OMNICELL, INC.

Previous wording

•delays in installations of our medication management solutions or our more complex medication packaging systems;

Current wording

•delays in installations of our medication management solutions or our more complex medication packaging systems, or in the timing of purchasing decisions;

Previous wording

•availability and sources of raw materials and components, price fluctuations and an inability to pass increased costs on to our customers, or shortages or interruptions of supply;

Current wording

•availability and sources of raw materials and components, in particular with regard to semiconductor chips, price fluctuations and an inability to pass increased costs on to our customers, or shortages or interruptions of supply;

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 hardware, software, and consumable solutions together with related service offerings. Revenues generated in the United States represented 90% and 92% of our total revenues for the three months ended March 31, 2026 and 2025, 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 hardware, software, 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 June 30, 2026 and 2025, respectively, and 90% and 92% of our total revenues for the six months ended June 30, 2026 and 2025, respectively.

Previous 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 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, and in certain cases implemented, greater restrictions on trade. For example, in 2025 and 2026, the U.S. imposed or announced tariffs and other trade measures on a wide variety of products manufactured in multiple foreign jurisdictions, including China, Mexico, and Malaysia, andseveral foreign countries have imposed or threatened 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 these factors, we may experience direct and indirect adverse effects on our business, operating results, cash flow, or financial condition.

Previous wording

In addition, on February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Subsequent to this ruling the U.S. Court of International Trade issued an order that directed the U.S. Customs and Border Protection (“CBP”) to formalize a process for refunding IEEPA tariffs. On April 20, 2026, the CBP launched an online portal to submit IEEPA tariff refund requests. Submitted requests are reviewed by the CBP to determine validity prior to the issuance of any refund. As the recoverability and timing of any such refund remains uncertain, we have not recorded any potential benefit as of March 31, 2026.

Current wording

On February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Subsequent to this ruling the U.S. Court of International Trade issued an order that directed the U.S. Customs and Border Protection (“CBP”) to formalize a process for refunding IEEPA tariffs. On April 20, 2026, the CBP launched an online portal to submit IEEPA tariff refund requests. Submitted requests are reviewed by the CBP to determine validity prior to the issuance of any refund. During the second quarter of 2026, the Company received $14.5 million in refunds for previously paid IEEPA tariffs, which were recorded primarily as a reduction to cost of product revenues. The Company does not expect any additional refunds potentially collectible in the future for IEEPA tariffs paid through the U.S. Supreme Court’s February 20, 2026 ruling to be material.

Previous wording

It is unclear at this time what the ultimate impact this decision will have on our business or future operating results. Effective February 24, 2026, a new 10% tariff for all imports under Section 122 of the Trade Act of 1974 was imposed in response to the Supreme Court’s ruling. These tariffs are expected to remain in effect for 150 days, the maximum period that Section 122 permits without congressional action. However, previous exclusions, such as for the United States-Mexico-Canada Agreement (“USMCA”), remain in place. We continue to monitor these developments and their potential impact on our business and future operating results.

Current wording

In response to the Supreme Court’s ruling, effective February 24, 2026, a new 10% tariff for all imports under Section 122 of the Trade Act of 1974 was imposed, subject to applicable exclusions, including exclusions for qualifying products under the United States-Mexico-Canada Agreement. These tariffs were expected to remain in effect for 150 days, the maximum period that Section 122 permits without congressional action and subsequently expired on July 24, 2026. Effective July 24, 2026, the U.S. implemented or announced replacement tariffs under Section 301 of the Trade Act of 1974, at rates generally ranging from 10% to 12.5%, which are intended to replace the expired Section 122 tariffs. At this time, we do not currently expect these recent tariff changes to have a material impact on our business, operating results, cash flow or financial condition. However, the scope, rate, duration, legality and implementation of existing or future tariffs remain uncertain, and additional tariff measures, changes to existing exclusions, retaliatory trade actions, litigation outcomes, refund processes or other changes in U.S. or foreign trade policy could increase our costs, disrupt our supply chain, affect customer demand or require changes to our sourcing, pricing or production strategies. We continue to monitor these developments and their potential impact on our business and future operating results.

Previous wording

Our full-time employee headcount was approximately 3,525 as of March 31, 2026.

Current wording

Our full-time employee headcount was approximately 3,485 as of June 30, 2026.

Previous wording

There have been no material changes in our critical accounting policies and estimates during the three months ended March 31, 2026 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, 2025.

Current wording

There have been no material changes in our critical accounting policies and estimates during the six months ended June 30, 2026 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, 2025.

Previous wording

Service revenues represented 44% and 46% of total revenues for the three months ended March 31, 2026 and 2025. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $10.6 million due to an increase of $5.5 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 $5.0 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 three months ended June 30, 2026 and 2025. Service revenues include revenues from technical services and SaaS and Expert Services offerings. Service revenues increased by $9.8 million due to an increase of $4.8 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 $5.0 million in SaaS and Expert Services revenues due to continued customer demand, including an increase in revenues from our Specialty Pharmacy Services offering.

Previous wording

Our international sales represented 10% and 8% of total revenues for the three months ended March 31, 2026 and 2025, respectively. In future periods, we expect our revenues 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 June 30, 2026 and 2025, respectively. In future periods, we expect our revenues 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 56% and 54% of total revenues for the three months ended March 31, 2026 and 2025, respectively. Product revenues increased by $29.6 million, primarily driven by an increase in revenues from our automated dispensing systems and XTExtend offering, partially offset by a decrease in revenues from robotics, including products related to our Central Pharmacy Dispensing Service and IV Compounding Service offering.

Current wording

Product revenues represented 56% and 55% of total revenues for the six months ended June 30, 2026 and 2025, respectively. Product revenues increased by $41.5 million, primarily driven by an increase in revenues from our automated dispensing systems and XTExtend offering, partially offset by a decrease in revenues from robotics, including products related to our Central Pharmacy Dispensing Service and IV Compounding Service offering.

Previous wording

Our ability to grow product and service revenues is dependent on our ability to continue to obtain orders from customers, including contract renewals, which may be dependent upon customers’ capital equipment budgets and/or capital equipment approval cycles, our ability to produce quality products and consumables to fulfill customer demand, the volume of implementations we are able to complete, our ability to meet customer needs by providing a quality implementation experience and solutions that meet expected service levels, our ability to develop new or enhance existing solutions, and our flexibility in workforce allocations among customers to complete implementations on a timely basis. The timing of our revenues is primarily dependent on when our customers’ schedules and/or staffing levels allow for implementations.

Current wording

Our ability to grow product and service revenues is dependent on our ability to continue to obtain orders from customers, including contract renewals and competitive conversions, which may be dependent upon customers’ capital equipment budgets and/or capital equipment approval cycles, our ability to produce quality products and consumables to fulfill customer demand, the volume of implementations we are able to complete, our ability to meet customer needs by providing a quality implementation experience and solutions that meet expected service levels, our ability to develop new or enhance existing solutions, and our flexibility in workforce allocations among customers to complete implementations on a timely basis. The timing of our revenues is primarily dependent on when our customers’ schedules and/or staffing levels allow for implementations.

Previous wording

Cost of revenues for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 increased by $10.8 million, of which $9.9 million was attributed to the increase in cost of product revenues and $0.9 million was attributed to the increase in cost of service revenues.

Current wording

Cost of revenues for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 increased by $7.2 million, of which $3.7 million was attributed to the increase in cost of product revenues and $3.5 million was attributed to the increase in cost of service revenues.

Previous wording

The increase in cost of product revenues for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was driven by an increase in product revenues of $29.6 million for the comparable period. The increase in cost of product revenues has not increased proportionally with the increase in product revenues primarily due to the favorable impact of scale and efficiencies in installations as well as product and customer mix, partially offset by the impact of tariffs during the three months ended March 31, 2026. The increase in cost of service revenues for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 has not increased proportionally with the increase in service revenues primarily due to certain non-recurring costs, including software upgrade expenses, incurred during the three months ended March 31, 2025.

Current wording

The increase in cost of product revenues for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 has not increased proportionally with the increase in product revenues primarily due to a $14.0 million refund received during the three months ended June 30, 2026 for previously paid IEEPA tariffs, favorable impact of scale and efficiencies in installations as well as product and customer mix, partially offset by the impact of ongoing tariffs during the six months ended June 30, 2026.

Previous wording

The overall increase in gross margin primarily relates to higher revenues for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, the favorable impact of scale and efficiencies in installations, product and customer mix, and certain non-recurring costs, including software upgrade expenses, incurred during the three months ended March 31, 2025, partially offset by the impact of tariffs. Our gross profit for the three months ended March 31, 2026 was $140.4 million, as compared to $110.9 million for the three months ended March 31, 2025.

Current wording

The overall increase in gross margin primarily relates to higher revenues for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, a $14.0 million refund received during the three months ended June 30, 2026 for previously paid IEEPA tariffs, the favorable impact of scale and efficiencies in installations, product and customer mix, and certain non-recurring costs, including software upgrade expenses, incurred during the six months ended June 30, 2025, partially offset by the impact of ongoing tariffs. Our gross profit for the six months ended June 30, 2026 was $293.3 million, as compared to $238.6 million for the six months ended June 30, 2025.

Previous wording

Research and Development. Research and development expenses increased by $1.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Current wording

Research and Development. Research and development expenses decreased by $1.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Previous wording

Selling, General, and Administrative. Selling, general, and administrative expenses remained relatively consistent for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to an increase of $2.8 million in employee-related expenses and $2.6 million in consulting expenses, offset by a decrease in expenses incurred during the three months ended March 31, 2025 of $2.7 million for legal and regulatory expenses, and $1.5 million in certain restructuring and severance charges.

Current wording

Selling, General, and Administrative. Selling, general, and administrative expenses increased by $2.2 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to an increase of $3.3 million in employee-related expenses and an increase of $1.9 million in certain restructuring and severance charges, partially offset by a decrease of $3.5 million in the allowance for credit losses compared to the three months ended June 30, 2025.

Previous wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $2.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $2.4 million decrease in other income and a $0.4 million decrease in other expense. The decrease in other income during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily attributable to lower interest income received due to lower cash and cash equivalents balances following the repurchases of our common stock during the second and third quarters of 2025 and maturity of the remaining 2025 Notes in September 2025, as well as lower interest rates.

Current wording

Interest and Other Income (Expense), Net. Interest and other income (expense), net changed by $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by a $1.2 million decrease in other income. The decrease in other income during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily attributable to lower interest income received due to lower cash and cash equivalents balances following the repurchases of our common stock during the second and third quarters of 2025 and maturity of the remaining 2025 Notes in September 2025, partially offset by $0.5 million of interest income received in connection with the IEEPA tariffs refund during the three months ended June 30, 2026.

Previous wording

For the three months ended March 31, 2026 and March 31, 2025, we recorded income tax expense of $5.5 million and income tax benefit of $2.5 million, respectively. The change in the income tax expense for the three months ended March 31, 2026 compared to the income tax benefit for the same period in 2025 was primarily due to higher income before income taxes generated during the current period.

Current wording

For the six months ended June 30, 2026 and June 30, 2025, we recorded income tax expense of $15.1 million and $2.3 million, respectively. The change in income tax expense for the six months ended June 30, 2026, compared to the same period in 2025, was primarily due to changes in income before income taxes.

Previous wording

We had cash and cash equivalents of $239.2 million at March 31, 2026 compared to $196.5 million at December 31, 2025. 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. As of March 31, 2026, a substantial portion of the Company’s cash and cash equivalents were held with a limited number of financial institutions and money market funds, which may expose the Company to concentration risk in the event of a failure or adverse condition affecting those entities.

Current wording

We had cash and cash equivalents of $292.2 million at June 30, 2026 compared to $196.5 million at December 31, 2025. 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. As of June 30, 2026, a substantial portion of the Company’s cash and cash equivalents were held with a limited number of financial institutions and money market funds, which may expose the Company to concentration risk in the event of a failure or adverse condition affecting those entities.

Previous wording

Our ratio of current assets to current liabilities was 1.5:1 at March 31, 2026 and 1.4:1 at December 31, 2025.

Current wording

Our ratio of current assets to current liabilities was 1.6:1 at June 30, 2026 and 1.4:1 at December 31, 2025.

Previous wording

Net cash provided by operating activities was $54.5 million for the three months ended March 31, 2026, primarily consisting of operating inflows of $46.2 million and favorable working capital movements of $8.3 million. Operating inflows consisted of net income of $11.4 million, adjusted for non-cash items of $34.8 million, which consisted primarily of depreciation and amortization expense of $18.6 million and share-based compensation expense of $9.5 million. The favorable working capital was primarily due to an increase in deferred revenues of $40.3 million, driven primarily by an increase in billings for certain technical services, SaaS and Expert Services, and connected devices offerings, and an increase in accounts payable of $16.2 million primarily due to an increase in inventory spend and timing of payments. These cash inflows were partially offset by an increase in accounts receivable and unbilled receivables of $33.3 million primarily due to the timing of billings, shipments, and collections and a decrease in accrued compensation of $10.8 million primarily due to the timing of employee bonuses and commissions, as well as ESPP purchases.

Current wording

Net cash provided by operating activities was $122.8 million for the six months ended June 30, 2026, primarily consisting of operating inflows of $110.7 million and favorable working capital movements of $12.1 million. Operating inflows consisted of net income of $35.6 million, adjusted for non-cash items of $75.1 million, which consisted primarily of depreciation and amortization expense of $37.4 million, share-based compensation expense of $21.7 million, and a change in deferred income taxes of $10.9 million. The favorable working capital was primarily due to an increase in deferred revenues of $13.1 million, driven primarily by an increase in billings for certain technical services, SaaS and Expert Services, and connected devices offerings, an increase in accounts payable of $7.2 million primarily due to the timing of payments, a decrease in inventories of $4.2 million, and a decrease in investment in sales-type leases of $4.0 million. These cash inflows were partially offset by an increase in accounts receivable and unbilled receivables of $10.2 million primarily due to the timing of billings, shipments, and collections, a decrease in operating lease liabilities of $6.0 million, and an increase in other current assets of $5.1 million.

Previous wording

Net cash provided by operating activities was $25.9 million for the three months ended March 31, 2025, primarily consisting of operating inflows of $22.6 million and favorable working capital movements of $3.3 million. Operating inflows consisted of a net loss of $7.0 million, adjusted for non-cash items of $29.6 million, which consisted primarily of depreciation and amortization expense of $20.0 million and share-based compensation expense of $10.8 million. The favorable working capital was primarily due to an increase in deferred revenues of $20.2 million, driven primarily by an increase in billings for certain technical service and SaaS and Expert Services offerings, and a decrease in accounts receivable and unbilled receivables of $5.5 million, primarily due to the timing of billings, shipments, and collections. The cash inflows were partially offset by a decrease in accrued compensation of $14.2 million, primarily due to the timing of bonus payments, as well as ESPP purchases.

Current 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.

Previous wording

Net cash used in investing activities was $15.9 million for the three months ended March 31, 2026, which consisted primarily of capital expenditures of $12.4 million for property and equipment.

Current wording

Net cash used in investing activities was $28.4 million for the six months ended June 30, 2026, which consisted primarily of capital expenditures of $21.4 million for property and equipment and $7.0 million for external-use software development costs.

Previous wording

Net cash used in investing activities was $15.7 million for the three months ended March 31, 2025, which consisted primarily of capital expenditures of $11.2 million for property and equipment.

Current 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.

Previous wording

Net cash provided by financing activities was $2.4 million for the three months ended March 31, 2026, primarily due to $7.8 million in proceeds from employee stock option exercises and ESPP purchases.

Current wording

Net cash used in financing activities was $21.0 million for the six months ended June 30, 2026, primarily due to a net change in the customer funds balances of $23.9 million, partially offset by $7.9 million in proceeds from employee stock option exercises and ESPP purchases.

Previous wording

Net cash provided by financing activities was $4.0 million for the three months ended March 31, 2025, primarily due to $8.3 million in proceeds from employee stock option exercises and ESPP purchases.

Current 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.

Previous wording

There have been no significant changes during the three months ended March 31, 2026 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, 2025.

Current wording

There have been no significant changes during the six months ended June 30, 2026 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, 2025.