Penumbra Inc

Previous wording

•Peripheral embolization - RUBY Coil System, Ruby LP, LANTERN Delivery Microcatheter and the POD System (POD and POD Packing Coil)

Current wording

•Peripheral embolization - RUBY Embolization Platform, LANTERN Delivery Microcatheter and the POD System (POD and POD Packing Coil)

Previous wording

By pioneering these innovations, we support healthcare providers, hospitals and clinics in more than 100 countries, working to improve patient outcomes and quality of life. In the three months ended March 31, 2025 and 2024, 20.8% and 24.8% of our revenue, respectively, was generated from customers located outside of the United States. Our sales outside of the United States are denominated principally in the euro, with some sales being denominated in other currencies. As a result, we have foreign exchange exposure but do not currently engage in hedging.

Current wording

By pioneering these innovations, we support healthcare providers, hospitals and clinics in more than 100 countries, working to improve patient outcomes and quality of life. In the three months ended June 30, 2025 and 2024, 23.2% and 27.1% of our revenue, respectively, was generated from customers located outside of the United States. In the six months ended June 30, 2025 and 2024, 22.0% and 26.0% of our revenue, respectively, was generated from customers located outside of the United States. Our sales outside of the United States are denominated principally in the euro, with some sales being denominated in other currencies. As a result, we have foreign exchange exposure but do not currently engage in hedging.

Previous wording

We generated revenue of $324.1 million and $278.7 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $45.5 million. We generated income from operations of $40.4 million and $12.1 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

We generated revenue of $339.5 million and $299.4 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $40.1 million, and revenue of $663.6 million and $578.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $85.5 million. We generated income from operations of $40.8 million and loss from operations of $81.0 million for the three months ended June 30, 2025 and 2024, respectively, and income from operations of $81.2 million and loss from operations of $68.9 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Revenue increased $45.5 million, or 16.3%, to $324.1 million in the three months ended March 31, 2025, from $278.7 million in the three months ended March 31, 2024. Overall revenue growth was primarily due to an increase in sales of our new and existing thrombectomy products.

Current wording

Revenue increased $40.1 million, or 13.4%, to $339.5 million in the three months ended June 30, 2025, from $299.4 million in the three months ended June 30, 2024. Overall revenue growth was primarily due to an increase in sales of existing thrombectomy products and new embolization and access products.

Previous wording

Revenue from our global thrombectomy products increased $38.8 million, or 20.7%, to $226.5 million in the three months ended March 31, 2025, from $187.7 million in the three months ended March 31, 2024. The increase in our global thrombectomy products was primarily attributable to higher sales volume in the United States as a result of sales of new products and further market penetration of our existing products. Sales of our U.S. thrombectomy products increased by 25.0% in the three months ended March 31, 2025. Prices for our thrombectomy products remained substantially unchanged during the period.

Current wording

Revenue from our global thrombectomy products increased $26.8 million, or 13.1%, to $230.3 million in the three months ended June 30, 2025, from $203.5 million in the three months ended June 30, 2024. The increase in our global thrombectomy products was primarily attributable to higher sales volume in the United States as a result of further market penetration of our existing products. Sales of our U.S. thrombectomy products increased by 22.6% in the three months ended June 30, 2025. Prices for our thrombectomy products remained substantially unchanged during the period.

Previous wording

Revenue from our global embolization and access products increased $6.6 million, or 7.3%, to $97.6 million in the three months ended March 31, 2025, from $91.0 million in the three months ended March 31, 2024. The increase in our global embolization and access products was primarily driven by sales of our U.S. embolization and access products, which increased by 16.2% in the three months ended March 31, 2025. Prices for our embolization and access products remained substantially unchanged during the period.

Current wording

Revenue from our global embolization and access products increased $13.3 million, or 13.9%, to $109.2 million in the three months ended June 30, 2025, from $95.9 million in the three months ended June 30, 2024. The increase in our global embolization and access products was primarily driven by sales of our U.S. embolization and access products, which increased by 12.2% in the three months ended June 30, 2025. Prices for our embolization and access products remained substantially unchanged during the period.

Previous wording

Revenue from product sales in international markets decreased $1.7 million, or 2.5%, to $67.3 million in the three months ended March 31, 2025, from $69.0 million in the three months ended March 31, 2024. The decrease in our international revenue was primarily attributable to a decline in China revenue, partially offset by increases in all other international regions. Revenue from international sales represented 20.8% and 24.8% of our total revenue for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Revenue from sales in international markets decreased $2.6 million, or 3.2%, to $78.6 million in the three months ended June 30, 2025, from $81.2 million in the three months ended June 30, 2024. The decrease in our international revenue was primarily attributable to a decline in China revenue, partially offset by increases in all other international regions. Revenue from international sales represented 23.2% and 27.1% of our total revenue for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Gross margin increased by 1.6 percentage points to 66.6% in the three months ended March 31, 2025, from 65.0% in the three months ended March 31, 2024. The improvement in gross margin was primarily driven by favorable product mix across our regions and productivity improvements. Gross margin is impacted by product mix, regional mix, and production initiatives to support demand and create future efficiencies. As such, with favorable product mix, improvement in productivity, and by leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future.

Current wording

Gross margin increased by 11.6 percentage points to 66.0% in the three months ended June 30, 2025, from 54.4% in the three months ended June 30, 2024, which included a one-time $33.4 million inventory impairment charge to cost of revenue in connection with the impairment of our immersive healthcare asset group. The impact of the one-time $33.4 million charge decreased our gross margin by 11.1 percentage points in the three months ended June 30, 2024. Refer to Note “4. Impairment of Immersive Healthcare Asset Group” to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details. Excluding the one-time inventory impairment charge, the improvement in gross margin was primarily driven by favorable product mix across our regions and productivity improvements. Gross margin is impacted by product mix, regional mix, and production initiatives to support demand and create future efficiencies. As such, with favorable product mix, improvement in productivity, and by leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future. As we move into the second half of 2025, we expect to see sequential gross margin expansion from favorable product mix and productivity improvements.

Previous wording

R&D expenses decreased by $2.5 million, or 10.4%, to $22.1 million in the three months ended March 31, 2025, from $24.6 million in the three months ended March 31, 2024. The decrease was primarily due to a $1.7 million decrease in personnel-related expenses which reflects lower costs following the exit from our immersive healthcare business in the third quarter of 2024, partially offset by additional investment to support our growth.

Current wording

R&D expenses decreased by $1.7 million, or 6.9%, to $23.2 million in the three months ended June 30, 2025, from $24.9 million in the three months ended June 30, 2024. The decrease was primarily due to a $1.4 million decrease in personnel-related expenses which reflects lower costs following the exit from our immersive healthcare business in the third quarter of 2024, partially offset by additional investment to support our growth.

Previous wording

Our income tax expense for the three months ended March 31, 2025 was $4.6 million, or 10.6% of income before taxes, compared to $3.6 million, or 24.8% of income before taxes, for the three months ended March 31, 2024. The change in effective tax rate was primarily due an increase in excess tax benefits from stock-based compensation attributable to our U.S. jurisdiction in the current period.

Current wording

Our income tax expense for the three months ended June 30, 2025 was immaterial or 0.1% of income before taxes, compared to income tax benefit of $17.7 million, or 22.7% of income before taxes, for the three months ended June 30, 2024. The change in effective tax rate was primarily due an increase in excess tax benefits from stock-based compensation attributable to our U.S. jurisdiction in the current period.

Previous wording

SG&A expenses increased by $9.0 million, or 6.3%, to $153.5 million in the three months ended March 31, 2025, from $144.4 million in the three months ended March 31, 2024. The increase was primarily due to a $10.1 million increase in personnel-related expenses driven by an increase in headcount and related expenses to support our growth and a $2.6 million increase in costs related to marketing events. This was partially offset by a $4.8 million decrease in non-recurring litigation related expenses, including settlement costs and legal fees, associated with wage and hour complaints filed against the Company in 2023.

Current wording

SG&A expenses increased by $27.1 million, or 9.5%, to $313.4 million in the six months ended June 30, 2025, from $286.3 million in the six months ended June 30, 2024. The increase was primarily due to a $28.0 million increase in personnel-related expenses driven by an increase in headcount and related expenses to support our growth and a $3.6 million increase in travel-related expenses. This was partially offset by a $4.8 million decrease in non-recurring litigation related expenses, including settlement costs and legal fees, associated with wage and hour complaints filed against the Company in 2023 and a $4.8 million decrease in amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition due to the impairment of long-lived assets associated with the immersive healthcare business in the second quarter of 2024.

Previous wording

As of March 31, 2025, we had $841.1 million in working capital, which included $376.1 million in cash and cash equivalents and $2.8 million in marketable investments. As of March 31, 2025, we held approximately 6.0% of our cash and cash equivalents in foreign entities.

Current wording

As of June 30, 2025, we had $907.7 million in working capital, which included $421.8 million in cash and cash equivalents and $2.8 million in marketable investments. As of June 30, 2025, we held approximately 6.7% of our cash and cash equivalents in foreign entities.

Previous wording

We believe our current sources of liquidity will be sufficient to meet our liquidity requirements for at least the next 12 months. Our principal liquidity requirements are to fund our operations, expand manufacturing operations which includes, but is not limited to, maintaining sufficient levels of inventory to meet the anticipated demand of our customers, fund research and development activities and fund our capital expenditures. We may also lease or purchase additional facilities to facilitate our growth. For example, during the three months ended March 31, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse for the production of medical devices. See Note “4. Balance Sheet Components” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information. We expect to continue to make investments as we launch new products, expand our manufacturing operations and information technology infrastructures and further expand into international markets. We may, however, require or elect to secure additional financing as we continue to execute our business strategy. If we require or elect to raise additional funds, we may do so through equity or debt financing, which may not be available on favorable terms, could result in dilution to our stockholders, and could require us to agree to covenants that limit our operating flexibility.

Current wording

We believe our current sources of liquidity will be sufficient to meet our liquidity requirements for at least the next 12 months. Our principal liquidity requirements are to fund our operations, expand manufacturing operations which includes, but is not limited to, maintaining sufficient levels of inventory to meet the anticipated demand of our customers, fund research and development activities and fund our capital expenditures. We may also lease or purchase additional facilities to facilitate our growth. For example, during the six months ended June 30, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse for the production of medical devices. See Note “5. Balance Sheet Components” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information. We expect to continue to make investments as we launch new products, expand our manufacturing operations and information technology infrastructures and further expand into international markets. We may, however, require or elect to secure additional financing as we continue to execute our business strategy. If we require or elect to raise additional funds, we may do so through equity or debt financing, which may not be available on favorable terms, could result in dilution to our stockholders, and could require us to agree to covenants that limit our operating flexibility.

Previous wording

On August 5, 2024, the Company’s Board of Directors approved a share repurchase authorization in the amount of up to $200.0 million, allowing the Company to repurchase its common stock from time to time at such prices as it deems appropriate through open market purchases, block transactions, privately negotiated transactions, including accelerated share repurchase transactions, or otherwise. The repurchase authorization expires on July 31, 2025. Under this authorization, the Company entered into an accelerated share repurchase agreement (“ASR”) with JPMorgan Chase Bank, National Association to repurchase $100.0 million of the Company’s common stock during the three months ended September 30, 2024. During the three months ended September 30, 2024, the Company repurchased an aggregate of 517,763 shares under the ASR at an aggregate cost of $100.4 million, including legal and financial advisor fees of $0.4 million associated with the repurchase. As of March 31, 2025, the Company had remaining authority to purchase $100.0 million of its common stock under the share repurchase authorization.

Current wording

On August 5, 2024, the Company’s Board of Directors approved a share repurchase authorization in the amount of up to $200.0 million, allowing the Company to repurchase its common stock from time to time at such prices as it deems appropriate through open market purchases, block transactions, privately negotiated transactions, including accelerated share repurchase transactions, or otherwise. The repurchase authorization originally expired on July 31, 2025. Under this authorization, the Company entered into an accelerated share repurchase agreement (“ASR”) with JPMorgan Chase Bank, National Association to repurchase $100.0 million of the Company’s common stock during the three months ended September 30, 2024. During the three months ended September 30, 2024, the Company repurchased an aggregate of 517,763 shares under the ASR at an aggregate cost of $100.4 million, including legal and financial advisor fees of $0.4 million associated with the repurchase. As of June 30, 2025, the Company had remaining authority to purchase $100.0 million of its common stock under the share repurchase authorization. On July 25, 2025, the Company’s Board of Directors extended the repurchase authorization for the remaining $100.0 million to December 31, 2025.

Previous wording

Net cash provided by operating activities consists primarily of net income adjusted for certain non-cash items (including depreciation and amortization, stock-based compensation expense, inventory write-offs and write-downs, changes in deferred tax balances, and the effect of changes in working capital and other activities).

Current wording

Net cash provided by operating activities consists primarily of net income adjusted for certain non-cash items (including depreciation and amortization, stock-based compensation expense, impairment charge, inventory write-offs and write-downs, changes in deferred tax balances, and the effect of changes in working capital and other activities).

Previous wording

Net cash provided by operating activities was $49.0 million during the three months ended March 31, 2025 and consisted of consolidated net income of $39.2 million and non-cash items of $19.7 million, offset by net changes in operating assets and liabilities of $10.0 million. The change in operating assets and liabilities primarily relates to an increase in inventories of $10.8 million to support our growth, a decrease in accounts payable of $0.3 million, and an increase in prepaid expenses and other current and non-current assets of $0.1 million. This was partially offset by an increase in accrued expenses and other non-current liabilities of $0.6 million and a decrease in accounts receivables of $0.5 million due to timing of invoicing and collections.

Current wording

Net cash provided by operating activities was $93.9 million during the six months ended June 30, 2025 and consisted of consolidated net income of $84.5 million and non-cash items of $33.7 million, offset by net changes in operating assets and liabilities of $24.3 million. The change in operating assets and liabilities primarily relates to an increase in inventories of $22.1 million to support our growth, an increase in accounts receivables of $4.2 million, and a decrease in accounts payable of $3.5 million. This was partially offset by an increase in accrued expenses and other non-current liabilities of $5.5 million.

Previous wording

Net cash provided by operating activities was $38.3 million during the three months ended March 31, 2024 and consisted of consolidated net income of $11.0 million and non-cash items of $21.7 million, offset by net changes in operating assets and liabilities of $5.6 million. The change in operating assets and liabilities primarily relates to a decrease in accounts receivable of $8.5 million due to timing of invoicing and collections, an increase in accounts payable of $5.2 million due to timing of payments, and a decrease in prepaid expenses and other current and non-current assets of $4.6 million. This was partially offset by an increase in inventories of $11.6 million to support our growth and a decrease in accrued expenses and other non-current liabilities of $1.0 million due to timing of payments.

Current wording

Net cash provided by operating activities was $60.9 million during the six months ended June 30, 2024 and consisted of consolidated net loss of $49.2 million and non-cash items of $128.4 million, offset by net changes in operating assets and liabilities of $18.3 million. The change in operating assets and liabilities primarily relates to an increase in inventories of $23.0 million to support our growth and an increase in accounts payable of $5.5 million, due to timing of payments. This was partially offset by a decrease in accounts receivable of $2.0 million due to timing of invoicing and collections, a decrease in prepaid expenses and other current and non-current assets of $2.1 million, and a decrease in accrued expenses and other non-current liabilities of $0.9 million due to timing of payments.

Previous wording

Net cash used in investing activities was $0.5 million during the three months ended March 31, 2025 and primarily consisted of capital expenditures of $13.5 million, partially offset by $13.0 million in proceeds from maturities of marketable investments.

Current wording

Net cash used in investing activities was $16.1 million during the six months ended June 30, 2025 and primarily consisted of capital expenditures of $29.0 million, partially offset by $13.0 million in proceeds from maturities of marketable investments.

Previous wording

Net cash provided by investing activities was $18.4 million during the three months ended March 31, 2024 and primarily consisted of $32.1 million in proceeds from maturities of marketable investments, net of purchases, partially offset by purchases of non-marketable investments of $10.0 million and capital expenditures of $5.8 million.

Current wording

Net cash provided by investing activities was $52.9 million during the six months ended June 30, 2024 and primarily consisted of $71.6 million in proceeds from maturities of marketable investments, net of purchases, partially offset by purchases of capital expenditures of $10.4 million and non-marketable investments of $10.0 million.

Previous wording

Net cash provided by (used in) financing activities primarily relates to proceeds from exercises of stock options, partially offset by payments towards the reduction of our finance lease obligations and payments of employee taxes related to vested restricted stock units.

Current wording

Net cash provided by financing activities primarily relates to proceeds from exercises of stock options and issuances of common stock under our employee stock purchase plan, partially offset by payments of employee taxes related to vested restricted stock units and payments towards the reduction of our finance lease obligations.

Previous wording

Net cash used in financing activities was $0.8 million during the three months ended March 31, 2024 and primarily consisted of $0.6 million in payments towards finance leases and $0.4 million of payments of employee taxes related to vested restricted stock units, partially offset by proceeds from exercises of stock options of $0.2 million.

Current wording

Net cash provided by financing activities was $17.5 million during the six months ended June 30, 2025 and primarily consisted of $10.7 million in proceeds from exercises of stock options and proceeds from the issuance of common stock under our employee stock purchase plan of $8.9 million, partially offset by $1.3 million in payments towards finance leases and $0.5 million of payments of employee taxes related to vested restricted stock units.

Previous wording

Net cash provided by financing activities was $2.7 million during the three months ended March 31, 2025 and primarily consisted of $4.0 million in proceeds from exercises of stock options, partially offset by $0.6 million in payments towards finance leases and $0.4 million of payments of employee taxes related to vested restricted stock units.

Current wording

Net cash provided by financing activities was $7.5 million during the six months ended June 30, 2024 and primarily consisted of proceeds from the issuance of common stock under our employee stock purchase plan of $8.9 million, partially offset by $1.1 million in payments towards finance leases and $0.5 million of payments of employee taxes related to vested restricted stock units.

Previous wording

During the three months ended March 31, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse for the production of medical devices. Refer to Note “4. Balance Sheet Components” to our condensed consolidated financial statement in Part I, Item 1 of this Quarterly Report on Form 10 for more information.

Current wording

During the six months ended June 30, 2025, the Company entered into agreements to acquire property in Costa Rica and construct a manufacturing facility and warehouse for the production of medical devices. Refer to Note “5. Balance Sheet Components” to our condensed consolidated financial statement in Part I, Item 1 of this Quarterly Report on Form 10 for more information.