INSULET CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements reflect the consolidated operations of Insulet Corporation and its subsidiaries (“Insulet” or the “Company”). The unaudited condensed financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates. In management’s opinion, the unaudited condensed financial statements contain all normal recurring adjustments necessary for a fair statement of the interim results reported. Operating results for the nine months ended September 30, 2026 are not necessarily indicative of the results for the full year ending December 31, 2026 or for any subsequent interim period. Amounts have been calculated using actual, non-rounded figures; accordingly, amounts may not recalculate and columns and rows within tables may not add due to rounding.

These unaudited condensed financial statements do not include all of the annual disclosures required by GAAP; accordingly, they should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Related Party Transactions

During a portion of 2025, a member of the Company’s Board of Directors was married to an executive officer of one of the Company’s distributors. The terms of the distribution agreement are consistent with those prevailing at arm’s length. As of October 1, 2025, the Company’s transactions with the distributor were no longer considered related party transactions.

Fair Value Measurements

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

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 is little or no market data, which require the Company to develop its own assumptions.

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

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

Recently Adopted Accounting Standards

The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, during the first quarter of 2026. This ASU allows companies to elect a practical expedient to simplify the measurement of credit losses for certain receivables and contract assets. The Company elected to apply the practical expedient prospectively. The adoption of this ASU had no impact on the Company’s consolidated financial statements.

Accounting Standards 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). The new guidance requires disaggregated disclosure of expenses included in certain expense captions presented in the statements of income as well as additional disclosures about selling expenses. The Company intends to adopt these new disclosure requirements beginning with its annual filing for 2027, as required. The guidance may be applied prospectively or retrospectively. The Company is currently evaluating the impact of this guidance.

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, which modernizes the internal-use software guidance by eliminating references to prescriptive and sequential software development stages. The guidance is effective for the Company beginning in the first quarter of 2028. Early adoption is permitted. The guidance may be applied prospectively, modified prospectively, or retrospectively. The Company is currently evaluating the impact of this guidance.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The new guidance simplifies certain aspects of hedge documentation, assessment of hedge effectiveness, and ongoing application requirements. The guidance is effective for the Company beginning in the first quarter of 2027, but early adoption is permitted. Once adopted, the guidance is applied prospectively. The adoption of this ASU will not have an impact on the Company's consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides guidance on the recognition, measurement, presentation, and disclosure of government grants received. The guidance is effective for the Company beginning in the first quarter of 2029, but early adoption is permitted. The guidance may be applied prospectively, modified prospectively, or retrospectively. The Company is currently evaluating the impact of this guidance.

Note 2. Revenue and Contract Acquisition Costs

The following table summarizes the Company’s disaggregated revenue:

The percentages of total revenue attributable to customers that represented 10% or more of total revenue were as follows:

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

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

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

The Company recognized $6.8 million and $5.9 million of amortization of capitalized contract acquisition costs during the three months ended September 30, 2026 and 2025, respectively, and recognized $19.8 million and $16.5 million of amortization of capitalized contract acquisition costs during the nine months ended September 30, 2026 and 2025, respectively.

Note 3. Accounts Receivable, Net

Accounts receivable, net were comprised of the following:

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

The Company outsourced insurance claim submission activities in one of its international markets. Under this agreement, in 2025, the Company transferred certain receivables in exchange for cash in advance. If the third-party service provider was unable to collect on the transferred receivables, the third-party service provider had recourse to the Company. This arrangement was accounted for as a secured borrowing with a pledge of collateral as the transfer did not meet the criteria for sale accounting. The proceeds from and repayments of secured borrowings are reflected as cash flows provided by (used in) financing activities in the consolidated statement of cash flows. This arrangement was discontinued in 2025.

Note 4. Inventories

Inventories were comprised of the following:

Note 5. Cloud Computing Costs

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

Amortization expense was $13.4 million and $8.4 million for the three months ended September 30, 2026 and 2025, respectively, and was $37.8 million and $23.9 million for the nine months ended September 30, 2026 and 2025, respectively.

Note 6. Goodwill and Other Intangible Assets, Net

There wereno changes to the carrying amount of goodwill during the nine months ended September 30, 2026.

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

Note 7. Accrued Expenses and Other Current Liabilities

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

Product Warranty Costs

The Company provides afour-year warrantyon its Controllers and Personal Diabetes Managers (“PDMs”) sold in the United States and Europe and afive-year warrantyon Controllers and PDMs sold in Canada. The Company may also replace Pods that do not function in accordance with product specifications. The Company estimates its product warranty obligation at the time products are shipped based on historical experience and the estimated cost to service warranty claims. Costs to service warranty claims include current product costs, reclaim costs, shipping and handling costs, and direct and incremental distribution and customer service support costs. Because the Company continues to introduce new products and versions, it also considers anticipated product performance over the warranty period when estimating its warranty reserves. Warranty expense is recorded in cost of revenue in the consolidated statements of income.

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

During the nine months ended September 30, 2026, the Company issuedtwo voluntary medical device corrections (“MDCs”), one in March and one in May, related to separate manufacturing issues that caused a tear in the cannula of certain Omnipod products. The Company accrued an estimated liability of $37.0 million associated with the MDCs during the nine months ended September 30, 2026. During the three and nine months ended September 30, 2026, the Company reduced its estimated MDC-related warranty liability by $7.0 million and $10.7 million, respectively, to reflect fewer Pod replacements than initially estimated.

Note 8. Debt

The components of debt consisted of the following:

Senior Secured Credit Agreement

In September 2026, the Company amended its senior secured credit agreement, refinancing the $475 million outstanding principal balance of its Term Loan B and reducing the applicable interest rate from Secured Overnight Financing Rate (“SOFR”) plus 2.00% to SOFR plus 1.75%. The refinancing was accounted for as a combination of debt modifications, extinguishments, and new debt issuances and resulted in a $0.3 million loss on extinguishment of debt related to the write-off of unamortized debt discount and issuance costs. In addition, borrowings under the Revolving Credit Facility now bear interest at a rate of SOFR plus an applicable margin of 1.25% to 1.75% based on the Company’s total leverage ratio, and the borrowing capacity under the Revolving Credit Facility was increased to $750 million.

Costa Rica Plant Financing

In 2025, the Company entered into an agreement for the construction and future purchase of a manufacturing plant in Costa Rica. The arrangement includes a finance lease for the land, with the related lease liability recorded in long-term debt. The construction of the manufacturing plant is a build-to-suit arrangement that does not qualify as a sale-leaseback. Accordingly, the Company is considered the accounting owner of the facility during the construction period. Costs financed by the seller are recorded as construction-in-process within property, plant and equipment, net on the consolidated balance sheet, with a corresponding obligation recorded in long-term debt. In April 2026, the Company entered into an agreement to guarantee potential future payments related to the seller’s loan used to finance construction of the manufacturing plant. The maximum potential amount of future payments under the guarantee is $97 million.

Senior Unsecured Notes

In March 2025, the Company issued an aggregate principal amount of $450 million of 6.5% senior unsecured notes due in April 2033. The net proceeds of $440.7 million were used to repurchase a portion of the Convertible Senior Notes.

Convertible Senior Notes

During the three months ended September 30, 2025, the Company paid $510.7 million in cash to redeem all of the remaining 0.375% Convertible Senior Notes due September 2026 (the “Convertible Notes”) that were previously outstanding. The difference between the cash paid and the $380.1 million aggregate principal amount outstanding ($378.5 million net of issuance costs) upon conversion was recorded to additional paid in capital. During the nine months ended September 30, 2025, the Company repurchased all outstanding Convertible Notes ($796.0 million net of issuance costs) for $1,052.2 million in cash, which resulted in a $123.9 million loss on extinguishment and a $132.3 million decrease to additional paid in capital for the portion that was converted. Additionally, during the nine months ended September 30, 2025, the Company received $164.6 million of proceeds from the settlement of capped call options.

Note 9. Financial Instruments and Fair Value

Financial Instruments Disclosed at Fair Value

The following tables provide a summary of the significant financial instruments that are disclosed at fair value on a recurring basis:

(1) Fair value was determined using quoted market prices and estimated current rates offered for similar debt under current market conditions. During the three months ended September 30, 2026, the Company began classifying these financial instruments as Level 2 because their fair values were determined using observable market inputs other than quoted prices in active markets for identical instruments.

(2) Fair value approximates carrying value and was determined using the cost basis.

Financial Instruments Measured at Fair Value on a Recurring Basis

The total carrying value of the Company’s investments in money market mutual funds was $293.2 million and $577.4 million at September 30, 2026 and December 31, 2025, respectively. The fair value of money market mutual funds are classified as Level 1 in the fair value hierarchy, and their fair value represents their carrying amount.

The Company enters short-term term and time deposits with varying maturity dates ranging from one week to 30 days. Based on their maturity dates, the Company has classified these investments within cash and cash equivalents in the consolidated balance sheets. These investments are not subject to fair value measurement.

Equity Securities Measured at Fair Value on a Non-Recurring Basis

The total carrying value of the Company’s investments in equity securities without readily determinable fair values was $24.1 million and $19.1 million at September 30, 2026 and December 31, 2025, respectively, and was included within other assets on the consolidated balance sheets. These investments are carried at cost less impairment, if any. If an observable price change in orderly transactions for the identical or similar investment in the same issuer is identified, the investments are measured at fair value as of the date that the observable transaction occurred and categorized as Level 2 in the fair value hierarchy.

Note 10. Derivative Instruments

The Company manages interest rate exposure using interest rate swaps with financial institutions as counterparties. Under the Company’s interest rate swap agreements, the Company receives variable rate interest payments and pays fixed interest at a weighted average rate of 3.47% on a total notional value of $460.0 million of its Term Loan B. The Company has designated the interest rate swaps as cash flow hedges.

The Company measures interest rate swaps at fair value on a recurring basis. As of September 30, 2026, the fair value of the interest rate swaps was insignificant.

As of September 30, 2026, net gains related to the interest rate swaps included in accumulated other comprehensive income and expected to be reclassified into the statement of income over the next 12 months was insignificant.

Note 11. Commitments and Contingencies

Legal Proceedings

The Company is, from time to time, involved in various legal proceedings in the normal course of business, including intellectual property, contract, employment, and product liability suits. Although the results of such legal proceedings cannot be predicted with certainty, as of September 30, 2026 the Company believes it is not currently a party to any legal proceedings for which a material loss was considered probable or for which the amount (or range) of loss was reasonably estimable.

Hu v. Insulet Corporation, et al.—On July 2, 2026, a putative securities class action, Hu v. Insulet Corporation, et al. (No. 1:26-cv-13062-LTS), was filed in the U.S. District Court for the District of Massachusetts against the Company and certain current and former executives and directors. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, arising from allegedly false and misleading public statements regarding the quality and safety of the Company’s Omnipod products. The complaint is brought on behalf of a putative class of those who purchased or otherwise acquired Insulet securities between February 21, 2025 and May 26, 2026, and seeks relief including damages and costs, including attorneys’ fees. On September 15, 2026, the court appointed a lead plaintiff. On September 30, 2026, the court entered an order providing that the lead plaintiff shall file an amended complaint by December 10, 2026, and defendants shall move to dismiss or otherwise respond to the amended complaint by February 15, 2027. Based on the information currently available, the Company cannot predict the ultimate outcome of this litigation or reasonably estimate the amount or range of any possible loss, and accordingly, no accrual has been recorded in the Company’s condensed consolidated financial statements.

Insulet Corp. v. EOFlow Co. Ltd. et al.—On April 24, 2025, the United States District Court for the District of Massachusetts entered final judgment in favor of Insulet Corporation in its ongoing litigation against EOFlow Co., Ltd.; EOFlow, Inc.; Nephria Bio, Inc.; and EOFlow’s CEO, Jesse Kim (collectively, “Defendants”), Insulet Corp. v. EOFlow Co. Ltd. et al., 1:23-cv-11780-FDS (D. Mass.). The litigation concerns the Defendants’ misappropriation of Insulet’s proprietary trade secrets relating to the design and manufacture of the Omnipod insulin patch pump. On December 3, 2024, a unanimous jury found Defendants misappropriated four of Insulet’s trade secrets and awarded Insulet total damages of $452 million, composed of $170 million in compensatory damages and $282 million in exemplary damages. The Court’s April 24, 2025 post-trial orders upheld the jury verdict and entered a permanent injunction against Defendants; to avoid any double recovery with the injunction, the district court also reduced the damages of the award to $59.4 million.

The district court’s permanent injunction prohibits Defendants and others subject to the order from using, possessing, selling, distributing, or seeking regulatory approval for any products that were designed, developed, or manufactured, in whole or in part, using or relying on Insulet’s trade secrets. The permanent injunction further requires EOFlow to assign certain patent applications to Insulet, disgorge any break-up fees received from Medtronic in connection with a previously contemplated acquisition, and submit to ongoing audits to ensure compliance with the Court’s orders. The injunction is worldwide and took effect immediately, subject to a limited exception that originally permittedsix months of continuing sales to those patients of EOFlow that existed in the Republic of Korea and the European Union as of October 2023.

Certain Defendants appealed the judgment to the United States Court of Appeals for the Federal Circuit and moved to stay the district court’s permanent injunction in its entirety pending resolution of the appeal. On July 7, 2025, the Federal Circuit granted Defendants a stay of the permanent injunction in part “only to the extent that the district court’s temporary stay (set to end October 24, 2025), regarding EOFlow patients in the Republic of Korea and the European Union, is extended (1) to include patients residing in the European Union who were using the relevant product(s) as of April 24, 2025, and (2) until further notice of the court.”

On May 28, 2026, after briefing and argument in the appeal, the Federal Circuit reversed the district court’s judgment, concluding that Insulet’s claims are barred by the Defend Trade Secret Act’s three-year statute of limitations. Defendants then filed an unopposed motion to modify the partial stay of the permanent injunction while Insulet seeks further review of the Federal Circuit’s decision. On June 22, 2026, the Federal Circuit granted Defendants’ motion, ordering that “[t]he partial stay as to Paragraphs 6 and 7 of the district court’s April 24, 2025 permanent injunction [prohibiting Defendants’ possession of the trade secrets or sales of any product derived from them] is extended to conduct occurring in the Republic of Korea, the European Union, Qatar, Saudi Arabia, and the United Arab

Emirates.” The Federal Circuit’s June 22, 2026 order also provides that, if Insulet’s forthcoming petition for rehearing of the Federal Circuit’s decision “is granted, Insulet may move to rescind th[e] partial stay.” The Federal Circuit denied Insulet’s petition for rehearing on October 19, 2026. Since the Company had not previously recorded the damages awarded, the reversal of the judgment had no impact on the Company’s condensed consolidated financial statements.

Note 12. Segment and Geographic Data

The Company’s product offerings consist of the Omnipod platform and drug delivery device based on the Omnipod platform. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company operates underone reportable segment. The Company has concluded that its Chief Executive Officer (“CEO”) is the CODM as the CEO is the ultimate decision maker for key operating decisions, determining the allocation of resources and assessing the financial performance of the Company. The Company’s CODM uses operating income and net income to monitor actual results against forecast and budget to identify business trends, assess operating performance, and modify capital allocation as necessary.

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

There were no significant segment expenses regularly provided to the CODM, other than cost of goods sold, research and development expenses, and selling, general and administrative expenses, which are reported in the Company’s condensed consolidated statements of income for the three and nine months ended September 30, 2026 and 2025.

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

Note 13. Equity

Stock-Based Compensation Expense

Compensation expense related to stock-based awards was recorded as follows:

Share Repurchase Program

In February 2026, the Board of Directors extended the Company’s $125 million share repurchase program to December 31, 2027 and authorized an additional $350 million of common stock repurchases under the program. Additionally, in February 2026, the Company entered into accelerated share repurchase agreements (“ASRs”) to repurchase $300 million of the Company’s common stock, which were completed by March 31, 2026. The Company had $115.4 million of remaining authorization under the share repurchase program as of September 30, 2026.

In October 2026, the Board of Directors authorized a $1 billion common stock repurchase program, effective through December 31, 2028.

Note 14. Income Taxes

The Company’s effective tax rate was 20.4% and 20.0% for the three and nine months ended September 30, 2026, respectively. For both the three and nine months ended September 30, 2026, the effective tax rate was slightly lower than the U.S. statutory rate primarily due to U.S. research and development credits, a favorable mix of jurisdictional profits, and improved utilization of foreign tax credits, partially offset by state income taxes and permanent differences.

The Company’s effective tax rate was 28.7% and 27.0% for the three and nine months ended September 30, 2025, respectively. For both the three and nine months ended September 30, 2025, the effective tax rate was higher than the U.S. statutory rate primarily due to non-deductible charges related to the repurchase of the Company’s Convertible Senior Notes.

Note 15. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, when dilutive, common share equivalents. The computation of basic and diluted earnings per share was as follows:

The number of common share equivalents excluded from the computation of diluted earnings per share because either the effect would have been antidilutive or the performance criteria related to the units had not yet been met were as follows:

Note 16. Accumulated Other Comprehensive Income

Changes in the components of accumulated other comprehensive income (loss), net of tax, were as follows:

(1) Amounts are presented net of income taxes, which are insignificant. There isno income tax impact on currency translation adjustments.