to an increase of $5.3 million in employee-related expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, as well as an increase of $3.1 million in the allowance for credit losses.

Current wording

Selling, General, and Administrative. Selling, general, and administrative expenses increased by $7.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to an increase of $5.2 million in employee-related expenses and an increase of $1.6 million in freight out for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $2.6 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily driven by a $2.9 million decrease in other income and a $0.3 million decrease in other expense. The decrease in other income during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 is primarily attributable to lower interest income received due to lower interest rates and lower cash and cash equivalents balances following the partial repurchase of our convertible senior notes in November 2024.

Current wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $3.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by a $3.9 million decrease in other income and a $0.3 million decrease in other expense. The decrease in other income during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 is primarily attributable to lower interest income received due to lower interest rates and lower cash and cash equivalents balances following the partial repurchase of our convertible senior notes in November 2024 and repurchases of our common stock during the second and third quarters of 2025.

Previous wording

Research and Development. Research and development expenses decreased by $1.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Current wording

Research and Development. Research and development expenses increased by $1.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

Selling, General, and Administrative. Selling, general, and administrative expenses increased by $17.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily due to an increase of $11.3 million in employee-related expenses primarily as a result of higher headcount, an increase of $3.6 million in the allowance for credit losses, an increase of $2.7 million for legal and regulatory expenses, and an increase of $1.5 million in certain restructuring and severance charges for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, partially offset by a decrease of $1.5 million in rent and facilities expenses as well as other expenses.

Current wording

Selling, General, and Administrative. Selling, general, and administrative expenses increased by $25.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily due to an increase of $16.5 million in employee-related expenses primarily as a result of higher headcount and annual merit increases, an increase of $2.9 million in the allowance for credit losses, an increase of $2.7 million for legal and regulatory expenses, an increase of $2.4 million in certain restructuring and severance charges, and an increase in commissions of $2.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $4.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily driven by a $5.1 million decrease in other income and a $0.5 million decrease in other expense. The decrease in other income during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 is primarily attributable to lower interest income received due to lower interest rates and lower cash and cash equivalents balances following the partial repurchase of our convertible senior notes in November 2024.

Current wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $8.2 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by a $9.0 million decrease in other income and a $0.8 million decrease in other expense. The decrease in other income during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily attributable to lower interest income received due to lower interest rates and lower cash and cash equivalents balances following the partial repurchase of our convertible senior notes in November 2024 and repurchases of our common stock during the second and third quarters of 2025.

Previous wording

For both the six months ended June 30, 2025 and June 30, 2024, we recorded a provision for income taxes of $2.3 million by applying our estimated annual effective tax rate to our year-to-date measure of ordinary income and adjusted for $2.0 million and $3.3 million, respectively, of discrete income tax expense primarily from equity compensation. The change in the provision for income taxes for the six months ended June 30, 2025 compared to the provision for income taxes for the same period in 2024 was insignificant, consisting of various offsetting components of annual effective tax rate and discrete income tax expense.

Current wording

For the nine months ended September 30, 2025 and September 30, 2024, we recorded a provision for income taxes of $6.5 million and $5.3 million, respectively, by applying our estimated annual effective tax rate to our year-to-date measure of ordinary income and adjusted for $3.2 million and $4.9 million, respectively, of discrete income tax expense primarily from equity compensation. The change in the provision for income taxes for the nine months ended September 30, 2025 compared to the provision for income taxes for the same period in 2024 was insignificant, consisting of various offsetting components of annual effective tax rate and discrete income tax expense.

Previous wording

We had cash and cash equivalents of $399.0 million at June 30, 2025 compared to $369.2 million at December 31, 2024. All of our cash and cash equivalents are invested in bank accounts and money market funds held in sweep and asset management accounts with financial institutions of high credit quality.

Current wording

We had cash and cash equivalents of $180.1 million at September 30, 2025 compared to $369.2 million at December 31, 2024. All of our cash and cash equivalents are invested in bank accounts and money market funds held in sweep and asset management accounts with financial institutions of high credit quality.

Previous wording

Our future uses of cash are expected to be primarily for working capital, capital expenditures, and other contractual obligations. We may also use cash for potential acquisitions and acquisition-related activities, as well as repurchases of our common stock. In addition, we may also use a portion of our cash as we consider various options related to our outstanding debt.

Current wording

Our future uses of cash are expected to be primarily for working capital, capital expenditures, and other contractual obligations. We may also use cash for potential acquisitions and acquisition-related activities, as well as repurchases of our common stock.

Previous wording

The 2025 Repurchase Program has a total of $62.1 million remaining for future repurchases as of June 30, 2025, which may result in additional use of cash. During the three months ended June 30, 2025, the 2016 Repurchase Program was completed. During the three and six months ended June 30, 2025, we repurchased approximately 536,000 shares of our common stock under the repurchase programs at an average price of $29.24 per share for an aggregate purchase price of approximately $15.7 million. Refer to “Stock Repurchase Programs” under Note 16, Employee Benefits and Share-Based Compensation, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Current wording

During the nine months ended September 30, 2025, we repurchased approximately 2,523,000 shares of our common stock under the 2016 and 2025 Repurchase Programs at an average price of $30.74 per share for an aggregate purchase price of approximately $77.6 million, which completed the 2016 Repurchase Program and substantially completed the 2025 Repurchase Program. Refer to “Stock Repurchase Programs” under Note 16, Employee Benefits and Share-Based Compensation, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

In November 2024, we completed a partial repurchase of $400.0 million aggregate principal amount of the 2025 Notes for approximately $391.0 million in cash. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Current wording

In November 2024, we completed a partial repurchase of $400.0 million aggregate principal amount of the 2025 Notes for approximately $391.0 million in cash. The 2025 Notes matured on September 15, 2025 and we repaid the remaining principal balance of $175.0 million in cash. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

Based on our current business plan and backlog, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, cash generated from the exercise of employee stock options and purchases under our Employee Stock Purchase Plan (“ESPP”), along with the availability of funds under the Current Revolving Credit Facility will be sufficient to meet our cash needs for working capital, capital expenditures, potential acquisitions, outstanding debt, and other contractual obligations for at least the next twelve months. For periods beyond the next twelve months, we also anticipate that our net operating cash flows plus existing balances of cash and cash equivalents will suffice to fund the growth of our business.

Current wording

Based on our current business plan and backlog, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, cash generated from the exercise of employee stock options and purchases under our Employee Stock Purchase Plan (“ESPP”), along with the availability of funds under the Current Revolving Credit Facility will be sufficient to meet our cash needs for working capital, capital expenditures, potential acquisitions, and other contractual obligations for at least the next twelve months. For periods beyond the next twelve months, we also anticipate that our net operating cash flows plus existing balances of cash and cash equivalents will suffice to fund the growth of our business.

Previous wording

Net cash provided by operating activities was $68.7 million for the six months ended June 30, 2025, primarily consisting of operating inflows of $63.0 million and favorable working capital movements of $5.7 million. Operating inflows consisted of a net loss of $1.4 million, adjusted for non-cash items of $64.4 million, which consisted primarily of depreciation and amortization expense of $39.6 million and share-based compensation expense of $21.3 million. The favorable working capital was primarily due to a decrease in accounts receivable and unbilled receivables of $25.9 million primarily due to the timing of billings, shipments, and collections, an increase in deferred revenues of $15.1 million, due to the timing of billings and customers’ installation schedules, and an increase in accounts payable of $10.7 million primarily due to an increase in inventory spend and timing of payments. These cash inflows were partially offset by an increase in inventories of $15.9 million to support production requirements, including advanced purchases of certain components, a decrease in accrued liabilities of $14.9 million primarily due a decrease in taxes payable, a decrease in accrued compensation of $8.6 million primarily due to a decrease in accrued employee bonuses and commissions, and a decrease in operating lease liabilities of $5.8 million.

Current wording

Net cash provided by operating activities was $96.9 million for the nine months ended September 30, 2025, primarily consisting of operating inflows of $105.3 million and unfavorable working capital movements of $8.4 million. Operating inflows consisted of net income of $4.1 million, adjusted for non-cash items of $101.2 million, which consisted primarily of depreciation and amortization expense of $59.0 million and share-based compensation expense of $32.5 million. The unfavorable working capital was primarily due to an increase in inventories of $17.7 million to support production requirements, including advanced purchases of certain components, as well as the impact of tariffs, a decrease in accrued liabilities of $13.1 million primarily due a decrease in taxes payable, a decrease in accrued compensation of $11.0 million primarily due to a decrease in accrued employee bonuses and commissions, as well as timing of ESPP purchases, an increase in other current assets of $10.0 million, and a decrease in operating lease liabilities of $8.8 million. These cash outflows were partially offset by an increase in deferred revenues of $26.9 million, due to the timing of billings and customers’ installation schedules, a decrease in accounts receivable and unbilled receivables of $12.5 million primarily due to the timing of billings, shipments, and collections, an increase in accounts payable of $10.7 million primarily due to an increase in inventory spend and timing of payments, and a decrease in other long-term assets of $5.9 million.

Previous wording

Net cash provided by operating activities was $108.7 million for the six months ended June 30, 2024, primarily consisting of operating inflows of $52.4 million and favorable working capital movements of $56.3 million. Operating inflows consisted of a net loss of $11.9 million, adjusted for non-cash items of $64.3 million, which consisted primarily of depreciation and amortization expense of $42.1 million, share-based compensation expense of $18.7 million, and inventory write-down charges of $5.4 million. The favorable working capital was primarily due to an increase in deferred revenues of $22.1 million driven by an increase in billings, a decrease in inventories of $11.2 million resulting from inventory management initiatives, and a decrease in accounts receivable and unbilled receivables of $10.9 million driven by overall business activity and the timing of billings and collections.

Current wording

Net cash provided by operating activities was $131.4 million for the nine months ended September 30, 2024, primarily consisting of operating inflows of $93.8 million and favorable working capital movements of $37.6 million. Operating inflows consisted of a net loss of $3.3 million, adjusted for non-cash items of $97.1 million, which consisted primarily of depreciation and amortization expense of $62.3 million, share-based compensation expense of $30.3 million, inventory write-down charges of $5.4 million, amortization of operating lease right-of-use assets of $5.3 million, and a change in deferred income taxes of $9.4 million. The favorable working capital was primarily due to an increase in deferred revenues of $27.7 million driven by an increase in billings, a decrease in inventories of $10.0 million resulting from inventory management initiatives, a decrease of $8.4 million in other current assets due to a decrease in income tax receivables, and an increase of $7.0 million in accrued liabilities due to an increase in rebate liabilities. These cash inflows were partially offset by a decrease of $8.0 million in operating lease liabilities, an increase of $7.5 million in investment in sales-type leases resulting from growth in our SaaS and Expert Services offerings, and a decrease in accrued compensation of $6.7 million.

Previous wording

Net cash used in investing activities was $31.7 million for the six months ended June 30, 2025, which consisted of capital expenditures of $23.0 million for property and equipment and $8.7 million for external-use software development costs.

Current wording

Net cash used in investing activities was $45.9 million for the nine months ended September 30, 2025, which consisted of capital expenditures of $32.7 million for property and equipment and $13.2 million for external-use software development costs.

Previous wording

Net cash used in investing activities was $25.9 million for the six months ended June 30, 2024, which consisted of capital expenditures of $18.5 million for property and equipment and $7.4 million for external-use software development costs.

Current wording

Net cash used in investing activities was $39.2 million for the nine months ended September 30, 2024, which consisted of capital expenditures of $27.4 million for property and equipment and $11.8 million for external-use software development costs.

Previous wording

Net cash used in financing activities was $7.4 million for the six months ended June 30, 2025, primarily due to $15.7 million paid for repurchases of shares of our common stock, partially offset by $8.3 million in proceeds from employee stock option exercises and ESPP purchases.

Current wording

Net cash used in financing activities was $227.4 million for the nine months ended September 30, 2025, primarily due to the repayment of the remaining principal balance of our 2025 Notes of $175.0 million, repurchases of shares of our common stock of $77.6 million, and $6.0 million in employees’ taxes paid related to restricted stock unit vesting, partially offset by $15.2 million in proceeds from employee stock option exercises and ESPP purchases and a net change in the customer funds balances of $16.0 million.

Previous wording

Net cash used in financing activities was $4.7 million for the six months ended June 30, 2024, primarily due to a net change in the customer funds balances of $11.6 million, partially offset by $8.1 million in proceeds from employee stock option exercises and ESPP purchases.

Current wording

Net cash used in financing activities was $1.1 million for the nine months ended September 30, 2024, primarily due to a net change in the customer funds balances of $10.7 million, partially offset by $13.1 million in proceeds from employee stock option exercises and ESPP purchases.

Previous wording

There have been no significant changes during the six months ended June 30, 2025 to the contractual obligations disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” set forth in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

There have been no significant changes during the nine months ended September 30, 2025 to the contractual obligations disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” set forth in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2024, other than as described in Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

(3)We issued the 2025 Notes in September 2020 that are due in September 2025 and issued the 2029 Notes in November 2024 that are due in December 2029. The obligations presented above include both principal and interest on these notes. Although these notes mature in 2025 and 2029, respectively, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met. Any conversion prior to maturity can result in repayment of the principal amounts sooner than the scheduled repayment as indicated in the table above. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Current wording

(3)We issued the 2029 Notes in November 2024 that are due in December 2029. The obligations presented above include both principal and interest on these notes. Although these notes mature in 2029, they may be converted into cash and shares of our common stock prior to maturity if certain conditions are met. Any conversion prior to maturity can result in repayment of the principal amounts sooner than the scheduled repayment as indicated in the table above. Refer to Note 11, Convertible Senior Notes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.